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Facts
The assessee, Vincent (India) Limited, appealed an order related to assessment year 2009-2010. The appeal stemmed from a notice issued under Section 148 to Pentafour Commercial Pvt. Ltd., which had previously amalgamated with Brahmaputra Enterprises Limited, which in turn had amalgamated with the assessee company. Pentafour Commercial Pvt. Ltd. no longer existed when the notice was issued.
Held
The Tribunal held that an irregularity occurred due to the assessee's failure to respond to the notice. This irregularity was curable. The issues were restored to the Assessing Officer for fresh adjudication after providing the assessee an opportunity to be heard.
Key Issues
Whether the assessment proceedings initiated against a non-existent entity due to amalgamation are valid, and if not, how to cure the procedural irregularity.
Sections Cited
148, 143(3)
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Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: SHRI GEORGE MATHAN
आदेश / O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 26.10.2023, passed for the assessment year 2009-2010.
Shri Anil Kochar, ld. AR appeared on behalf of the assessee and Shri S.B.Chakraborthy, ld.Sr. DR appeared on behalf of the revenue.
It was submitted by the ld.AR that the company Pentafour Commercial Pvt. Ltd. vide an order of the Hon’ble Jurisdictional High Court of Calcutta had amalgamated with M/s Brahmaputra Enterprises Limited. It was the submission that the said Brahmaputra Enterprises Limited had amalgamated with Vincent (India) Limited. It was the submission that in the amalgamation, all the assets and liabilities of the amalgamating company had been taken over. It was the submission that when the notice u/s.148 of the Act was issued on the assessee, the assessee M/s Pentafour Commercial Pvt. Ltd. did not exist. It was the submission that the assessment order is liable to be quashed.
In reply, ld. Sr.DR vehemently supported the order of the ld. Assessing Officer and ld. CIT(A).
I have considered the rival submissions. In reply to a specific query to the ld.AR as to when the PAN in the case of M/s Pentafour Commercial Pvt. Ltd. was surrendered. It was submitted that as early as in 2013, the assessee had replied to the TDS officer mentioning that the company M/s Pentafour Commercial Pvt. Ltd. had merged with M/s Brahmaputra Enterprises Ltd. It was further submission that the PAN had been surrendered only after the assessment year 2016-17, insofar as the notice u/s.148 of the Act has been issued on the said PAN of M/s Pentafour Commercial Ltd. Thus, what I find is that there was an amalagamatiion of M/s Pentafour Commercial Ltd. vide an order of the Hon’ble High Court dated 21.09.2010 and the amalgamation was with M/s Brahmaputra Enterprises Ltd. The said Brahmaputra Enterprises Limited amalgamated with M/s Vincent India Limited w.e.f. 01.04.2016 vide an order of the amalgamation by the Hon’ble Jurisdictional High Court. The PAN in relation to M/s Pentafour Commercial Pvt. Ltd. continued to exist. In case of the amalgamation it is by taking over of the entire assets and liabilities of the amalgamating company. This being so, the transaction which has been identified by the Assessing Officer relating to amalgamating company which has been taken over by Vincent India Limited, the assets and liabilities have been taken over in its entirety, obviously it would now be incumbent upon Vincent India Limited to answer on behalf of amalgamated company. Thus, clearly irregularity has taken place that too on the failure on the part of the assessee to respond to the notice in the course of assessment and before the ld. CIT(A). This irregularity is curable which has been held by the Hon’ble Orissa High Court in the case of Shivkumar Agrawal, reported in [1990] 186 ITR 734 (Orissa). When an irregularity has taken place the issue must be restored to the point of the irregularity so that the irregularity can be now cleared and moved forward. This being so, as the irregularity has taken place on the part of the assessee in not producing evidence before the ld. Assessing Officer and the assessee Vincent India Limited is the custodian of assets and liabilities of M/s Pentafour Commercial Limited, the issues in this appeal now stand restored to the file of ld. Assessing Officer for adjudication afresh after providing adequate opportunity of being heard to the assessee to substantiate its case before the Assessing Officer.