ACIT, NEW DELHI vs. M/S. MAYANK TRADERS PVT. LTD., NEW DELHI

This appeal by Revenue is filed against the order of Learned Commissioner of Income Tax (Appeals)-XXVI, New Delhi-110092, [“Ld. CIT(A)”, for short] dated 28th September, 2015 for Assessment Year 2007-08. The grounds of appeal are as under:

“1. That the CIT(A) has erred in facts and in law in relying upon the decision of High Court in assessee’s case for A.Y. 2002-03 to 2006-07 in holding that the order u/s 153A of the Act is invalid on the ground that no notice u/s 153A was issued to the amalgamating company without considering ITA No.- 6255/Del/2015. M/s Mayank Traders Pvt. Ltd. the fact that the amalgamation was not approved by the Hon’ble HC on the date when the notice u/s 153A was issued to the assessee company.

2. That the CIT(A) has erred on facts and in law in holding that no order can be passed against an entity that had seized to exist on the date of order even in a case where the jurisdiction was validity assumed prior to the amalgamation order by way of notice u/s 153A of Act.

4. That the CIT(A) has erred on facts and in law in allowing the appeal of the assessee without considering that assessee had continued to correspond with the AO in the name of Mayank Traders Pvt. Ltd. even after its amalgamation with OPRL vide Hon’ble HC order dated 18.10.2010.

(2) The core issue in the present appeal before us is whether the Assessment Order passed by the Assessing Officer (“AO”, for short) is valid in law. The Assessee Company was amalgamated with ‘Optus Promoters Private Limited’ vide order dated

ITA No.- 6255/Del/2015. M/s Mayank Traders Pvt. Ltd. 08.10.2010 of Hon’ble High Court of Delhi, passed U/s 391 and 394 of the Companies Act, 1956. Intimation regarding the amalgamation was filed before the AO vide letter dated 22.11.2010. Once again another intimation was sent to the AO vide letter dated 02.12.2010, requesting the AO to note the amalgamation and to issue notices in the name of the transferee company. However, the AO passed Assessment Order dated 31.12.2010 in the case of M/s Mayank Traders Pvt. Ltd., although it had ceased to exist as a result of its amalgamation with ‘Optus Promoters Private Limited’. The Assessee has disputed the validity of the Assessment Order passed in the case of M/s Mayank Traders Pvt. Ltd., which had ceased to exist on the date of the assessment order, as a result of its amalgamation with ‘Optus Promoters Private Limited’.

(3) In the course of appellate proceedings in Income Tax Appellate Tribunal (“ITAT”, for short), the Assessee had filed written submissions, the relevant portions of which is reproduced as under:

“It informed to the AO on 22.11.2010, about the fact of the amalgamation that the Assessee Company was amalgamated with 'Optus Promoters Private Limited’, vide Hon'ble High Court of Delhi's order dated 08.10.2010, u/s. 391 and 394 of the Companies Act, 1956 and filed the intimation dated 08.10.2010 (Page No. 1). It again informed to the AO about the fact of the amalgamation on 02.12.2010 (Pages Nos. 2 to 24) and requested to initiate the proceedings in the name of the transferee company. In aforesaid connection, it is hereby brought to your kind notice that Hon’ble ITAT had already passed an order dated 28.11.2014, in favour of the assessee company, in 5308/Del/2013 and 2356, 2357/Del/2014 (Pages Nos. 25 to 32). The above-said decision of Hon’ble ITAT have already been upheld by Hon’ble High Court of Delhi vide order dated 20.08.2015 in ITA Nos. 466,467,470, 471 & 477/2015 (Pages Nos. 33 to 37). "Held: Para 5: Recently this court has in an order dated 19th August, 2015 in ITA No. 582 of 2015 (PCIT vs. Images Credit and Portfolio Pvt. Ltd.) held that ITA No.- 6255/Del/2015. M/s Mayank Traders Pvt. Ltd. proceedings under section 153C could not be initiated against an entity that has ceased to exist at the relevant time. Similarly, by order dated 3rd August, 2015 in [Spice Enfotainment Ltd. Vs. CIT) it was held by this court that the defect of passing an assessment order in respect of an entity that has ceased to exist on the date of such order, could not be treated as a mere procedural defect. The mere fact that the Respondent communicated to the AO, prior to the Assessment order and subsequent notice, in its name without disclosing the fact of amalgamation with OPPL, will not cure the fundamental defect of the assessment having been framed against an entity that had ceased to exist in the eye of law. Para 6: Consequently, the impugned Common order of the ITAT following the decision of this Court in Vived Marketing Services Pvt. Ltd. (supra) does not call for interference. No substantial question of law arises. The appeals are dismissed.” The assessee company’s submissions of amalgamation are covered in favour of assessee/respondent company of Hon’ble Delhi ITAT’s decision. � In the case of ‘Images Credit and Portfolio Pvt. Ltd. vs. ACIT, in ITA nos. 5301 to 5306/Del/2013 [order dated 19.12.2014] (Pages Nos. 38 to 44). This order already has been upheld by Hon’ble High Court of Delhi vide order dated 19.08.2015 (Pages Nos. 45 to 50). � In the case of ‘ACIT vs. Micra India Pvt. Ltd.’, I.T.A. Nos. 1060 to 1065/Del/2012 (orde dated 21.09.2012). � In case of ‘ACIT vs SPN Milk Products Industries Pvt. Ltd.’, I.T.A. Nos. 565 to 570/Del/2012 (order dated 22.03.2013) � In case of ‘ACIT vs. Dimension Apparels Pvt. Ltd.’, I.T.A. Nos. 571 to 576/Del/2012 (order dated 22.02.2013) � In case of ‘ACIT vs. Chanakaya Exports Pvt. Ltd.’, ITA Nos. 539 to 544/Del/2012 (order dated 19.07.2013)

Reliance is made on the following judgments:- � Delhi High Court’s order in the case of ‘CIT vs. Vivid Marketing Servicing Pvt. Ltd.’, of 2009 (Page No. 51). � Delhi High Court’s order in the case of ‘Spice Entertainment Ltd. vs. CIT, ITA No. 475 of 2011’, dated 03.08.2011 (Pages Nos. 52 to 64).

Hope above is found in order to dismiss the revenue’s appeal.”

(3.1) The Assessee also filed a Paper Book containing following particulars:

ITA No.- 6255/Del/2015. M/s Mayank Traders Pvt. Ltd. “1. Copy of letter dated 22.11.2010, intimated by the assessee company that the assessee company stands amalgamated with ‘Optus Promoters Private Limited’, vide Hon’ble High Court of Delhi’s order dated 08.10.2010.

(4) At the time of hearing before us, the Ld. Counsel for assessee submitted, at the outset, that the issue in dispute is covered by order of Co-ordinate Bench of ITAT, Delhi in Assessee’s own case vide order dated 28.11.2014 in 5308/Del/2013 & 2356 & 2357/Del/2014 for Assessment Years 2005-06, 2006-07, 2003-04 & 2004-05 respectively. At paragraph no. 8 of the aforesaid order dated 28.11.2014 of Co- ordinate Bench of ITAT (Delhi), it was held, following the decision in the case of CIT vs. Vived Marketing Services Pvt. Ltd. in ITA No. 273 of 2009 , that the Assessment Order passed on the amalgamated company is not amenable to assessment

ITA No.- 6255/Del/2015. M/s Mayank Traders Pvt. Ltd. proceedings. The Ld. Counsel for Assessee further submitted that the aforesaid order dated 28.11.2014 of Co-ordinate Bench of ITAT, Delhi has also been upheld by order of Hon’ble Delhi High Court copies whereof were already filed by assessee in the Paper Book. The Ld. CIT(DR) fairly conceded that the issue in dispute is covered in assessee’s favour by the aforesaid orders of Co-ordinate Bench of ITAT, Delhi and Hon’ble High Court of Delhi in assessee’s own case. Respectfully following these orders; we also decide the issue in assessee’s favour and hold that the Assessment Order passed on the amalgamated company is not amenable to the assessment proceedings. Accordingly the Assessment Order framed by the AO is hereby annulled.

(5) In the result, appeal of Revenue is dismissed for statistical purposes.

Order pronounced in the open court on 27th day of February, 2019.