I.T.O.,WARD-9(4), KOLKATA vs. M/S STONEY COMMERCIAL PVT LTD, KOLKATA

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ITA 1997/KOL/2019Status: DisposedITAT Kolkata14 February 2020AY 2009-103 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that an assessment framed in the name of a non-existent entity is a nullity, even if the assessee participated in the proceedings. The Revenue's appeal was dismissed due to this and other procedural failures.

What were the facts?

The Revenue appealed against the CIT(A)'s order which quashed an assessment framed against the assessee. The assessment was framed in the name of an entity that had merged with another company prior to the assessment year.

What were the issues?

Whether an assessment framed in the name of a non-existent entity is valid. Whether the Revenue's appeal is maintainable when filed against a non-existent entity.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 263,Section 292BB

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “B”, BENCH KOLKATA

Before: SHRI P.M. JAGTAP, V.P & SHRI S. S. GODARA, JM

For Appellant: Shri Imokaba Jamir, CIT
Hearing: 03/02/2020Pronounced: 14/02/2020

BEFORE SHRI P.M. JAGTAP, V.P & SHRI S. S. GODARA, JM आयकर अपीलसं./ (�नधा�रण वष� / Assessment Year: 2009-10) ITO, Ward-9(4), Kolkata Vs. M/s Stoney Commercial Pvt. Ltd. 16, Ganesh Chandra Avenue, 7th Floor, Kolkata – 700 013. �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAMCS5873J (Appellant) .. (Respondent) Appellant by : Shri Imokaba Jamir, CIT Respondent by : Shri A. K. Gupta, FCA सुनवाईक�तार�ख/ Date of Hearing : 03/02/2020 घोषणाक�तार�ख/Date of Pronouncement : 14/02/2020 आदेश / O R D E R Per Shri S. S. Godara: This Revenue’s appeal for assessment year 2009-10 arises against the Commissioner of Income Tax (A) - 17, Kolkata dated 28.03.2019 passed in Case No.439/CIT(A)-17/Kol/15-16 involving proceedings u/s 143(3)/236/147/143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

2.

It transpires at the outset that this Revenue’s appeal suffers from nine days’ delay in filing. We take into consideration solemn averments in its condonation petition and on account of no objection from the assessee side to condone the impugned delay and proceed to adjudicate the appeal on merits.

3.

The Revenue has pleaded two substantive grievances in its instant appeal. Its former grievance reads that the CIT(A) has erred in law and on facts in reversing the Assessing Officer’s action treating assessee’s share capital of Rs.20,43,00,000/- as unexplained cash credits in assessment order dated

M/s Stoney Commercial Pvt. Ltd. 31.03.2014. We notice at the outset that the CIT(A)'s corresponding detailed discussion has nowhere dealt with this former issue on merits. Learned CIT-DR at this stage submitted that the CIT(A)'s lower appellate order has in fact held that since the Assessing Officer had framed the impugned assessment in case of M/s Stoney Commercial Pvt. Ltd./assessee-respondent, the same deserves to be quashed. Mr. Jamir's case accordingly is that we are in assessment year 2008-09 involving the impugned assessment dated 31.03.2014 u/s 143(3)/263/147/143(3) of the Act, therefore, the same ought not to have been quashed in view of an amalgamation scheme in issue approved by the hon'ble jurisdictional high court dated 11.09.2011 w.e.f. 01.04.2010. Section 292BB is also quoted in support of that once the assessee has itself participated in the assessment proceedings, the above statutory provision comes into play.

4.

Learned authorized representative has strongly supported the CIT(A)'s action quashing the impugned assessment framed in case of non-existing entity i.e. M/s Stoney Commercial Pvt. Ltd.

5.

We have given our thoughtful consideration to the foregoing rival contentions. We notice that the issue sought to be raised at the Revenue's behest is that the CIT(A) ought not to have quashed the impugned assessment framed in case of the alleged non-existent entity is no more res integra in view of the hon'ble apex court's latest decision in PCIT vs. Maruti Suzuki India Ltd. (2019) 107 taxmann.com 375 (SC) that such an assessment framed in case of an non-existent entity is a nullity. Their lordships have also considered section 292BB of the Act as well that an assessment in case of a non-existing entity does not involve mere procedural violation as well. Coupled with this, we also notice that although the original assessee i.e. M/s Stoney Commercial Pvt. Ltd. stood merged with M/s Cosmic Consumer Goods Pvt. Ltd. on 11.09.2011 w.e.f 01.04.2010 and the latter also filed its appeal before the ld. CIT(A), the Revenue has chosen to implead only the former entity as the respondent before us. We conclude in these facts and circumstances that both these failures on Revenue's part in not framing assessment in case of M/s Cosmic Consumer Goods Pvt. Ltd. as well as filing the instant

M/s Stoney Commercial Pvt. Ltd. appeal in case of an non-existent entity is fatal to its cause. The CIT(A)’s findings under challenge are affirmed therefore.

6.

This Revenue’s appeal is dismissed.

Order is pronounced in the open court on 14.02.2020.

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