The Delhi bench of the Income Tax Appellate Tribunal (ITAT), has held that the re-assessment under section 147 read with section 143(3) of the Income Tax Act, 1961 is not sustainable in the eye of law since the same was framed in the name of a non-existing entity.
The assessee company submitted its return for the assessment year 2006-07 on 28.11.2006 which was processed under section 143(1) of the Act. A notable change happened with the merging of the assessee company with M/s. Shark Packaging (India) Pvt. Ltd. w.e.f. 01.04.2008 under a scheme of amalgamation approved by the High Court of Delhi vide order under section 394 of the Companies Act, 1956. The appellant claimed, various grounds which include erred finding of Commission of Income Tax both on facts and in law.
After considering the arguments from both sides, Accountant Member, Dr B R Kumar and Judicial Member MS Astha Chandra observed that the question of law that the impugned reassessment order under section 147/143(3) passed on 10.03.2014 is illegal and ab-initio void as it has been passed in the name of M/s. Savera Marketing Pvt. Ltd which is a non-existing entity that had been amalgamated with M/s. Shark Packaging (India) Pvt. Ltd. Despite this information, the Assessing Officer proceeded to issue a notice under section 148 dated 25.03.2013 in the name of a non-existing company and continued the reassessment proceedings by the issue of statutory notices under sections 143(2) and 142(1) also in the name of the non-existing company turned in the passing of reassessment order under section 147 read with section 143(3) of the Act.
The bench observed the same view in Spice Enfotainment Ltd. vs. CIT, BDR Builders & Developers Pvt. Ltd. vs. ACIT, Gayatri Microns Ltd. vs. ACIT. In light of the above-said precedents, the Delhi bench quashed the reassessment order dated 10.03.2014 and the appellate order dated 05.09.2016 by the commissioner of Income Tax (Appeal).
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