| The Tax Publishers2020 TaxPub(DT) 5178 (Del-Trib) INCOME TAX ACT, 1961
Section 153C Section 153A
Where factum of non-existence of assessee-company, i.e., amalgamation of assessee with another company was in the knowledge of AO, then the assessment order passed for relevant assessment year under consideration suffered from infirmity, as it was passed in the name of non-existent entity and hence, the such assessment order was both invalid and bad in law and accordingly, the same was liable to be set aside.
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Search and seizure - Under section 153C - Validity - Assessment framed in the name of non-existing entity
A search under section 132 was carried out at residential as well as business/office premises of a Group 'S'. Consequentially, AO in accordance with provision of section 153C read with section 153A issued notice to assessee-company and accordingly, assessment order was passed in the name of the assessee. It was pointed out on behalf of assessee that assessee got amalgamated with a company 'A' as per the order of the High Court and it did not exist on the date of issue of notice under section 153C read with section 153A, therefore, the consequent assessment order was not justified. It was further pointed out that the assessment order for subsequent assessment year was also passed by the same AO and the proceedings were filed as the assessee got amalgamated with 'A', however, for relevant assessment year under consideration, the same AO passed the assessment order in the name of the amalgamated non-existing entity. Held: Where the factum of non-existence of assessee-company, i.e., amalgamation of the assessee with 'A' was in the knowledge of AO, then the assessment order passed for relevant assessment year under consideration suffered from infirmity, as it was passed in the name of non-existent entity. Further, the Revenue stressed that no separate letter informing the amalgamation was filed for the year under consideration. But, where the assessment proceedings were being carried out simultaneously for six years and where the common letter was issued for all the years, then the factum of the assessee having been amalgamated with 'A' was in the knowledge of the AO and same could not be brushed aside. In any case, assessment framed in the name of the non-existing entity could not stand in the eyes of law. Hence, the impugned assessment order was both invalid and bad in law and accordingly, the same was set aside.
REFERRED : Pr. CIT v. Maruti Suzuki India Ltd. [Civil Appeal No. 5409 of 2019 vide judgement dt. 25-7-2019] : 2019 TaxPub(DT) 4931 (SC).
FAVOUR : In assessee's favour.
A.Y. : 2010-11
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