UTV SOFTWARE COMMUNICATIONS LIMITED (AMALGAMATED ENTITY WITH UTV TELE TALKIES LIMITED),MUMBAI vs. ITO 11(1)(4), MUMBAI

O R D E R

PER RAMIT KOCHAR, Accountant Member:

raised by assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called “the tribunal”) read as under:- “1. The Assessment Order u/s 143(3) is void and bad in law having been passed on a non existent entity, despite the Assessing Officer (AO) having full knowledge of the merger of the entity with UTV Software Communications Limited (USCL) as on the date of passing the order. The AO as well as the Honourable CIT (Appeals) have ignored judicial precedents including that of the jurisdictional Courts.

2. Without prejudice to Ground 1 above, on the facts and in the circumstances of the case and in law, the AO erred in disallowing Rs.23,41,000/- being cost of production of abandoned TV serial. The AO assumed a commercial viability of the abandoned serial and erred in applying Rule 9A of the Income Tax Rules, which pertains to cinematograph films and not for TV serial.

3. Without prejudice to Ground 1 above, on the facts and in the circumstances of the case and in law, the AO erred in adding back Rs.95,511/- pertaining to Cenvat credit of service tax relying on section 145A of the Income Tax Act, 1961. The AO ought to have known that service tax credit on input services was not towards any purchase or sale of goods and hence the said section was inapplicable.

4. Without prejudice to Ground 1 above, on the facts and in the circumstances of the case and in law, the AO erred in disallowing adhoc Rs. 15,02,716/-on an assumption of an element of personal expenses.

5. Without prejudice to Ground 1 above, on the facts and in the circumstances of the case and in law, the AO erred in adding of Rs.45,15,489/- to the income of the Appellant being unreconciled amount of Form 26 AS.

6. Each of the above grounds are without prejudice to the other.The Appellant craves leave to add, to alter, to amend or to delete any ground of appeal, at or prior to hearing of the appeal as may be required to enable the Hon'ble Appellate Authority to decide this appeal in accordance with law.”

3.3 The assessee vide another reply dated 26.11.2015 filed during assessment proceedings conducted by the AO u/s 143(3) read with Section 143(2) of the 1961 Act submitted that under scheme of amalgamation approved by Hon‟ble Bombay High Court it got merged with its parent company „UTV TV Content Limited‟(page 110/pb) . It explained that subsidiary company got merged with parent company and share capital of subsidiary company stood cancelled. The other shareholder of the assessee namely Mr Prashant Jadhav was paid purchase consideration by „UTV TV Content Limited‟ prior to merger of the assessee with it, for shares held by him in the assessee company. The note submitted by the assessee before the AO vide reply dated 26.11.2015 filed during the course of assessment proceedings u/s 143(3) read with Section 143(2) of the 1961 Act conducted by the AO, reads as under: “1.1 The assessee has merged into its then 100% parent company UTV TV Content Limited(assessed under ITO 16(1)(5)) w.e.f. 1st April , 2013 . Copy of High Court order has already been submitted to you. As explained in our submission dated 3rd November, 2015 , as it was a case of subsidiary being merged into parent, the share capital of subsidiary is cancelled and no share need to be allotted or consideration need to be paid. Shares held by other shareholder, Mr Prashant Jadhav(assessed under ITO 25(2)(4) were purchased by UTV TV Content Limited prior to merger and was paid Rs. 24,500 as purchase consideration.” Thus, as could be seen above, the assessee has brought to the notice of the Revenue about its merger with its ultimate holding company namely „UTV Software Communications Limited‟ vide several communications listed above. We have carefully gone through these communications addressed by the assessee to Revenue , which are all placed in factual paper book filed with tribunal, which is now placed in file. 3.4 Our attention was also drawn by learned counsel for the assessee to para 4.2 and 4.3 of the assessment order dated 01.02.2016 passed by the AO u/s 143(3) of the 1961 Act, which is reproduced here under:- “ 4.2 During the course of assessment proceedings it is noticed that loss arose on account of write off of the cost of production of Rs.23,41,000/- in respect of the TV serial titled “Anandam”. Accordingly, the assessee company was asked to substantiate the write off and also asked to furnish the explanation/details of written off expenses in respect of cost pertaining to serial "Anandam", In response the A.R. of the assesses company vide letter dtd.29.4.2015 & 19th November, 2015 staled that "Due to management decision to close the business and merge the Company with UTV Software Communications Limited, pending production of all the serials was completed. Further, Rs.23 lakhs of cost pertaining to a serial 'Anandarn‟ was written off as the same was abandoned due to non-feasibility in mew of the management”. 4.3 I have gone through the submission of the AR of the assessee company. I do not find any merits in his submission for the reasons discussed below. a. Pursuant to the Scheme of Arrangement under Section 391 to 394 and other applicable provisions of the Companies Act, 1956 sanctioned by the Bombay High Court of M/s UTV Teletalkies Ltd. with M/s UTV Software Communications Ltd. with effect from 1st April 2013, all assets, liabilities & reserves of the Transferor Companies shall be recorded in the books of Transferee Company at their respective book values. There is no reason for written off the said expenses as the going concern i.e. M/s UTV Software Communication Ltd. is also in name line of business and there was every possibility that going concern will complete the said alleged production. The purpose for which the expenses were incurred could not be fulfilled. Therefore, the action of the assessee to write off the cost of production pertaining to serial "Anandam” is premature.” Thus, from para‟s 4.2 and 4.3 of the assessment order dated 01.02.2016, it is clearly evident that the AO was fully aware and having knowledge of the merger of „UTV Tele Talkies Ltd.‟ with „UTV Software Communication Ltd‟ . We have already seen that the assessee had brought to the notice of the Revenue about its merger with „UTV Software Communications Limited‟ vide several communications listed above. Despite being informed about the merger of the assessee company with „UTV Software Communications Limited‟ by the assesssee vide several communications as listed above and the AO despite being fully aware and having complete knowledge of the aforesaid merger of „UTV Tele Talkies Limited‟ with „UTV Software Communications Limited erred in not conducting an enquiry as is contemplated u/s. 170 of the Act read with Order 22 Rule 10 of CPC which requires a prima facie enquiry for substitution of successor-in-interest although it is a prima facie enquiry and not a very detailed enquiry as laid down by Hon‟ble Supreme Court in the case of Amit Kumar Shaw v. Farida Khatoon 2005 (11) SCC 403 to substitute successor in interest . We find that despite voluminous evidences on record filed by the assessee before the AO intimating about its merger, no prima facie enquiry was conducted by the AO to bring on record successor in interest to the assessee viz. „UTV Software Communications Limited „and instead the AO proceeded to frame an assessment order dated 01.02.2016 against a non existent entity viz. the assessee u/s 143(3) of the 1961 Act , which in our considered view is fatal to the sustaining of an assessment framed by the AO on a non existent entity . Despite several communications filed by the assessee intimating about its merger, the AO chose not to bring on record name of the successor in interest pursuant to merger of the assessee namely „UTV Tele Talkies Limited‟ with its ultimate holding company „UTV Software Communications Limited‟ which is fatal for upholding assessment framed by the AO keeping in view factual matrix of the case before us. The landmark judgment of Hon‟ble Delhi High Court in the case of Hon‟ble Delhi High Court in the case of Yapi Kredi Bank (Deutchland) AG v. Ashok K. Chauhan & Ors. In FAO(OS) 511/2007, CM Appl. 14878/2008 & 3645/2012 dated 17.01.2013 is an authority which has considered entire law on the subject . 3.5 It is also claimed that first appeal was filed before learned CIT(A) and an additional ground was raised before learned CIT(A) to quash the assessment on the grounds that the AO had framed an assessment against non-existent entity viz. the assessee, wherein following contentions were raised before Ld. CIT(A) as are recorded in the appellate order dated 24.03.2017 passed by learned CIT(A), as under:- “Additional Ground of appeal Assessment completed in a non-existent assessee The Learned Assessing Officer (AO) has erred in completing the assessment on a non-existent assessee which was already merged as on the dale of passing the order, with UTV Software Communications Limited (USCL). Hence, the order is void abinitio and bad in law. The AO ought to have followed jurisdictional judicial precedent and not passed the order on a non-existent assessee. Relief: It is prayed that the order be quashed as it is bad in law. Submission dated 26.10.2016 With reference to above mentioned subject regarding appeal proceedings, we submit on behalf of our client as under: 1.UTV Teletalkies Ltd ('Appellant') was an Indian company incorporated under the Companies Act, 1956 . As on the date of assessment, as well as this Appeal, the Appellant stands merged with its UTV Software Communications Lid (USCL).

2. As per the scheme of amalgamation approved by the Hon'ble Bombay High Court, UTV Teletalkies Ltd merged with USCL w.e.f 1/4/2013.The Assessing Officer was duly informed of the merger in the course of assessment by the assessee , 3. As the merger order was pronounced on 11th April, 2014, it was UTV Teletalkies Ltd which had filed the tax return for AY 2013-14 on 25th September, 2013 declaring a Loss of Rs1,70,568/- .

5. The Learned AO passed the assessment order under Section 143(3) of the Act dated 3rd March 2015 making following additions/disallowance: • Abandoned TV Serial written off- Rs 23,41,000 • Unutilised Cenvat credit- Rs 95,511. • Adhoc disallowances of expenses- Rs 15,02,716 • Unreconciled amount of Form 26AS betwcen UTV Teletalkies and USCL -Rs 45,15,489

7. The Learned AO has further initiated penalty proceedings under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income. Appellant’s Contention: The Appellant has filed before you an additional ground challenging the legality of the Assessment order and begs to plead its submission in this respect first: 8. Additional Ground - Assessment completed on a non-existent assessee: 8.1 The appellant has taken this ground as an additional ground before you. 8.2 The Appellant submits that an assessment order on a non-existent assessee is void ab inito and bad in law, 8.3 The fact that there was an amalgamation was within the knowledge of the Assessing Officer when he completed the assessment. 8.4 The merged Company (USCL) had written to the Assessing Officer a letter dated 31/7/2014 filed on 6/8/2014 informing him about this fact and also enclosing the scheme of amalgamation as approved by the High Court of Bombay, as well as letter dated 5 August, 2014 filed on 6/8/2014 for surrender of PAN Number. The primary facts necessary for its assessment were therefore disclosed fully and truly. 8.5 The appellant had again, vide reply dated on 29/04/2015 in response to assessment, questionnaire, informed the AO of the merger. In response to specific requirement of AO ,the Appellant had again filed a copy of High Court Order for merger and copy of financial statements of merged entity as well as a note on the scheme of arrangement sanctioned by the Hon'ble High Court. 8.6 Thus, not only was the AO made aware repeatedly by Appellant, he has also captured the fact in Paras. 4.2 and para 4.3 .a. of his Order.

8.7 The Appellant submits that a company incorporated under the Indian Companies Act is a juristic person. It takes its birth and gets life with incorporation and it dies with the dissolution as per the provision of the Companies Act. On amalgamation, the company ceases to exist in the eyes of the law. 8.8 The appellant submits that the assessment order is bad in law and should be quashed. 8.9 The appellant relies on various judicial precedents in this regard laid down by the jurisdictional courts as well as other courts. Reliance is placed on: • Mumbai ITAT in (order pronounced 2016) in Orbit Corporation Ltd V/s DCIT wherein, it was held that the assessments completed in the name of the non existing company was held as void ab initio. It is specific to note that in this judgment the ITAT has carved out a distinction from its own judgment in Century Enka. Ltd v/s DCIT (101 ITD 489) slating that in that case the matter was set aside to the file of the AO as the assessee had failed to give-intimation to the AO unlike the Appellant's case. In the Appellant's case ,AO was sufficiently informed, hence the Order is bad in law,. • Even in Century Enka Ltd v/s DCIT (101 ITD 489) by Mumbai ITAT, it was held that if the assessment is framed in the name of deceased or an entity which is not in existence, by the AO who has knowledge of this facts, the assessment is bad in law as the defect is not curable. • Instant Holdings Ltd. v/s ACIT (ITA no. 4593/Mum/2011) (Order pronounced in 2016), wherein the Mumbai Tribunal has relied on various orders and judicial precedents in particular the judgment of the Hon'ble Delhi High Court in the ease of Spice Infotainment Limited and set aside the assessment order which was passed on the assessee company which was non-existent as it stood amalgamated with another company. The ITAT Mumbai has specifically taken note of the argument of the revenue that the amalgamating company was in existence throughout the previous year relevant to the assessment year under consideration and therefore the order passed in the name of the amalgamating company was a valid assessment. The ITAT opined that the aforesaid argument of the revenue deserves to be repelled.

• CIT vs Micron Steel Pvt Ltd & Ms Steels Pvt Ltd the Delhi High Court in & 21-24 /2014 held that: "the issue urged is no longer res integra. As stated earlier, Spice Entertainment (supra) is an authority for the proposition that completion of assessment in respect of a nonexistent company , due to the amalgamation order, would render assessment in the name and in respect of the original assesses company, a nullity. The Court held that "it is difficult to digest the circuitous route adopted by the Tribunal holding that the assessment was in fact in the name of amalgamated company and there was only a procedural defect". Section 481 of the Companies Act provides for dissolution of the company. The Company Judge in the High Court can. order dissolution of a company on the grounds staled therein. The effect of the dissolution is that the company no more survives. The dissolution puts an end to the existence of the company. It is held in M.H. Smith (Plant Hire) Ltd. Vs. D.L. Mainwaring (T/A Inshore), 1986 BCLC 342 (CA) that "once a company is dissolved it becomes a non- existent party and therefore no action can be brought in its name. Thus an insurance company which was subrogated to the rights of another insured company was held not to be entitled to maintain an action in the name of the company after the latter had been dissolved". • In Spice Infotainment Vs CIT 247 CTR 500 (Del) the Delhi High Court held that "After the sanction of the scheme on 11th April, 2004, Spice ceases to exit w.e.f. 1st July, 2003. Even if Spice had filed the, returns, it became incumbent upon the Income tax authorities to substitute the successor in place of the said "dead person". When notice under Section 143 (2) was sent, the appellant/ amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of the appellant on record. Instead, the Assessing Officer made the assessment in the name of Spice which was non existing entity on that day. In such proceedings and assessment order passed in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect. Mere participation by the appellant would be of no effect as there is no estoppels against law."

* The Hon‟ble Delhi High Court after referring to the judgment of the Hon‟ble Supreme Court in the case of (i) Saraswati Industrial Syndicate v. CIT , 186 ITR 278 and (ii) General Radio and Appliances Co. Ltd. v. M.A. Khader (1986) 60 Comp Case 1013 held that framing of assessment against a non-existing entity goes to the root of the matter, which did not constitute a procedural irregularity but a defect. Relief: The appellant prays the Assessment is bad in law & should be quashed.”

3.6 It was submitted by learned counsel for the assessee that Ld. CIT(A) even called for remand report from the AO. It was submitted that the AO submitted remand report dated 23.02.2017 to learned CIT(A) wherein the AO has not controverted that „UTV Tele Talkies Limited‟ was merged with its ultimate holding company „UTV Software Communications Limited‟ , which remand report of the AO is reproduced hereunder:- “ At the outset, I strongly object to the additional ground raised by the assessee at this stage. Without prejudice to the above, I am offering my comments on the submissions made by the assessee as follows:

2. The assessee's grievance seems to be that an assessment order on a nonexistent assessee which was already merged as on the date of passing the order, with UTV Software Communications Limited, order is void ab initio and bad in law. It may be stated, at the outset, that the objections are not acceptable as the same are unfounded. The reasons for stating so are as under:- i) The assessee has filed its return of income for the A.Y. 2012-13 i.e. Financial Year 2011-12 on 25.09.2013 for the period 1.4.2011 to 31.03.2012, During the entire stretch of the financial year the assessee has operated as UTV Tele Talkies Limited. During the period for which assessment has been made, amalgamation had not taken place. ii) Notice for assessment was issued to UTV Tele Talkies Limited for this *'Un-amalgamation period" iii) The assessee has issued a letter of Authority as "We M/s UTV Tele Talkies Limited, (PAN: AABCU0934H), hereby authorize under Section 288 of the Income Tax, 1961" to appear before the A.O. in the case of M/s UTV Tele Talkies Ltd. ( copy enclosed). iv) Thus, the assessee has allowed itself to be represented as " M/s UTV Tele Talkies Limited" v) During the course of assessment proceedings the assessee has not objected to the proceedings being carried out in the name of M/s UTV Tele Talkies Ltd.

3. Further, the A.Rs of the assessee during the assessment proceedings informed that the company has amalgamated. Further the notices u/s 143(2) and 142(1) has also been received by the present company and has been duly complied with by it, and, therefore, the present amalgamated company was fully aware about the assessment proceedings being taken up in respect of the assessment of amalgamating company, viz. M/s UTV Tele Talkies Ltd. for the period prior to the amalgamation, and therefore, mere because in the body of the assessment, only the name of amalgamating company i.e. M/s UTV Tele Talkies Ltd. was only mentioned instead of M/s UTV Tele Talkies Ltd. (Now Merged with UTV Software Communications Ltd.), it would not make the assessment order to be null and void so as to render the same liable to be quashed as void ab initio. The assessment order is in substance and effect is in conformity with intent and purpose of the law, and the amalgamated company was well aware that the assessment was being made upon it in respect of the income of the amalgamating company, namely, M/s UTV Tele Talkies Ltd., which has since been amalgamated with M/s UTV Software Communications Ltd. w.e.f. 1st April,2013 vide Hon‟ble Bombay High Court's order dated 11th April,2014. After completion of scrutiny assessment, the copy of assessment order and demand notice was served upon the present amalgamated company. Having received the assessment order and demand notice, it is further interesting that the present amalgamated company has even filed the appeal against the assessment made by the AO before the CIT(A) in its own name mentioning the title as ''UTV Tele Talkies Limited (Now merged with UTV Software Communications Limited)" in the case of assessment made in the name of M/s UTV Tele Talkies Ltd.. which company stands amalgamated with appellant company i.e. M/s UTV Tele Talkies Limited (Now merged with UTV Software Communications Limited). It is, thus, clear that the present amalgamated company has participated in assessment proceedings as well as CIT(A) appeals proceedings taken up by the A.O. & Hon'ble CIT(A). The conduct of the amalgamated company clearly establishes the fact that the present amalgamated company was well aware that the assessment was being made against it in the assessment of M/s UTV Tele Talkies Limited, being represented by appellant company M/s UTV Tele Talkies Limned (Now merged with UTV Software Communications Limited) i.e. amalgamated company, and, therefore, no prejudice has been caused to the assessee so as to render the assessment order as void ab initio and bad in law. The various decisions relied upon by the A.R. for the assessee are distinguishable on facts, and do not applicable to the facts of the present case. 3, The mere omission the name of M/s UTV Tele Talkies Limited (Now merged with UTV Software Communications Limited} i.e. amalgamated company in the body of assessment is a mere procedural defect covered by Section 292B of the Act, Section 292B provides that no return of income, assessment, notice, summons or other proceedings, furnished "or made or issued or taken or purported to have been furnished or made or taken in pursuance to any of the provisions of the Act, shall be invalid or shall he deemed to be invalid merely by raising of any mistake, defect, or omission of such return of income, assessment, notice, omission or other proceedings is in-substance and effect in conformity with or according to the intent and purpose of the Act.

The moot question is in whose name should the assessment order be made ? 3.1. This issue may gain significance if the assessee has operated in its original name during a part of the year and has amalgamated thereafter. However, in this case, for the entire financial year ( AY. 2012-13} the assessee has operated in its original name itself. Therefore, there should be no scope for any confusion on this account. 3.2 Furthermore, and without prejudice to the above it may also be stated that even in cases where the assessee has operated in its original name for a part of the year, various courts have held that the assessment has to be made in the name of the amalgamating assessee. To cite a few of those decisions, we may refer to the following :- 4. Motor Sales vs. Commissioner of Income-tax 230 ITR-44 (All) " The short question for consideration is whether the business of the firm was succeeded by the company and whether there was succession within the meaning of section 170 of the Act. The authorities clearly held that the business of the firm was distinct from the business of the company. The Appellate Tribunal relied on the case of CIT vs. A.W. Figgies and Co. (1953) 24 1TR 405 (SC). In this case also, the assessee, a partnership firm, carried on the business and that was converted in the year 1947 into a limited company. The Appellate Tribunal and the High Court both held that there was succession within the meaning of section 25(4) of the Indian Income tax Act, 1922, analogous to section 170 of the Act. The Supreme Court concurred with High Court saying ( page 409} " We have no doubt that the Tribunal and the High Court were right in holding that in spite of the mere changes in the constitution of the firm, the business of the firm as originally constituted continued as tea brokers right from its inception till the time it was succeeded by the limited company and that it was the same unit all through, carrying on the same business, at the same place and there was no cesser of that business or any change in the unit". In the instant case, the successor (transferee company) M/s UTV Software Communications Ltd. is also in same line of business of predecessor (transferor) i.e. M/s UTV Tele Talkies Ltd. and that it was the same unit all through, carrying on the same business, at the same place. For the sake of convenience the place of business of amalgamating (transferor) company and amalgamated (transferee) company is reproduced here :- Predecessor (transferor) /amalgamating Successor(transferee)/ company amalgamated company M/s. UTV Tele Talkies Ltd., M/s UTV Software Flat No. 1181-1182, Communications Ltd. 1ST Floor, Building No.14, Flat No.1181-1182, 1st Solitaire Corporate Park, Guru Floor, Hargovindji Road, Chakala, Building No. 14, Andheri (E), Mumbai-400 093. Solitaire Corporate Park, Guru Hargovindji Road, Chakala, Andheri (E), Mumbai-400 093.

by the assessee be dismissed forthwith. 14 ****

15. In the light of the above, I once again humbly submit that the additional ground raised by the assessee be dismissed forthwith.”

3.7 The assessee in rejoinder to remand report , submitted before learned CIT(A) that the AO has admitted in his remand report that he had knowledge of the fact the assessee company got merged with its ultimate holding company „UTV Software Communication Limited‟. The AO had in fact in his assessment order as well in remand report has captured the factum of merger of the assessee with „UTV Software Communication Limited‟. The assessee claimed that it participated in the assessment proceedings and duly informed the AO of the fact of its merger with „UTV Software Communication Limited‟ through series of communications. Thus, it was claimed that assessment order suffers from an incurable defect and is bad in law which is liable to be quashed. The assessee also relied upon large number of judicial precedents before learned CIT(A) to contend that an assessment order is bad in law liable to be quashed and the defect in assessment order by way of framing of an non existent entity is not a curable defect and the assessment is bad in law liable to be quashed. 3.8 The learned CIT(A) rejected the aforesaid contentions of the assessee with respect to the legal jurisdictional issue as to framing of an assessment on non existent company , by holding as under vide appellate order dated 24.03.2017 :-

Additional Ground During the course of appellate proceedings the appellant raised additional ground. In the said ground it is contended that the assessment completed on a non- existent assessee is bad in law. The same ground was sent to the Assessing Officer for remand report. On perusal of the said remand report I find that the notice of assessment was issued for period prior to amalgamation. Moreover, the Assessing Officer also contended that the appellant also issued the letter of authority in the name of M/s. UTV Teletalkies Ltd which was duly accepted by the AR. I have considered the rival submissions and find that the appellant has participated in the assessment proceedings time to time without a whisper on the non- maintainability of the notice issued by the Assessing Officer. Once the same was acted upon by the appellant and AR, the ease is hit by Sec 292BB which prevents such type of situations to be adjudicated at a later stage. Therefore, on the facts and the case laws relied upon by the appellant I find that the contention of the appellant is not only belated but not tenable in law. Accordingly, the additional ground is rejected.

3.9 Our attention was also drawn by learned counsel for the assessee to the following judgments to contend that assessment in question is liable to be quashed , the said judgments are placed in legal paper book separately filed by the assessee with tribunal, as under: a) Hon‟ble Bombay High Court judgment in the case of CIT v. Swastik Rubber Products Limited (1983) 140 ITR 304(Bom.). b) Dismissal of appeal and SLP by Hon‟ble Supreme Court in the case of CIT v. Spice Enfotainment Limited in Civil No. 285 of 2014 , dated 02.11.2017. c) Hon‟ble Delhi High Court judgment in the case of Spice Entertainment Limited v. Commissioner in & 476 of 2011 , dated 03.08.2011. d) Hon‟ble Delhi High Court judgment in the case of PCIT v. Nokia Solutions & Network India Private Limited reported in (2018) 90 taxmann.com 369(Delhi) e) Hon‟ble Karnataka High Court judgment in the case of CIT v. Intel Technology India Private Limited reported in (2015) 57 taxmann.com 159(Kar.) f) Dismissal of SLP by Hon‟ble Supreme Court in the case of ACIT v. Dharmnath Shares & Services Private Limited SLP (Civil) Diary No. 41239 of 2018 reported in (2018) 100 taxmann.com416(SC). g) Mumbai-tribunal decision in the case of Instant Holdings Ltd. v. ACIT in ITA no. 4593/Mum/2011 and ITA No. 4748/Mum/2011 , vide order dated 09.03.2016 h) Mumbai-tribunal decision in the case of Orbit Corporation Ltd. v. DCIT in ITA no. 2411/Mum/2013 and ITA no. 6928/Mum/2010 and ITA no. 2413/Mum/2013 for AY 2007-08 and 2008-09 vide common order dated 21.03.2016.

3.10 The assessee at this stage during the course of hearing was directed by the Bench to file various compliances made by it in pursuance to the directions giving by Hon‟ble Bombay High Court in its order dated 11.04.2014 sanctioning scheme of amalgamation , vide para no. 18-20 (page no. 65 of the paper book). The assessee in compliance to the directions of the Bench has filed following documents in connection with compliances made by it in pursuance of directions issued by Hon‟ble Bombay High Court in its order dated 11.04.2014 vide para 18 to 20, which are placed in file : a) Copy of documents for lodging a copy of the order of Hon‟ble Bombay High Court and an approved scheme of amalgamation with Stamp Authorities on 16.05.2014 and copy of acknowledgement of stamp duty paid on 15-05-2014. b) Form No. INC -28 filed electronically on 22.05.2014 by „UTV Tele Talkies Limited‟ with Ministry of Corporate affairs with copy of filing fee of Rs. 500/- paid to MCA . c) Form No. INC -28 filed electronically on 23.05.2014 by „UTV Software Communications Limited‟ with Ministry of Corporate affairs along with copy of filing fee of Rs. 600/- paid to MCA. d) Copy of documents acknowledging physical filings of Hon‟ble Bombay High Court order dated 11.04.2014 sanctioning scheme of amalgamation with ROC on 28.05.2014. e) Acknowledgement of payment of Rs. 60,000/- to Regional Director, Western Region , Mumbai towards costs of the Petition to the Regional Director( Rs. 10000/- cost was pertaining to the assessee as other companies also got merged with „UTV Software Communications Limited‟ vide common order passed by Hon‟ble Bombay High Court) vide letter filed on 05.05.2014. f) Acknowledgement of payment of Rs. 60,000/- to Official Liquidator Hon‟ble Bombay High Court , Mumbai towards costs of the Petition to the Official Liquidator( Rs. 10000/- cost was pertaining to the assessee as other companies also got merged with „UTV Software Communications Limited‟ vide common order passed by Hon‟ble Bombay High Court) vide letter filed on 05.05.2014.

3.11 The decision of Hon‟ble Delhi High Court in the case of Spice Entertainment Limited(supra) is relevant wherein Hon‟ble Delhi High Court based on the finding of fact that Spice Corp Limited got amalgamated with MCorp Private Limited under scheme of amalgamation approved by Hon‟ble Delhi High Court vide orders dated 11.02.2014 effective from 01.07.2003 and its name was struck from the rolls of Companies maintained by Registrar of Companies(para 7) , held that an assessment framed on a non existent entity is not sustainable in the eyes of law as it is a jurisdictional defect and is not a mere procedural defect and even Section 292B cannot come to rescue of the tax-payer. The SLP filed by Revenue against the said judgment of Hon‟ble Delhi High Court stood dismissed by Hon‟ble Supreme Court in CIT v. Spice Enfotainment Limited & Ors in batch of appeals in Civil Appeal Nos 285/2014 and others vide order dated 03.08.2011. Similar view has been taken by Hon‟ble Delhi High Court in the case of PCIT v. Nokia Solutions & Network India Private Limited(supra) in favour of the tax-payer by holding that no question of law arises. Similar view has been taken by Hon‟ble Karnataka High Court in the case of CIT v. Intel Technology India Private Limited(supra) in favour of the tax-payer by following the decision of Hon‟ble Delhi High Court in the case of Spice Infotainment Limited v. CIT(ITA no. 475 & 476 of 2011, dated 03.08.2011). The Mumbai tribunal in the case of Instant Holdings Limited(supra) quashed assessment framed by the AO u/s 143(3) vide orders dated 19.12.2008 as the assessment was framed against a non-existent entity after recording a finding of fact in para 7 that Instant Trading and Investment Company Limited was merged with Instant Holding Limited under a scheme of amalgamation approved by Hon‟ble Bombay High Court on 14.12.2007 w.e.f. 01.04.2007 and its name was struck off from the records of Registrar of Companies on 05.02.2008. The assessee has rightly relied upon the aforesaid judgments of Hon‟ble Courts/tribunal. 3.12 As we have extensively seen in the preceding para‟s of this order that voluminous evidences are filed by the assessee as to communication of its merger with its ultimate holding company „UTV Software Communication Limited‟ which was approved under a scheme of arrangement approved by Hon‟ble Bombay High Court u/s 391 to 394 of the Companies Act, 1956 , vide order dated 11.04.2014 w.e.f. 01.04.2013, during the course of assessment proceedings. The assessee on direction of the Bench has also filed copies of several compliances made by the assessee as were directed by Hon‟ble Bombay High Court vide para 18 to 20 of its order dated 11.04.2014 sanctioning scheme of amalgamation of the assessee with its ultimate holding company „UTV Software Communications Limited‟ w.e.f. 01.04.2013. The details of all these compliances as were done by the assessee to give effect to Hon‟ble Bombay High Court directions are detailed in para 3.10 of this order . We have carefully gone through these evidences which are now placed in file. All these compliances were completed before the end of May 2014. All these communications filed by the assessee along with evidences are speaking loudly that the assessee discharged its burden while failure to bring on record successor in interest during assessment proceedings was on the part of the Revenue. The AO in its assessment order vide para 4.2 and 4.3.1 has admitted to having knowledge of factum of merger of „UTV Tele Talkies Limited‟ with its ultimate holding company „UTV Software Communications Limited‟, which is reiterated by the AO in his remand report filed on the direction of learned CIT(A) during appellate proceedings. The assessment was framed by the AO on 01.02.2016 u/s 143(3) of the 1961 Act which was framed in the name of „UTV Tele Talkies Limited‟ which was an non existent company as it got merged with its ultimate holding company namely „UTV Software Communications Limited‟ . The AO has not conducted any prima facie enquiry as is contemplated u/s 170 of the 1961 Act read with Order 22 Rule 10 of CPC to bring on record successor in interest, despite several intimations given by the assessee to the AO as to the amalgamation of „UTV Tele Talkies Limited‟ with its ultimate holding company „UTV Software Communications Limited‟ during assessment proceedings. The non conducting of prima-facie enquiry by the AO to bring on record successor in interest as is contemplated u/s 170 read with Order 22 Rule 10 of CPC and framing of an assessment on a non existent entity is fatal keeping in view factual matrix of the case as discussed by us in preceding para‟s of this order . In the instant case based on factual matrix before us, we are afraid that an assessment order passed by the AO dated 01.02.2016 u/s 143(3) of the 1961 Act is suffering from a legal infirmity as an assessment is framed by the AO against a non existent entity despite being informed vide several communications and a complete failure by the AO to bring on record successor in interest, thus in our considered view assessment order dated 01.02.2016 passed by the AO u/s 143(3) is not sustainable in the eyes of the law liable to be quashed as even provisions of Section 292B of the 1961 Act cannot save it from being quashed as this is a jurisdictional legal infirmity which goes to the root of the matter . Thus, we quash the assessment order dated 01.02.2016 passed by the AO u/s 143(3) of the 1961 Act.