PR. COMMISSIONER OF INCOME TAX (CENTRAL-II), vs. M/S IMAGES CREDIT AND PORTFOLIO PVT. LTD.

$-* IN THE HIGH COURT OF DELHI AT NEW DELHI 22. + ITA 582/2015 PR. COMMISSIONER OF INCOME TAX (CENTRAL-TI) Appellant Through: Ms. Suruchi Aggarwal, Senior Standing counsel with Ms. Lakshmi Gurung, Advocate. versus . IMAGES CREDIT AND PORTFOLIO PVT. LTD . ..... Respondent Through: None. WITH ITA 584/2015 PR. COMMISSIONER OF INCOME TAX (CENTRAL-TI) Appellant Through: Ms. Suruchi Aggarwal, Senior Standing counsel with Ms. Lakshmi Gurung, Advocate. . IMAGES CREDIT AND PORTFOLIO PVT. LTD . ..... Respondent Through: None. WITH 1. + ITA 431/2015 PR. COMMISSIONER OF INCOME TAX (CENTRAL-11) Appellant Through: Ms. Suruchi Aggarwal, Senior Standing ITA Nos. 582, 584, 431, 533, 432 & 433 of 2015 Page / of 6 Digitally Signed By:AMULYA Signature Not Verified

counsel with Ms. Lakshmi Gurung, Advocate. I(]iuTi IMAGES CREDIT AND PORTFOLIO PVT. LTD . ..... Respondent Through: None. WITH 2. + ITA 533/2015 • PR. COMMISSIONER OF INCOME TAX (CENTRAL-TI) Appellant Through: Ms. Suruchi Aggarwal, Senior Standing counsel with Ms. Lakshmi Gurung, Advocate. versus IMAGES CREDIT AND PORTFOLIO PVT. LTD . ..... Respondent Through: None. WITH 3. + ITA 432/2015 • PR. COMMISSIONER OF INCOME TAX (CENTRAL-TI) Appellant Through: Ms. Suruchi Aggarwal, Senior Standing counsel with Ms. Lakshmi Gurung, Advocate. versus IMAGES CREDIT AND PORTFOLIO PVT. LTD . ..... Respondent Through: None. AND ITA Nos. 582, 584, 431, 533, 432 & 433 of 2015 Page 2 of 6

the entire proceedings deserve to be quashed. 3. There wasa search and seizure action under Section 132 of the Act in the cases of B.K. Dhingra, Poonam Dhingra and Madhusudan Buildcon Pvt. Ltd., New Delhi on October 2008. Certain documents were purportedly recovered from the residential premises of B.K. Dhingra which were said to belong to the Respondent company. Notice was issued under Section 1 53A to the said company on 10th September 2010. However prior thereto on 25th May 2010 this Court passed an order under Section 394 of the Companies Act, 1956 approving the amalgamation of the Respondent company with Sainath Associates Pvt. Ltd. ('SAPL'). The amalgamation was to become effective from the 'appointed date i.e. 1st April 2008'. 4. Consequently, on the day the notice was issued to it under Section 153C of the Act i.e. 10th September 2010, the Respondent company had ceased to exist. 5. In the impugned order, the ITAT referred to an earlier decision dated 3rd August 2011 of this Court in Spice Enfotainment Ltd. v. CIT (ITA No. 475/2000) where in similar circumstances, it was held that the defect of passing an assessment order in respect of an entity that had ceased to exist ) ITA Nos. 582, 584, 431, 533, 432 & 433 of 2015 Page 4 of 6

'I on the date of such order, could not be treated as a mere procedural defect. Learned counsel for the Revenue referred to the decision of the CIT (A) dated 16 t July 2013 where it was noticed that during the course of the assessment proceedings the authorised signatory of the Respondent by a letter dated 25th September 2010, using the letterhead of the Respondent, sought copies of documents without making any reference to the amalgamation of the Respondent with SAPL. Further the same authorised signatory wrote another letter on 13th October 2010 again using the letterhead of the Respondent to the AO. Again there was no reference to the amalgamation. It was noticed by the CiT (A) that it was only on I 9th November 2010 that the Respondent referred to its merger with SAPL enclosing a copy of the order of the High Court. In the assessment order, the Assessing Officer ('AO') referred to the Respondent as having amalgamated with SAPL. On the basis of the above facts, learned counsel urged that the decision of this Court in .Spice Enfotainment Ltd. (supra) would have no application in the present case. 6. The Court finds that de hors the decision in Spice Enfotainment Ltd. (supra) the undisputed fact is that on the date on which the notice was issued to the Respondent under Section 153C of the Act i.e. 10th September 2010 it ITA Nos. 582, 584, 431, 533, 432 & 433 of 2015 Page 5 of 6

7 was an entity that has ceased to exist in the eyes of law. The mere use of the noticee's letterhead to address correspondence to the AU cannot tantamount to reviving an entity which has already ceased to exist. Further the mere fact that in the assessment order the AU has said that the Respondent had amalgamated with SAPL could not cure the fundamental defect in the very proceedings initiated under Section 1 53C of the Act i.e. a notice being issued to an entity which does not exist in the eyes of law. 7. In that view of the matter, the Court is satisfied that the ITAT has committed no legal error in coming to the conclusion that the entire proceedings initiated under Section 153C of the Act stood vitiated and deserves to be quashed. No substantial question of law arises for determination. 8. The appeals are dismissed. k-"'t S. MURALIDHAR, J VIBHU BAKHRU, J AUGUST 19, 2015/dn JTA Nos. 582, 584, 431, 533, 432 & 433 of 2015 Page óof6