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Income Tax Appellate Tribunal, KOLKATA BENCH “A”, KOLKATA
Before: SH. S.S.GODARA & DR. A.L. SAINI&
ORDER
PER SH. S.S.GODARA, JUDICIAL MEMBER This assessee’s appeal for AY 2012-13 arises against the order dated 02.08.2018 passed by the Commissioner of Income Tax (Appeals)-4, Kolkata [in short “CIT(A)”] in Appeal No.675/CIT(A)-4/14-15 in proceedings u/s 143(3) of the Income tax Act, 1961 (in short the “Act”). Heard both the parties. Case file(s) perused.
It transpires at the outset that the CIT(A) has refused to condone around five years delay in filing of assessee's appeal in lower appellate proceedings. He has thus affirmed the AO's action making long term capital gains addition on sale of agricultural land of ₹1,84,80,232/-. The Revenue's Cross Objection No. 16/Kol/2019 has supported the impugned addition before us.
CO No. 16/KOL/2019 Assessment Year: 2007-08 Deeplok Builders Pvt. Ltd.
After giving our thoughtful consideration to the foregoing rival proceedings, we find that the instant raise is a pure legal question of assessment framed in a non-existence entity’s case. Case file suggests that the original assessee herein M/s. JMB Properties Pvt. Ltd. had filed its return on 31.10.2007. This followed its amalgamation with the appellant herein i.e. M/s. Deeplok Builders Pvt. Ltd. vide scheme approved by hon'ble Calcutta high court in Company Petition No. 14 of 2008 connected with Company Application No. 807 of 2007. The said amalgamation scheme stood approved on 17.03.2008 having transfer date as 01.04.2007 with all rights and liabilities. That being the case, the AO's regular assessment dated 03.12.2009 appears to have been framed on a non-existence entity only. The appellant herein i.e. successor of the original assessee M/s. JMB Properties Pvt. Ltd. then filed its lower appeal after a period of almost 5 years. It submitted before the CIT(A) that there was a rectification petition filed on 25.07.2013 before the AO as well.
It is in this backdrop of facts that the CIT(A) has not only declined condonation of delay of around five years in filing of lower appeal but he has also confirmed the impugned addition of long term capital gains. We are of the opinion in these facts and circumstances that once the assessment itself has been framed in case of non-existent entity, hon'ble apex court's latest decision in PCIT vs. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375 (SC) holds that such an assessment is invalid and not sustainable in the eyes of law. We quote their lordship's yet another decision in Collector Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) that the cause of substantive justice must prevail overall technical aspects and condone the Page | 2 CO No. 16/KOL/2019 Assessment Year: 2007-08 Deeplok Builders Pvt. Ltd. assessee's delay of almost five years in filing of the lower appeal since it is an instance of amalgamation of entities. We keep in mind our foregoing discussion and quash the impugned assessment itself. The assessee's appeal succeeds and Revenue's Cross Objection No. 16/kol/2019 fails.
Before parting, it is noted that the order is being pronounced after ninety (90) days of hearing. However, taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. For coming to such a conclusion, we rely upon the decision of the Co-ordinate Bench of the Mumbai Tribunal in the case of DCIT vs. JSW Limited in ITA No. 6264/Mum/2018 & 6103/Mum/2018, Assessment Year 2013-14, order dated 14th May, 2020.
This assessee's appeal ITA No. 1895/KOL/2018 is allowed and Revenue's Cross Objection No. 16/Kol/2019 is dismissed. Ordered accordingly. Order pronounced in the open court on 10.06.2020.