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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri J. Sudhakar Reddy & Shri S.S. Viswanethra Ravi
ORDER Shri S.S.Viswanethra Ravi, JM:
Both the above appeals by the Revenue are directed against the separate orders of the CIT-A, VI, New Delhi and CIT-A, 3, Kolkata dated 31-01-2014 and 16-08-2016 passed in the cases of M/s. Ansal Hotels Ltd (merged with M/s. ITC Limited) and M/s. ITC Ltd( formerly known as M/s. Ansal Hotels Ltd) for the A.Y 2002-03.
First, we shall take up the appeal in for the A.Y 2002-03 filed by the revenue.
In this appeal the only issue is to be decided is as to whether the appeal is maintainable being the notice issued on non-existent entity in the facts and circumstances of the case.
It is noticed that in this case the assessment was completed by accepting the returned loss of Rs.49,03,49,779/- vide order passed 1 & 2112/K/16 u/s. 143(3) of the Act on 29-03-2005. Thereafter, the AO issued notice u/s. 148 of the Act dt. 31-03-09 and in such reopening proceedings the AO made certain additions vide his order dt. 31-12- 2009 passed u/s. 147/143(3) of the Act. The ld.AR submits that the assessee was merged with M/s. ITC Ltd w.e.f 1-4-04 by orders of Hon’ble High Courts of Delhi and Calcutta. The AO initiated reopening proceeding by issuing notice u/s. 148 of the Act on non-existing assessee and as such the assessment completed u/s. 147 of the Act making addition(s) is invalid in the eyes of law, which is not maintainable in the facts and circumstances of the case.
The CIT-A after considering such submissions of assessee held that issuance of notice u/s. 148 on non-existent entity of assessee is invalid, which is reproduced hereunder:-
“The case of the appellant, it is respectfully submitted is not only squarely covered by the aforesaid decision but stands on a much better footing. In the case of the appellant, the jurisdictional notice under section 148 of the Act was issued in the name of a non-existent entity, despite the factum of amalgamation of the said assessee being already available on record of the Income Tax Department. The notice issued under section 148 of the Act was, therefore, clearly invalid in the eyes of law. No valid notice under section 148 of the Act was issued/served by the assessing officer leave aside the issuance/service of such notice within the limitation period of six years from the end of the relevant assessment year. It is settled law that issuance and service of a valid notice issued under section 148 is a precondition for assuming jurisdiction under section 147 of the Act. In view of the same, it is submitted that the impugned reassessment order passed pursuant to issuance of an invalid notice under section 148 of the Act is without jurisdiction, illegal and bad in law and, therefore, calls for being quashed on this preliminary ground itself. “
In view of above, we do not find any infirmity in the impugned order of the CIT-A. We uphold the same. Therefore, the grounds raised by the revenue are dismissed.
The above appeal of revenue in for the A.Y 2002-03 is dismissed.
Now, we shall take up the appeal in for the A.Y 2002-03(by the assessee). A.Y 2002-03 filed by the revenue
It is noticed that in this case also the assessment was completed by accepting the returned loss of Rs.49,03,49,779/- vide 2 & 2112/K/16 order passed u/s. 143(3) of the Act on 29-03-2005. Thereafter, the AO issued notice u/s. 148 of the Act dt. 31-03-09 for initiation of re- assessment proceedings and made additions vide his order passed u/s. 147/143(3) of the Act on 31-12-2009.
The assessee challenged the same before the CIT-A. But, the CIT-A did not consider the grounds raised by the assessee challenging the issuance of notice u/s. 148 of the Act on non-existent entity of assessee.
The assessee challenged the order of the CIT-A in not adjudicating the ground before the ITAT, wherein the ITAT has restored the issue to the file of the CIT-A for deciding the same. The CIT-A discussed the jurisdiction of the AO and issuance of notice u/s. 148 of the Act on non-existent entity of assessee whether the same is valid or not.
The CIT-A by placing his reliance on the decisions of the Hon’ble High Court of Calcutta in the cases of I.K Agencies (P) Ltd, Gestetner (I) Ltd and Spice Entertainment Ltd of Hon’ble High Court of Delhi held that service of notice on the correct assessee u/s. 148 is a statutory mandatory requirement, which was not fulfilled in this case as the impugned notice was served on Ansal Hotels Ltd, which had ceased to exist by the Amalgamation order of the High Court. Accordingly, the reassessment made u/s. 147 of the Act in the present case was annulled. Relevant finding of the CIT-A is reproduced herein below:-
“4. CONCLUSION On going through the decisions in the case of I.K. Agencies (supra), Gestetner (India) Ltd (supra), and in the case of Spice Entertainment Ltd in ITA 475 of 2011 by Delhi High Court order dated 3rd August, 2011 it is seen that the service of notice on Ansal Hotels Ltd., a non existing entity, is a jurisdictional defect as there cannot be any valid assessment made on a dead person. The said defect is not a curative defect within the provisions of section 292BB as the assessee had raised specific objection in this regard during reassessment proceedings. Service of notice, on the correct assessee, u/s. 148 is a statutory mandatory requirement which has not been fulfilled in this case as the impugned notice was served on Ansal Hotels Ltd, which had ceased to exist by the Amalgamation order of the High Court. Accordingly the reassessment made u/s. 147 in this case is hereby annulled on the ground of issuance of notice u/s. 148 on a non- existing entity. In the result the appeal of the assessee is treated as allowed.” 3 & 2112/K/16
The ld.DR relied on the order of the AO.
On the other hand, the ld.AR of the assessee relied on the order of this Tribunal dt. 17-02-2016 in the case of Gestetner (India) Ltd supra in & 783/Kol/08 for the A.Ys 2003-04 & 2004-05 and referred to para 4 of the said order in support of the contention.
We have heard rival submissions and perused the record. We find that this Tribunal in the case of Gestetner(I) Ltd supra vide para 4 of the said order dt. 15-03-2006 held that assessment framed u/s. 143(3) on a non-existent company inspite of having information of amalgamation is not maintainable and by placing reliance on the decision of Hon’ble High Court Delhi in the case of Spice Entertainment Ltd supra. In view of the same, we are of the view that the CIT-A was justified in annulling the same. We do not find any infirmity in the impugned order of the CIT-A. We uphold the same on this issue and it is justified in accordance with law and in the eyes of law. Therefore, the grounds raised by the revenue are dismissed.
The above appeal of revenue in for the A.Y 2002-03 is dismissed.
In the result, both the above appeals of the revenue in & 2112/Kol/2016 filed for the A.Y 2002-03 are dismissed.
Order pronounced in the open court on 13-09-2017