The assessment order against a non-existent entity due to a scheme of amalgamation is not legally valid.

JUDGMENT

Rajiv Shakdher, J. (Oral)

[Physical Hearing/Hybrid Hearing (as per request)]

1. These appeals concern Assessment Year (AY) 2006-07.

2. Via these appeals, the appellant/revenue has assailed a common order dated 14.12.2021 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"].

3. The Tribunal, via the impugned order, disposed of the appeal preferred by the revenue and the cross-objections filed by the respondent/assessee, against the order dated 15.03.2017 passed by the CIT(A), concerning the assessment order dated 28.02.2014 passed under Section 147/143(3) of the Income Tax Act, 1961 [in short, "the Act"].

4. We have heard counsel for the parties at some length. Our attention has been drawn by Mr Ved Jain, learned counsel, who appears on behalf of the respondent/assessee, to the order dated 05.01.2023 passed by the Court in ITA 452/2022 passed by this court.

4.1. A careful perusal of the said order shows that we had etched out the broad controversy and position of law qua the issue at hand. For the sake of convenience, the relevant parts of the said order are extracted hereafter:

"2. This appeal is directed against the order dated 14.12.2021 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"]. The only issue which arises for consideration is: whether assessment proceedings should have been taken out against the transferor company, which was not in existence, upon a scheme of amalgamation being sanctioned?

2.1. In this case, the transferor company was an entity going by the name Anirudh Overseas Pvt. Ltd. The facts concerning the same are set out in paragraph 5 of the impugned order. For the sake of convenience, the said paragraph is extracted hereafter:

"5. We have carefully considered the submissions and gone through the impugned order as well as material placed on record. It is undisputed fact that erstwhile company, M/s. Anirudh Overseas Pvt. Ltd. has ceased to exist w.e.f 01.04.2008 as the same was amalgamated with M/s. Archit Securities Pvt. Ltd. by the order of the Hon'ble Delhi High Court dated 21.01.2011. From the records also, it is seen that vide letter dated 28.06.2011 filed on 27.07.2011 before the AO wherein the assessee had intimated that now in pursuance of the Hon'ble Delhi High Court order dated 21.01.2011, M/s. Anirudh Overseas Pvt. Ltd. has ceased to exist and has merged with M/s. Archit Securities Pvt. Ltd. and requested to cancel the PAN number allotted to M/s. Anirudh Overseas Pvt. Ltd. Despite this information, the AO has proceeded to pass the assessment order in the name of non-existent company on 28.02.2014. The Tribunal in assessee's own case for AY 2005-06 (supra) have quashed assessment passed in the name of erstwhile company after observing and holding as under :

"12. We have gone through the various judgments on the issue of passing of assessment order on a non-existing entity.

13. We find that the assessee has duly discharged his duties about the issue of merger of the assessee company. The Assessing Officer has quite aware of the issue of merger but still choose to issue notice u/s 148 and complete the assessment in the case of the assessee, which is no longer in existence. To that effect, the assessment has been completed on a non- existing entity.

Hence, keeping in view the judgment of Hon'ble High Court of Delhi in the case of Spice Infotainment Ltd. Vs CIT (2012) 247 CTR 500, Impsat (Pvt.) Ltd. vs. ITO -(2004) 91 ITO 354 (Del), Hewlett Packard India (P.) Ltd. in IT A No. 40 I6IoeII2005, Modi Corp. Ltd. Vs JOLT 105 TTJ 303 and ACIT Vs M/s DLF Cyber City Developers Ltd. and the order of the Tribunal in the case of Maruti Suzuki Pvt. Ltd. 72 taxman 164, we hereby hold that the decision of the Id. CIT(A) in annulling the assessee completed on a non-existing entity is legally valid. With regard to the compliance by the assessee in the name land said to be representing Anirudh Overseas Pvt. Ltd. (not in the name of Archit Securities Pvt. Ltd.), we leave it to the d