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Income Tax Appellate Tribunal, “A” BENCH : KOLKATA
Before: Hon’ble Sri A.T.Varkey, JM & Shri M.Balaganesh, AM ]
This appeal of the revenue arises out of the order of the Learned Commissioner of Income Tax (Appeals) –Central-III , Kolkata [ in short the ld CITA] in Appeal No. 72/CC-I/CIT(A)C-III/12-13/Kol dated 17.04.2014 against the order passed by the D.C.I.T., Circle-10, Kolkata [ in short the ld AO] under section 147/143(3) of the Act dated 26.12.2008 for the Asst Year 2003-04.
The only issue to be decided in this appeal is as to whether the ld CITA was justified in annulling the assessment framed in the hands of the amalgamating company, ignoring the fact of merger, in the facts and circumstances of the case.
The brief facts of this issue is that M/s Visa Energy Resources Ltd got amalgamated with Visa Industries Ltd with effect from 1.4.2004 vide approval of the Hon’ble High Court of Orissa in order dated 15.10.2004. This had happened many years prior to the 2 /Kol/2014 Now known as Visa Steel Ltd. A.Yr.2003-04 initiation of the reassessment proceedings for the Asst Year 2003-04. Pursuant to the amalgamation, the assessee company, being the amalgamating company, ceased to exist.
The assessee for the Asst Year 2003-04 filed its return of income on 1.12.2003 declaring total income of Rs 91,12,113/- and assessment was framed u/s 143(3) of the Act on 21.3.2006 determining the total income at Rs 91,21,284/-. Later the Learned Commissioner of Income Tax (in short ld CIT) initiated proceedings u/s 263 of the Act vide order dated 5.11.2007 by directing the ld AO to make fresh assessment after examining the issues raised by the ld CIT in the revision proceedings. Pursuant to the said direction of the ld CIT, the ld AO passed the order u/s 263 / 143(3) of the Act dated 26.12.2008 being the order under appeal wherein a sum of Rs 1,06,82,191/- was added on account of undervaluation of closing stock. This assessment was framed in the name of ‘Visa Energy Resources Ltd’ (i.e the amalgamating company) on 26.12.2008, on which date, this company ceased to exist pursuant to amalgamation. The ld CITA annulled the entire assessment since the same was framed on the company which ceased to exist. Aggrieved, the revenue is in appeal before us on the following grounds:- “
1. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified that assessment order was ab-initio void as there was no company in the name of M/s. Visa Energy Resources Ltd. at the time of assessment.
2. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in appreciating the fact that merger is analogous to succession and therefore, prior to the date of merger, assessment of the amalgamating company be done in hands of the amalgamating company as held by the Allahabad High Court in the case of CIT -Vs.- Motor Sales (2004).
3. The appellant craves the leave to make any addition, alteration, modification and remodeling or withdrawing of the grounds.”
We have heard the ld AR. None appeared on behalf of the revenue when the cases were called for hearing. The revenue had not even sought an adjournment before us on the date of hearing. Hence we proceed to dispose off this appeal after hearing the ld AR. The facts stated hereinabove remain undisputed and hence the same are not 3 /Kol/2014 Now known as Visa Steel Ltd. A.Yr.2003-04 reiterated for the sake of brevity. We find that the re-assessment for the Asst Year 2003- 04 was framed on a non-existent company. The amalgamated company Visa Industries Ltd (now Visa Steel Ltd) had come into existence with effect from 1.4.2004 vide court order dated 15.10.2004 which was much prior to even the initiation of re-assessment proceedings. Hence the ld AO ought to have framed the re-assessment in the name of amalgamated company i.e Visa Industries Ltd (now Visa Steel Ltd). The framing of re- assessment in the name of the non-existent amalgamating company is bad in law and void abinitio. Hence we hold that the ld CITA had rightly annulled the assessment for the Asst Year 2003-04. Accordingly the grounds raised
by the revenue are dismissed for the Asst Year 2003-04.
6. In the result, the appeal of the revenue is dismissed. Order pronounced in the Court on 07.07.2017