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Income Tax Appellate Tribunal, DELHI BENCH ‘F’’ : NEW DELHI
Before: SHRI MAHAVIR SINGH & SHRI S. RIFAUR RAHMAN
Date of Hearing 07.07.2025 Date of Pronouncement 18.07.2025 ORDER PER BENCH : These 7 appeals have been filed by two different Assessees against the separate orders of the Ld. CIT(A)-2, Gurgaon. The first and foremost common issue raised in all these 7 appeals, is as regards to the assessment framed u/s. 153A of the Act is bad in law, for the reasons that assessments were framed on the non- existent entities. Since the appeals are inter-connected, therefore, we are dealing with the facts of (AY 2012-13). For this, both the assessees has raised the following common ground in their respective 7 appeals:- “That having regard to the fact and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the AO in assuming jurisdiction and issuing of notice u/s. 153A of the Act, more so when the notice was issued in the name of non-existing entity and that too without giving any opportunity of hearing.”
Brief facts of the case are that assessee before the AO filed the identical letters in two companies for all the 7 assessment years, wherein, it was pleaded that the assessee company has merged with M/s BTL Holding Company Ltd. The specimen of one of the letters reads as under:- Date 01.09.2014 The Asstt. Commissioner of Income Tax, Central Circle-II, Faridabad R/Sir, 2 | P a g e Subject: Request for adjournment in the case of M/s SRS Buildcon Private Limited (now merged with M/s BTL Holding Company Limited) for AY 2007-08 u/s. 143(3)/153A. The captioned case is fixed for hearing for today before your goodself. It is humbly submitted that the assessee has received the notice of hearing only few days back. The assessee is compiling the information asked for and require time for the same. In these circumstances, it is humbly requested that the case may please be adjourned for a few days. It is also humbly submitted that the company had since been would up and merged with another company. Copies of High Court order for merger at attached. Accordingly, you are requested to kindly do the needful as per law. Thanking you, Yours faithfully, For M/s SRS Buildcon Pvt. Limited, (merged with BTL Holding Company Ltd.), Sd/- (Authorised Representative)”
Ld. Counsel for the assessee stated that assessment in this assessment year was passed u/s. 153A and read with 143(3) of the Act vide order dated 27.3.2015 despite the aforesaid objection. Aggrieved, assessee preferred appeal before the Ld. CIT(A) and Ld. CIT(A) held as under:- “Ground No. 2 & 3:- are challenging the assumption of jurisdiction by Assessing Officer to complete the assessment u/s. 153A(1)(b) and non issue of notice u/s. 143(2). It is seen from the facts of the case that the search in SRS group to which the appellant belongs was held on 09.05.2012. Thereafter a survey u/s. 133A was carried out at the business premises of the appellant Annexure A-9 being hard disc and FDRs as per A-2,
A-5 and A-11 were seized from appellant’s premises. Thereafter, notice u/s. 153A(1)(a) was issued to appellant to file ROI and notices u/s. 14392) and 142(1) were issued before completion of the case u/s. 153A(1)(b). The AR has raised an issue that the appellant company was not in existence at the time issue of notice u/s. 153A on 06.08.2013 by the Assessing Officer, having been merged with ‘BTL Holding Company Ltd.’ and appellant has argued that the assessment completed on a non-entity, is void ab initio. A Delhi High Court order regarding merger of the appellant company with ‘BTL Holding Company Ltd.’, has been submitted in this regard which is dated 16.03.2012 Para 17 of this order states, “it is, however, clarified that this order will not be construed as an order granting exemption from payment of stamp duty, taxes or any other charges, if payable in accordance with law; or permission / compliance with any other requirement which may be specifically required under any law.” Therefore, it is clear that all pending proceedings and liabilities of the companies which have been merged, will have to be duly discharged by them. Therefore, as the appellant itself has never ever raised this issue when statutory notices were being sent on it, nor did it ever raise the issue of merger during assessment proceeding before Assessing Officer and filed all the replies as from BTL Holding Company Ltd., only, the ground of appeal raised on this issue cannot be accepted. This is the reason also why the Assessing Officer has not mentioned the issue of merger in his order. The Return of Income filed by the appellant on 10.09.2013 has been verified as being BTL Industries Ltd.
4 | P a g e Therefore, the ground taken by appellant challenging the completion of assessment u/s. 153A(1)(b) on a merged company and non issue of notice u/s. 143(2), is baseless and the assumption jurisdiction of Assessing Officer is correct and regular. The grounds are therefore dismissed.”
Ld. Counsel for the assessee first of all, drew our attention towards the order of the Hon’ble Delhi High Court dated 16.03.2012 passed in CO.PET.519/2011 in the matter of M/s BTL Impex (India ) limited and Ors. relating to approving the Scheme of Amalgamation of BTL Impex (India) Limited, SRS Buildicon Private Limited, SRS International Limited, BTL Industries Limited and many other companies, by holding as under:- “17. In view of the approval accorded by the Shareholders, Secured and Unsecured Creditors of the Petitioner Companies; affidavit/report filed by the Regional Director, Northern Region and the Official Liquidator, attached with this Court, to the proposed Scheme, there appears to be no impediment to the grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme under Sections 391 and 394 of the Act. The Petitioner Companies will comply with the statutory requirements in accordance with law. Certified copy of the order be filed with the Registrar of Companies within thirty days from the date of receipt of the same. In terms of the provisions of Section 391 and 394 of the Act, and in terms of the Scheme, the whole or part undertakings, properties, rights and powers of the Transferor Companies be transferred to and vest in the Transferee Companies be without any further act or deed. Similarly, in terms of the scheme, all liabilities and duties of the Transferor Companies be transferred to the Transferee Company without any further act or deed. Upon the Scheme coming into effect, the Transferor Companies shall stand dissolved without winding up. It is, however, clarified that his order will not be construed as an order
5 | P a g e granting exemption from payment of stamp duty, taxes or any other charges, if payable in accordance with law; or permission / compliance with any other requirement which may be specifically under any law.”
Further, the Ld. Counsel for the assessee drew our attention to the Scheme placed before the Hon’ble High Court of Delhi and wherein, meaning of Appointed Date has been explained as under:- 3. “Appointed Date” means 1st September, 2011 (or such other date as the Hon’ble High Court of Delhi at New Delhi) from which date all the movable, immovable and other properties, of whatsoever nature and description of the respective Transferor Companies shall be transferred or deserved to be transferred and vested with the Transferee Company, without any further act, or deed on its part, “Business and / or undertaking of Transferor Companies” means and includes…”
5.1 The aforesaid fact has been acknowledged by the Assessing Officer for assessment year 2013-14 (which is not before us) vide para no. 2, which reads as under:- “2. During the previous year relevant to the A.Y. 2013- 14, the assessee was drawing income from business and profession. In accordance with the provisions of section 153A of the Income Tax Act, 1961 (in short, “The Act”, henceforth), a notice dated 10.11.2014, u/s. 153A(1)(a) was issued and properly served upon the assessee, requiring to file its return of income in respect of assessment year 2013-14, an assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted. In this case, the search was conducted on 09.05.2012. In response to the said notice, the assessee filed allotted dated 19.06.2014 stating there in that the assessee company has since been merged with another company M/s BTL Industries Limited (later name 6 | P a g e changed to M/s SRS Holdings India Limited) by the order of Hon’ble High Court with effect from 1st September, 2011. Therefore, these is no return for the previous year 2012-13 relevant to the assessment year in question. Copy of Hon’ble High Court order is attached herewith for ready reference.”
In view of the above, Ld. AR has submitted that the notice u/s. 153A dated 6.8.2013 and impugned assessment order u/s. 153A(1)(b)/143(3) dated 27.3.2015 have been issued / passed in the name of a non-existing entity which is bad in law in view of the judgement of CIT vs. Sony Mobile Communication Ind Pvt. Ltd. (now merged with Sony India Pvt. Ltd.), ITA 115/2019 dated 2.2.2023 of the Hon’ble Delhi High Court. He also relied upon the decision of M/s Ahead Enterprises Ltd. vs. DCIT, for AY 2010-11, dated 09.09.2020 (Del.); M/s Ahead Enterprises Ltd. vs. DCIT for AY 2008-09 to 2012-13 dated 06.01.2021 (Del) and decision in the case of PCIT vs. Maruti Suzuki India Ltd. (2019) 416 ITR 0613 (SC). 6.1 Ld. CIT(DR) in view of the aforesaid settled position, could not controvert the above said proposition made by the Ld. AR.
We have heard both the parties and perused the records. We find that in terms of the above factual matrix, now the issue is clear that the company has merged w.e.f. 01.09.2011 and the assessment was framed vide order dated 27.03.2015 passed u/s. 153A(1)(b) read with section 143(3) of the Act. We note that assessee vide its letter dated 1.9.2014 has intimated the Assessing officer that his case may be adjourned for few days, as the assessee company has since been wound 7 | P a g e up and merged with another company by enclosing the copy of the High Court of Delhi. We further note from the findings of the Ld. CIT(A) that assessee has raised the issue of the assessee company non-existence at the time of issue of notice u/s. 153A on 6.8.2013 having been merged with BTL Holding Company Limited and assessee has argued that the assessment completed on a non-entity is void abinito. We further note that as per the Hon’ble High Court order, the assessee company has since been merged. We further note that the assessment order dated 30.3.2015 for AY 2013-14 in assessee’s own case shows that the AO passed the order for AY 2013-14 admitting the fact of merger with effect from 01.9.2011 in view of the Hon’ble Delhi High Court decision dated 16.03.2012 regarding merger of the assessee company w.e.f. 01.9.2011. In view of the aforesaid facts and circumstances the Revenue could not have assumed the jurisdiction to issue a notice in the name of a nonexistent entity. It emerged at the outset during the course of hearing that there arises the legal issue of validity of the impugned assessment by the AO on the ground that assessee company has since been merged with another company long back. Also the Revenue could hardly dispute the above clinching fact taken note by the lower authorities. Faced with this situation, we quote the case of PCIT vs. Maruti Suzuki (2019) 416 ITR 613 to conclude that the impugned assessment is not sustainable in law in very terms since framed in the name of a non-existent entity. Following the ratio laid down in the case of PCIT v. Maruti Suzuki India Ltd., reported [2019] 107 taxmann.com 375/265 Taxman 515/416 ITR 613 (SC), the Assessment Order deserves to be quashed and set aside. We hold and direct 8 | P a g e accordingly. Thus, both the assesses’ instant identical substantive ground in their 07 cases succeeds therefore. Accordingly, all other pleadings on merits herein stand rendered academic in all the 07 appeals.
In the result, all the 07 appeals of two different assesses are allowed in the aforesaid manner. Order pronounced in the Open Court on 18.07.2025.