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Income Tax Appellate Tribunal, DELHI BENCH ‘D’ : NEW DELHI
Before: SHRI R.K. PANDA & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER : The Appellant, Assistant Commissioner of Income-tax, Central Circle 15, New Delhi (hereinafter referred to as ‘the Revenue’) by filing the present appeal sought to set aside the impugned order dated 28.09.2015 passed by the Commissioner of Income-tax (Appeals)-XXVI, New Delhi qua the assessment year 2008-09 on the grounds inter alia that :- “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 as invalid on the ground that no notice u/s 153A was issued to the amalgamating company without considering the fact that the amalgamation was not approved by the Hon'ble HC on the date when the notice u/s l53A was issued to the assessee company.
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 validly assumed prior to the amalgamation order by way of notice u/s l53A of Act.
3. That the CIT(A) has erred on facts and in law in allowing the appeal of the assessee without appreciating the factual position that the assessee company had filed its return in the name of Mayank Traders Pvt. Ltd. even after the amalgamation order of Hon'ble high Court.
4. That the CIT(A) has erred on facts and in law in allowing the appeal of the assessee without considering that the assessee had continued to correspond with the AO in the name of Mayank Trader Pvt. Ltd. even after its amalgamation with OPRL vide Hon'ble HC order dated 18.10.2010.
5. That the CIT(A) has substantially erred in allowing the appeal of the assessee without independently verifying the facts of the instant case being a fact finding authority as mandated by the jurisdictional HC [CIT vs Chetandas Lachman Das & CIT vs Jansampark Advertising Pvt. Ltd.]
6. That the CIT(A) has erred on facts and in law in allowing the appeal of the assessee without considering that the duly made additions/disallowances are to be brought to tax as per the provisions of the Act.
7. That without prejudice the CIT(A) has erred on facts and in law in allowing the appeal of the assessee without appreciating that the passing of assessment order in the name of assessee company was only a procedural defect and does not vitiate the assessment proceedings as a whole.
8.(a) The order of the CIT(A) is erroneous and not tenable in law and on facts.
(b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.”
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : assessee company belongs to Thapar Homes Group of cases. In response to the notice dated 29.03.2010 issued under section 153A of the Income-tax Act, 1961 (for short ‘the Act’), assessee company furnished return of income on 18.11.2010 declaring income of Rs.11,00,970/-. Thereafter, notices u/s 142 (1)/143(2) along with questionnaire were served upon the assessee company. During the assessment proceedings, AO noticed that the assessee company has shown entire purchases of Rs.5,00,000/- as bogus and brought to tax as unexplained expenditure u/s 69C of the Act. Assessee company also failed to prove the genuineness of its business activities to support its administrative and other expenses and consequently, 50% of the claim of the assessee company i.e. Rs.1,32,025/- is disallowed.
AO also noticed that the assessee has sold immovable properties worth Rs.1,72,50,000/-, the value of which has been estimated at Rs.3,00,00,000/- and consequently, the AO made addition of difference (i.e. Rs.3,00,00,000/- minus Rs.1,72,50,000/- = Rs.1,27,50,000/-) and thereby the assessed the total income at Rs.1,44,82,995/- u/s 153A/143 (3) of the Act.
Assessee carried the matter by way of filing appeal before the ld. CIT (A) who has quashed the assessment order on the ground that the same has been made in the name of non-existent company, by allowing the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by challenging the impugned order passed by ld. CIT (A).
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
Undisputedly, M/s. Mayank Traders Pvt. Ltd., the assessee company in this case is amalgamated with M/s. Optus Promoters P.
Ltd. vide order dated 08.10.2012 w.e.f. 01.04.2008 passed by the Hon’ble Delhi High Court. It is also not in dispute that the assessment in question has been framed in the name of M/s.
6. In the backdrop of the aforesaid facts and circumstances of this case, the sole question arises for determination is :-
“as to whether assessment framed against a non- existent company is sustainable in the eyes of law?”
Ld. DR for the Revenue contended that when the return has been filed by M/s. Optus Promoters P. Ltd., deliberate or inadvertent error mentioning the name of M/s. Mayank Traders P.
Ltd. does not change the said fact and this attempt has been made to take the benefit at the later stage. However, we are of the considered view that when undisputedly the assessment has been framed against non-existent person, the assessment framed on the amalgamated company is not amenable to the assessment proceedings. Coordinate Bench of the Tribunal in assessee’s own case in 5308/Del/2013 & 2356 & 2357/Del/2014 order dated 28.11.2014 dealt with identical issue and quashed the assessment order on the ground that the assessment order framed against a non-existent entity is not sustainable in the eyes of law by following the decision rendered by Hon’ble Delhi High Court in case cited as CIT vs. Vived Marketing Services Pvt. Ltd. in ITA 273 of 2009 order dated 17.09.2009. So, the answer to the question framed is in negative. Consequently, the assessment order passed in this case is hereby quashed without going into the merits raised in the present appeal on finding no illegality or perversity in the findings returned by ld. CIT (A).