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Income Tax Appellate Tribunal, “K” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
Date of Hearing – 22.08.2019 Date of Order – 19.11.2019
O R D E R PER SAKTIJIT DEY, J.M.
The aforesaid appeal by the assessee is against the final assessment order passed under section 143(3) r/w section 144C(13)
2 BASF India Ltd. A.Y. 2008–09 of the Income Tax Act, 1961 (for short "the Act") for the assessment year 2008–09.
In this appeal, the assessee has raised a preliminary issue challenging the validity of the final assessment order passed by the Assessing Officer.
Shri P.J. Pardiwala, the leaned Sr. Counsel for the assessee submitted, the Assessing Officer has passed the assessment order in the name of an entity which is no longer in existence. The leaned Sr. Counsel submitted, though, the Assessing Officer had passed the draft assessment order in the name of amalgamated company and the DRP has also passed its direction by mentioning the name of the amalgamated company i.e., BASF India Ltd., however, the final assessment order has been passed in the name of the non–existing entity. The leaned Sr. Counsel submitted, the fact of amalgamation / merger was intimated to the Assessing Officer on 8th March 2011 along with a copy of the order passed by the High Court approving amalgamation / merger from the appointed date of 1st April 2010. He submitted, in spite of being intimated about the amalgamation / merger, still the Assessing Officer has passed the final assessment order in the name of a non–existing company. Thus, he submitted, the assessment order passed being invalid has to be quashed. In support
3 BASF India Ltd. A.Y. 2008–09 of such contention, the leaned Sr. Counsel relied upon the decision of the Hon'ble Supreme Court in PCIT v/s Maruti Suzuki India Ltd., Civil Appeal no.5409/2019, vide judgment dated 25th July 2019.
The learned Departmental Representative submitted, the draft assessment order was passed by the Assessing Officer in the name of the amalgamated company. He submitted, in the final assessment order due to typographical error, the name of the amalgamated company was omitted. He submitted, such omission/mistake being curable, if there is any defect in the assessment order due to non– mentioning of the proper name of the assessee, it is a curable defect, hence, the assessment order should be set aside to the Assessing Officer for framing de novo assessment by mentioning the correct name of the assessee.
We have considered rival submissions and perused the material on record. The decision relied upon by the leaned Sr. Counsel for the assessee has also been examined by us carefully. Undisputedly, BASF Polyurethanes India Ltd., in whose name the final assessment order under section 144C(13) r/w section 143(3) of the Act has been passed on 19th November 2012, is no longer in existence as it had amalgamated / merged with BASF India Ltd., from the appointed day of 1st April 2010, by virtue of a scheme of amalgamation / merger
4 BASF India Ltd. A.Y. 2008–09 approved by the Hon'ble Bombay High Court vide order dated 14th January 2011. The fact of amalgamation of BASF Polyurethanes India Ltd. with BASF India Ltd. was duly intimated to the Assessing Officer on 8th March 2011, along with all supporting evidence. In fact, learned DRP taking note of the amalgamation / merger has passed its directions by incorporating the name of amalgamated company i.e., BASF India Ltd. In spite of being informed about the fact that BASF Polyurethanes India Ltd. has amalgamated / merged and no longer in existence, still, the Assessing Officer passed the final assessment order in the name of erstwhile company i.e., BASF Polyurethanes India Ltd. Thus, undisputedly, the final assessment order has been passed in respect of an entity which has ceased to exist long back. Now, it is fairly well settled that no order can be passed in respect of a non– existing entity. The Hon'ble Delhi High Court in Spice Entertainment Ltd. v/s CIT, [2012] 247 CTR (Del.) 500, has held that once a company merges with another company by virtue of a scheme of amalgamation, it will lose its existence after such merger. The aforesaid view expressed by the Hon’ble Delhi High Court was again reiterated in PCIT v/s Maruti Suzuki India Ltd., [2017] 397 ITR 681 (Del.). While affirming the view expressed by the Hon’ble Delhi High Court in Maruti Suzuki India Ltd. (supra) and Spice Entertainment Ltd. (supra), the Hon'ble Supreme Court held that the order passed in 5 BASF India Ltd. A.Y. 2008–09 respect of a non–existing entity is invalid. While doing so, the Hon'ble Supreme Court also upheld the view expressed by the Hon’ble Bombay High Court and the Tribunal that the defect in passing the assessment order in respect of a non–existing entity cannot be cured under section 292B of the Act. Thus, the ratio decidendi which follows from the judicial precedents referred to above clearly indicate that an order passed against a non–existing entity has to be declared as invalid. Admittedly, in the facts of the present case, the Assessing Officer has passed the final assessment order in the name of a non–existing entity. Therefore, as per the ratio laid down in the judicial precedents referred to above, the assessment order has to be declared as invalid. Accordingly, we do so and quash the final assessment order dated 19th November 2012.
Since we have quashed the assessment order for the above reasons, the grounds raised contesting the additions made in the assessment order are of pure academic nature, hence, there is no need to deliberate any further on these grounds. However, the issues raised in these grounds are left upon for adjudication if they arise in any other assessment year in future. For the very same reasons, the ground no.1 having become redundant is also dismissed.
6 BASF India Ltd. A.Y. 2008–09