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Facts
The Revenue's appeal is against an order allowing the assessee's appeal. The core issue is that the assessment order for AY 2017-18 was passed in the name of an entity (Aditya Birla Telecom Ltd.) that had merged with Vodafone Idea Ltd. before the order was passed.
Held
The Tribunal held that the assessment order was passed on a non-existent entity, making it void and bad in law. This aligns with previous decisions of the ITAT and the Ld. CIT(A) who had quashed the assessment order on similar grounds.
Key Issues
Whether the assessment order passed in the name of a merged entity, which no longer existed, is legally valid.
Sections Cited
143(3), 292B, 263
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SUNIL KUMAR SINGH
This appeal by the Revenue is directed against order dated 15.12.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds:
1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was legally correct in allowing the appeal of the assessee by holding that the order u/s 143(3) dated 05/12/2019 was assessee by holding that the order u/s 143(3) dated 05/12/2019 was assessee by holding that the order u/s 143(3) dated 05/12/2019 was passed on a non passed on a non-existing company is bad in law relying on the decision ing on the decision of the Hon'ble ITAT in assessee's own case in of the Hon'ble ITAT in assessee's own case in of the Hon'ble ITAT in assessee's own case in ITA No.662/MUM/2022 for A.Y.2017-18 ignoring the fact that: (a) the notice u/s. 143(2) was 18 ignoring the fact that: (a) the notice u/s. 143(2) was 18 ignoring the fact that: (a) the notice u/s. 143(2) was issued to the company M/s Aditya Birla Telecom Ltd (predecessor of issued to the company M/s Aditya Birla Telecom Ltd (predecessor of issued to the company M/s Aditya Birla Telecom Ltd (predecessor of M/s. Vodafone Idea Ltd.) for the M/s. Vodafone Idea Ltd.) for the period relevant to AY 2017 period relevant to AY 2017-18, when the company was very much in existence; and (b) the defect in recording the company was very much in existence; and (b) the defect in recording the company was very much in existence; and (b) the defect in recording the name of a company in an order, which was subsequently merged the name of a company in an order, which was subsequently merged the name of a company in an order, which was subsequently merged (w.e.f. 30.11.2018) was a procedural defect or mistake curable under (w.e.f. 30.11.2018) was a procedural defect or mistake curable under (w.e.f. 30.11.2018) was a procedural defect or mistake curable under Section 292B, since no prejudice was caused to the assessee? since no prejudice was caused to the assessee? since no prejudice was caused to the assessee? 2. We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. In the case, the Ld. CIT(A) has quashed relevant material on record. In the case, the Ld. CIT(A) has quashed relevant material on record. In the case, the Ld. CIT(A) has quashed the impugned assessment order on the ground that same was the impugned assessment order on the ground that same was the impugned assessment order on the ground that same was passed on non-existent enti istent entity. In the case notice u/s 143(2 ty. In the case notice u/s 143(2) of the Act was issued in the name of entity namely M/s Aditya Birla Ltd. Act was issued in the name of entity namely M/s Aditya Birla Ltd. Act was issued in the name of entity namely M/s Aditya Birla Ltd. The said company got merged with Vo said company got merged with Vodafone Idea Ltd. effective from dafone Idea Ltd. effective from 30.11.2018 and the appointed date of the merger was 01.04.2018. 30.11.2018 and the appointed date of the merger was 01.04.2018. 30.11.2018 and the appointed date of the merger was 01.04.2018. The effect of the merger of M/s Aditya Birla Ltd. was brought to the ect of the merger of M/s Aditya Birla Ltd. was brought to the ect of the merger of M/s Aditya Birla Ltd. was brought to the notice of the Assessing Officer during the assessment proceedings. notice of the Assessing Officer during the assessment proceedings. notice of the Assessing Officer during the assessment proceedings. Despite the effect of the merger within the knowledge of the Despite the effect of the merger within the knowledge of the Despite the effect of the merger within the knowledge of the Assessing Officer, the Assessing Officer passed the impugned order Assessing Officer, the Assessing Officer passed the impugned order Assessing Officer, the Assessing Officer passed the impugned order in the name of the entity M/s Aditya Biral Ltd. in the name of the entity M/s Aditya Biral Ltd. i.e. name of entity i.e. name of entity prior to merger with Vodafone Idea Ltd. Accordingly, the Ld. CIT(A) with Vodafone Idea Ltd. Accordingly, the Ld. CIT(A) with Vodafone Idea Ltd. Accordingly, the Ld. CIT(A) held the assessment order passed on the non held the assessment order passed on the non-existent entity M/s existent entity M/s Aditya Birla Ltd. as non Aditya Birla Ltd. as non-est. The relevant finding of t est. The relevant finding of the Ld. CIT(A) is reproduced as under: reproduced as under:
“7. Ground No.1: Ground No.1: In this ground the appellant has challenged the In this ground the appellant has challenged the validity of the assessment'order on account of the fact that the order is validity of the assessment'order on account of the fact that the order is validity of the assessment'order on account of the fact that the order is in passed in the name of Aditya Birla Telecom Limited which was a non in passed in the name of Aditya Birla Telecom Limited which was a non in passed in the name of Aditya Birla Telecom Limited which was a non existent entity on the date of the passing of the assessment order. entity on the date of the passing of the assessment order. entity on the date of the passing of the assessment order.
7.1 I have perused the submissions of the appellant on this issue. The I have perused the submissions of the appellant on this issue. The I have perused the submissions of the appellant on this issue. The appellant has relied on the decision of the Hon'ble ITAT in its own case appellant has relied on the decision of the Hon'ble ITAT in its own case appellant has relied on the decision of the Hon'ble ITAT in its own case in (A.Y: in (A.Y: 2017-18) vide order dated 1.12.2022 dated 1.12.2022 wherein the Tribunal has quashed the order u/s 263 of the Act passed wherein the Tribunal has quashed the order u/s 263 of the Act passed wherein the Tribunal has quashed the order u/s 263 of the Act passed by the PrCITwith regard to the impugned assessment order u/s 143(3) by the PrCITwith regard to the impugned assessment order u/s 143(3) by the PrCITwith regard to the impugned assessment order u/s 143(3) dated 5.12.2019. One of the grounds of challenging the order u/s 263 5.12.2019. One of the grounds of challenging the order u/s 263 5.12.2019. One of the grounds of challenging the order u/s 263 dated 26.03.2022 was that the asse dated 26.03.2022 was that the assessment order itself u/s 143(3) was ssment order itself u/s 143(3) was bad in law since it was in the name of Aditya Birla Telecom Limited an bad in law since it was in the name of Aditya Birla Telecom Limited an bad in law since it was in the name of Aditya Birla Telecom Limited an entity no longer in existence on the date of the passing of the order i.e entity no longer in existence on the date of the passing of the order i.e entity no longer in existence on the date of the passing of the order i.e 5.12.2019. The relevant extracts of the judgment of the Tribunal dated 5.12.2019. The relevant extracts of the judgment of the Tribunal dated 5.12.2019. The relevant extracts of the judgment of the Tribunal dated 1.12.2022 are reproduced below: 2022 are reproduced below: "23. Considered the rival submissions and material placed on record, "23. Considered the rival submissions and material placed on record, "23. Considered the rival submissions and material placed on record, we observe from the submissions of both the parties that the Assessing we observe from the submissions of both the parties that the Assessing we observe from the submissions of both the parties that the Assessing Officer has passed the final Assessment Order in the name of the Officer has passed the final Assessment Order in the name of the Officer has passed the final Assessment Order in the name of the M/s.Aditya Birla Telecom M/s.Aditya Birla Telecom Limited (erstwhile name) even though the Limited (erstwhile name) even though the Assessing Officer was well aware of the fact the erstwhile company Assessing Officer was well aware of the fact the erstwhile company Assessing Officer was well aware of the fact the erstwhile company was merged with the assessee company w.e.f 30th November, 2018 was merged with the assessee company w.e.f 30th November, 2018 was merged with the assessee company w.e.f 30th November, 2018 with the appointed date of merger was April 1st, 2018. It is brought to with the appointed date of merger was April 1st, 2018. It is brought to with the appointed date of merger was April 1st, 2018. It is brought to our knowledge that Assessing Officer has issued several notices and e that Assessing Officer has issued several notices and e that Assessing Officer has issued several notices and enquired about the merger and discussed in detail about the merger in enquired about the merger and discussed in detail about the merger in enquired about the merger and discussed in detail about the merger in the various notices issued by him as well as in the assessment order. the various notices issued by him as well as in the assessment order. the various notices issued by him as well as in the assessment order. However, at the same time it is also brought to our notice t However, at the same time it is also brought to our notice that annexure hat annexure to the above said notices in which Assessing Officer himself has used to the above said notices in which Assessing Officer himself has used to the above said notices in which Assessing Officer himself has used the existing name of the assessee and collected the various information the existing name of the assessee and collected the various information the existing name of the assessee and collected the various information relating to the merger. It clearly shows that assessee has brought to the relating to the merger. It clearly shows that assessee has brought to the relating to the merger. It clearly shows that assessee has brought to the notice of the Assessing Off notice of the Assessing Officer the real fact that the assessment which icer the real fact that the assessment which the Assessing Officer finalized is of the existing company i.e. Vodafone the Assessing Officer finalized is of the existing company i.e. Vodafone the Assessing Officer finalized is of the existing company i.e. Vodafone Idea Limited. In our considered view, the fact that the Aditya Birla, Idea Limited. In our considered view, the fact that the Aditya Birla, Idea Limited. In our considered view, the fact that the Aditya Birla, erstwhile name, is non erstwhile name, is non-exist at the time of passing of the order by exist at the time of passing of the order by the Assessing Officer and Assessing Officer also aware of the fact of Assessing Officer and Assessing Officer also aware of the fact of Assessing Officer and Assessing Officer also aware of the fact of merger, therefore, the fact in the present appeal are exactly similar to merger, therefore, the fact in the present appeal are exactly similar to merger, therefore, the fact in the present appeal are exactly similar to 28 ITA NO. 662/MUM/2022 (A.Y: 2017 28 ITA NO. 662/MUM/2022 (A.Y: 2017-18) Vodafone Idea Limited the Idea Limited the facts in the case of Pr.CIT v. Maruti Suzuki Ind facts in the case of Pr.CIT v. Maruti Suzuki India Limited (supra). ia Limited (supra). Therefore, the ratio of the Pr.CIT v. Maruti Suzuki India Limited (supra) Therefore, the ratio of the Pr.CIT v. Maruti Suzuki India Limited (supra) Therefore, the ratio of the Pr.CIT v. Maruti Suzuki India Limited (supra) is equally applicable in the present case is equally applicable in the present case 24. At the time of hearing, Ld. DR brought to our notice the decision in 24. At the time of hearing, Ld. DR brought to our notice the decision in 24. At the time of hearing, Ld. DR brought to our notice the decision in the case of M/s. the case of M/s. Mando Automotive India Pvt. Ltd. (supra) and PCIT vs. d. (supra) and PCIT vs. Mahagun Realtors (P) Ltd. (supra) and wherein the facts are Mahagun Realtors (P) Ltd. (supra) and wherein the facts are Mahagun Realtors (P) Ltd. (supra) and wherein the facts are distinguishable to the facts in the present case and facts in the Maruti distinguishable to the facts in the present case and facts in the Maruti distinguishable to the facts in the present case and facts in the Maruti Suzuki case. In the case of M/s. Mando Automotive India Pvt. Ltd. Suzuki case. In the case of M/s. Mando Automotive India Pvt. Ltd. Suzuki case. In the case of M/s. Mando Automotive India Pvt. Ltd. (supra) and PCIT vs. Mahagun Real (supra) and PCIT vs. Mahagun Realtors (P) Ltd. (supra) the erstwhile tors (P) Ltd. (supra) the erstwhile assessee misrepresented and actually filed the wrong informations in assessee misrepresented and actually filed the wrong informations in assessee misrepresented and actually filed the wrong informations in order to misguide the revenue. Accordingly, the Hon'ble Supreme/High order to misguide the revenue. Accordingly, the Hon'ble Supreme/High order to misguide the revenue. Accordingly, the Hon'ble Supreme/High Court has decided the issue against the assessee. However, the facts in Court has decided the issue against the assessee. However, the facts in Court has decided the issue against the assessee. However, the facts in the present case are not similar to the facts in the case of M/s.Mando t case are not similar to the facts in the case of M/s.Mando t case are not similar to the facts in the case of M/s.Mando Automotive India Pvt. Ltd. (supra) and PCIT vs. Mahagun Realtors (P) Automotive India Pvt. Ltd. (supra) and PCIT vs. Mahagun Realtors (P) Automotive India Pvt. Ltd. (supra) and PCIT vs. Mahagun Realtors (P) Ltd. (supra). Therefore, the ratio in the above said cases cannot be Ltd. (supra). Therefore, the ratio in the above said cases cannot be Ltd. (supra). Therefore, the ratio in the above said cases cannot be applied in the present case. It clearly indicates that As applied in the present case. It clearly indicates that Assessing Officer sessing Officer has passed,the Assessment Order in the name of the non has passed,the Assessment Order in the name of the non has passed,the Assessment Order in the name of the non-existing entity. Therefore, the Assessment Order passed by the Assessing entity. Therefore, the Assessment Order passed by the Assessing entity. Therefore, the Assessment Order passed by the Assessing Officer itself is non Officer itself is non-est, void and bad in law.
Considering the fact that the original Assessment Order pas 25. Considering the fact that the original Assessment Order pas 25. Considering the fact that the original Assessment Order passed by the Assessing Officer is bad in law, whether the collateral proceeding the Assessing Officer is bad in law, whether the collateral proceeding the Assessing Officer is bad in law, whether the collateral proceeding initiation u/s. 263 of the Act also be bad in law. It is brought to our initiation u/s. 263 of the Act also be bad in law. It is brought to our initiation u/s. 263 of the Act also be bad in law. It is brought to our notice that in the case of Westlife Development Ltd., v. Pr.CIT (supra) notice that in the case of Westlife Development Ltd., v. Pr.CIT (supra) notice that in the case of Westlife Development Ltd., v. Pr.CIT (supra) wherein the Coordinate Bench has a wherein the Coordinate Bench has addressed this issue and decided as ddressed this issue and decided as under: - …………………………….. ……………………………..
Further, we observe that the Hon'ble Jurisdictional High Court also 26. Further, we observe that the Hon'ble Jurisdictional High Court also 26. Further, we observe that the Hon'ble Jurisdictional High Court also dismissed the appeal of the revenue against the decision of the dismissed the appeal of the revenue against the decision of the dismissed the appeal of the revenue against the decision of the Coordinate Bench in the Westlife Development Ltd., v. Pr.CIT ( Coordinate Bench in the Westlife Development Ltd., v. Pr.CIT ( Coordinate Bench in the Westlife Development Ltd., v. Pr.CIT (supra).
Therefore, respectfully following the above said decision, we hold 27. Therefore, respectfully following the above said decision, we hold 27. Therefore, respectfully following the above said decision, we hold that the order passed u/s. 263 of the Act is equally bad in law that the order passed u/s. 263 of the Act is equally bad in law that the order passed u/s. 263 of the Act is equally bad in law considering the fact that we already held that the original assessment considering the fact that we already held that the original assessment considering the fact that we already held that the original assessment order passed u/s. 143(3) is bad in law and order passed u/s. 143(3) is bad in law and an order passed which is an order passed which is not proper and non not proper and non-est, the same order cannot be the subject matter of est, the same order cannot be the subject matter of the revision u/s. 263 of the Act. Respectfully following the decision of the revision u/s. 263 of the Act. Respectfully following the decision of the revision u/s. 263 of the Act. Respectfully following the decision of the Coordinate Bench in the case of Westlife Development Ltd., v. Pr.CIT the Coordinate Bench in the case of Westlife Development Ltd., v. Pr.CIT the Coordinate Bench in the case of Westlife Development Ltd., v. Pr.CIT (supra) we are inclined to quash the revision order passed u/s. 263 of e inclined to quash the revision order passed u/s. 263 of e inclined to quash the revision order passed u/s. 263 of the Act and accordingly, ground raised by the assessee in Ground Nos. the Act and accordingly, ground raised by the assessee in Ground Nos. the Act and accordingly, ground raised by the assessee in Ground Nos. 1.4 and 1.5 are allowed and at the same time, other ground raised by 1.4 and 1.5 are allowed and at the same time, other ground raised by 1.4 and 1.5 are allowed and at the same time, other ground raised by the assessee are kept open at this stage. Accordingly, appe the assessee are kept open at this stage. Accordingly, appe the assessee are kept open at this stage. Accordingly, appeal filed by the assessee is partly allowed." the assessee is partly allowed." 7.2 From the above it is clear that the ITAT has held that the From the above it is clear that the ITAT has held that the From the above it is clear that the ITAT has held that the assessment order dated 5.12.2019 which is the subject matter of this assessment order dated 5.12.2019 which is the subject matter of this assessment order dated 5.12.2019 which is the subject matter of this appeal is bad in law and non est. Accodingly, since the issue is already appeal is bad in law and non est. Accodingly, since the issue is already appeal is bad in law and non est. Accodingly, since the issue is already decided by the Honble ITAT, the Ground of Appeal is trèated as d by the Honble ITAT, the Ground of Appeal is trèated as d by the Honble ITAT, the Ground of Appeal is trèated as Allowed.” 2.1 Before us, the Ld. counsel for the assessee brought to our Before us, the Ld. counsel for the assessee brought to our Before us, the Ld. counsel for the assessee brought to our notice from the same issue has been adjudicated by the Co-ordinate notice from the same issue has been adjudicated by the Co notice from the same issue has been adjudicated by the Co Bench of the Tribunal while dealing with the proceedings u/s 263 of Bench of the Tribunal while dealing with the proceedings u/ Bench of the Tribunal while dealing with the proceedings u/ the Act dated 26.03.2022 against the impugned assessment order. the Act dated 26.03.2022 against the impugned assessment order. the Act dated 26.03.2022 against the impugned assessment order. The Co-ordinate Bench held that assessment order passed on non ordinate Bench held that assessment order passed on non ordinate Bench held that assessment order passed on non- existent entity was bad in law and therefore not sustainable. The ld existent entity was bad in law and therefore not sustainable. existent entity was bad in law and therefore not sustainable. CIT(A) has reproduced the relevant part of the decision of the CIT(A) has reproduced the relevant part of the deci CIT(A) has reproduced the relevant part of the deci Tribunal (supra),so we are not repeating again. Tribunal (supra),so we are not repeating again.
2.2 On perusal of the On perusal of the finding of the Co-ordinate Bench ordinate Bench of Tribunal, it is evident that issue has already been decided against it is evident that issue has already been decided against it is evident that issue has already been decided against the Revenue and therefore, the Revenue and therefore, in following the finding of finding of the Co- ordinate Bench, we do not find any infirmity in the order of the Ld. e do not find any infirmity in the order of the Ld. e do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly uphold the same. CIT(A) on the issue in dispute and accordingly uphold the same. CIT(A) on the issue in dispute and accordingly uphold the same. The grounds raised by the Revenue are dismissed. The grounds raised by the Revenue are dismissed.
In the result, the appeal filed by the Revenue is dismissed. In the result, the appeal filed by the Revenue is dismissed. In the result, the appeal filed by the Revenue is dismissed.