DCIT, CHENNAI vs. M/S. HENKEL INDIA LTD., MUMBAI

Order of Commissioner of Income Tax (Appeals)-17, Chennai, in dated 30.03.2016 for the AY 2010-11. CO No.120/Mds/2016 is a Cross-Objection filed by the assessee in the Revenue’s Appeal No.2054/Mds/2016.

Mr.M.N.Maurya, CIT represented on behalf of the Respondent and Ms.Priyanka Jain, Adv., represented on behalf of the Appellant.

It was submitted by the Ld.DR that M/s.Henkel India Ltd., (in short “M/s.HIL”) was engaged in the business of manufacturing of synthetic detergents, toiletries, etc. It had filed return of income for the relevant AY disclosing ‘Nil’ income. The assessment came to be completed u/s.143(3) r.w.s.144C(3) on 28.05.2014 after making adjustments on account of the TPO adjustment, disallowance of the loss on sale of fixed assets and disallowance of the wrong claim of VRS compensation. As a consequence of the assessment and the assessee having not filed any appeal against the Assessment Order penalty u/s.271(1)(c) was levied to an amount of Rs.10.00 Cr. It was a submission that against the penalty levied, the assessee had preferred an appeal to the Ld.CIT(A) who had held that the penalty order was null and void on the ground that the penalty order was passed on a non-existent entity M/s.HIL. It was a submission that the assessee had not intimated the AO regarding the merger of the & CO No.120/Mds/2016 :- 3 -:

In reply, the Ld.AR submitted that the assessee, M/s.HIL had filed the return for the relevant AY on 30.09.2010. M/s.HIL had subsequently changed its name to M/s.Jyothy Consumer Products Ltd. It was a further submission that on the basis of the order of the Hon’ble Jurisdictional High Court at Mumbai dated 12.04.2013, M/s.Jyothy Consumer Products Ltd., formerly known as M/s.HIL, which was merged as M/s.Jyothy Laboratories Ltd. (in short “M/s.JLL”) and the effective date was 01.04.2012. It was a submission that the Assessment Order was completed on 28.05.2014. The penalty u/s.271(1)(c) was initiated vide notice dated 28.05.2014 and the penalty order was passed on 28.11.2014. The Ld.AR drew our attention to Page No.253 & 254 of Paper Book which were copies of the letters issued by M/s.Jyothy Laboratories Ltd. to the DCIT, Company Circle-8(2), Mumbai dated 15.05.2013 and to the ACIT, Large Tax Payer Unit, Chennai dated 19.11.2013 intimating the merger of M/s.Jyothy Consumer Products Ltd., Mumbai with M/s.Jyothy Laboratories Ltd., Mumbai and the appointed date was 01.04.2012. Further, the Ld.AR drew our attention to Page No.110 of the Paper Book which is a copy of the TPO’s Order dated 03.09.2013 wherein he has recorded and addressed a letter to the Principal Officer, M/s.Jyothy Consumer Products Ltd. (formerly known as M/s.HIL) and now merged with M/s.Jyothy Laboratories Ltd. The Ld.AR submitted that the fact of the re-name of M/s.HIL and its merger with M/s.Jyothy Laboratories Ltd. was very well known to the AO much before the completion of the Assessment Order.

We have considered the rival submissions. A perusal of Page No.110 of the Paper Book which is a copy of the letter of the TPO which clearly shows that the TPO was well aware of the merger of M/s.HIL with M/s.Jyothy Laboratories Ltd. A perusal of the letters addressed by M/s.Jyothy Laboratories Ltd. to the AO at Page No.254 also clearly shows that the AO was intimated much before the passing of the Assessment Order regarding the merger of M/s.HIL having changed it’s name to M/s.Jyothy Consumer Products Ltd. and the same having merged with M/s.Jyothy Laboratories Ltd. This being so, the issuance of show cause notice on M/s.HIL re-named as M/s.Jyothy Consumer Products Ltd., was in fact, notice on a non-existence person as on the date on the issuance of notice.

Even assuming that the provisions of Sec.292B could be called to the rescue, still a perusal of the PAN number recorded in the Assessment Order and also in the penalty order and the demand notices shows that the PAN number & CO No.120/Mds/2016 :- 5 -:

In the result, the appeal filed by the Revenue is stands dismissed and the Cross-Objection filed by the assessee in Appeal No.2054/Mds/2016 is stands dismissed as withdrawn.