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| The Tax Publishers2019 TaxPub(DT) 8312 (Del-Trib) INCOME TAX ACT, 1961
Section 143(3)
When the income was assessed in the hands of a non-existing company that had ceased to exist after its amalgamation, said assessment order would be void and hence, quashed.
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Assessment - Validity - Assessment order made in the name of amalgamated company -
Assessee-company 'S' was amalgamated with company 'P'. It preferred revision application under section 264. PCIT, while passing an order under section 264, quashed the assessment order holding that the AO had committed an error inasmuch as he had passed an order in the name of a non-existent company, i.e. 'S'. Therefore, he directed the AO to reassess the income in the hands of the existing correct legal entity. Pursuant to the directions, AO passed an order in the name of company 'P'. Assessee contended that the AO failed to comply with the directions of the PCIT as he neither gave notice to the correct legal entity, nor the assessment was made in the hands of an existing correct legal entity. Thus, the issue of notice and also completion of assessment on the company, which had already become non-existent on account of its merger with another company was illegal and bad in law and, therefore, deserves to be quashed. Held: Though AO was directed in section 264 to reassess the income in the hands of the existing correct legal entity and as a matter of fact he was aware of such directions but failed to follow the same while completing the assessment and assessed the income in the hands of a non-existing company 'S', which had ceased to exist after its amalgamation with company 'P'. Therefore, the assessment order was void and quashed.
REFERRED : Saraswati Industrial Syndicate Ltd. v. CIT (1990) 186 ITR 279 (SC) : 1990 TaxPub(DT) 1328 (SC),Sky Light Hospitality LLP v. Asstt. CIT (2018) 405 ITR 296 (Delhi) : 2018 TaxPub(DT) 0762 (Del-HC)
FAVOUR : In assessee's favour
A.Y. :
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