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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI ABY T. VARKEY, JM & SHRI AMARJIT SINGH, AM
O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee company against the order of the Ld. Commissioner of Income Tax (Appeals)/(NFAC), Delhi dated 23.03.2023 for the assessment year 2004-05.
At the outset, the Ld. AR of the assessee Shri Nikhil Tiwari appearing for the assessee has drawn our attention to additional ground nos. 8 & 9 wherein assessee challenges the validity of the assessment order passed in the name of the non-existent entity [M/s.Legrand (India) Private Limited (hereinafter “M/s. Legrand”/non-existent/ merged entity] and not in the name of the successor entity i.e. M/s. Novateur Electrical and Digital Systems Pvt. Ltd. [hereinafter “M/s.
2 A.Y. 2004-05 Novateur Electrical and Digital System Pvt. Ltd. Novateur”/successor entity/merged entity]. The additional ground raised by the assessee are reproduced as under: -
8. The learned Assessing Officer erred in passing the order in the name of Legrand (India) Private Limited (i.e. the amalgamation entity) which is not in existence as on the date of passing the order and hence, the order should be quashed by treating the same as null and void. 9. the learned Commissioner of Income Tax (Appeals) erred in passing the order in the name of Legrand (India) Private Limited (ie. The amalgamation entity) which is not in existing as on the date of passing the order and hence, the order should be quashed by treating the same as null and void.”
The Ld. DR for the revenue opposes the admission of the additional ground, since the same were not raised before the Ld. CIT(A)/NFAC. Per contra, the Ld. AR for the assessee submitted that this is purely a legal issue which can be raised before Tribunal for the first time, since no new facts need to be ascertained and facts necessary for adjudication of the legal issue are available on record; and for supporting admission of legal issue for the first time before the Tribunal, he relied upon the decision of the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT (229 ITR 383).
We have heard both the parties and perused the records. We note that the additional ground nos. 8 & 9 raised by the assessee is pertaining to jurisdiction of AO to have framed assessment order in the name of the non-existing/merged entity [despite AO being aware about the amalgamation of the erstwhile entity with 3 A.Y. 2004-05 Novateur Electrical and Digital System Pvt. Ltd. successor/merged/amalgamated entity]. Therefore, the same are admitted, and since no new facts need to be ascertained and the relevant facts necessary for adjudicating of legal issue are available on record, we admit the additional grounds and proceed to adjudicate the same.
Brief facts regarding the legal issue regarding validity of the assessment order passed in the name of non-existent entity [M/s. Legrand (India) Pvt. Ltd.] instead of M/s. Novateur Electrical and Digital System Pvt. Ltd, it is noted that this is the second round of litigation before this Tribunal. In the first round, the AO had passed assessment order u/s 143(3) of the Income Tax Act, 1961 (hereinafter “the Act”) on 29.12.2006 by assessing the income of the assessee at Rs.22,41,21,120/-. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who passed the First Appellate Order on 28.12.2007 which was challenged before this Tribunal; and the Tribunal was pleased to pass an order dated 05.10.2012 wherein the impugned order of the Ld. CIT(A) was set aside back to the file of AO for fresh consideration (issues on which AO has made additions/disallowance).
Pursuant to the restoration of assessment back to the file of the AO (supra), the AO in the second round issued statutory notice on 17.09.2013 u/s 142(1) of the Act and thereafter framed assessment u/s 143(3) r.w.s. 254 of the Act dated 16.12.2013 in the name of erstwhile merged entity/non-existent entity M/s. Legrand (India), despite the assessee having brought to the notice of the AO vide letter dated 4 A.Y. 2004-05 Novateur Electrical and Digital System Pvt. Ltd. 06.08.2012 placed at page no. 27 of PB, wherein the assessee filed the following letter dated 06.08.2012 which is reproduced as under: - Date: 06th Aug, 2012 The Assistant Commissioner of Income-tax Circle-6(3) Aayakar Bhavan Mumbai-400020. Dear Sir, Re: Amalgamation of Legrand (India) Private Limited (LIPL) with Novateur Electrical & Digital System Private Limited (NEDSPL) formerly known as Indo Asian Electric Private Limited). LIPL was engaged inter-alia engaged in the business of manufacturing and trading of LV Switchgear, Wiring Devices, Home Automation, Lighting Management, Structured Cabling and Cable Management Products. LIPL had its registered office situated at 61 / 62 Kalpataru Square, Andheri Kurla Road, Near Vits Hotel, Andheri (East), Mumbai - 400059. LIPL is assessed to income-tax at Circle -6 3 Aayakar Bhavan Mumbai -400 020. Its PAN is AAACM5009Q NEDSPL is engaged inter-alia engaged in the business of manufacturing of electrical goods, light engineering goods, fusegears, switchgears, controlgear, H.R.C. fuses, miniature circuit breakers. It has its registered office situated at A/303, Prathamesh, Raghuvanshi Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400013. NEDSPL is assessed to income-tax at Circle - 6(2) - 4 Aayakar Bhavan Mumbai -400 020. Its PAN is AACCE4671N. Merger of LIPL into NEDSPL LIPL has been merged with NEDSPL, as per the provisions of sections 391 to 394 of the Companies Act, 1956. The Scheme of Arrangement (“Scheme”) has been approved by the Bombay High Court. The merger is effective from the Appointed Date i.e. April 1, 2011 (a copy of the High Court Order approving the Scheme is enclosed herewith as Annexure A). The said order has been filed with the jurisdictional