The New Delhi bench of Income Tax Appellate Authority ( ITAT ) in DCIT versus NDC Telecommunications India Pvt. Ltd, ruled that assessment cannot be made on dead entity.
The Revenue approached the Tribunal against the order of appellate authority with respect to the reassessment cannot be made on dissolved companies. In instant case Assessee got dissolved with the order of Delhi High Court and the copy of order filed before CIT (A) and the same was brought to the notice of Assessing officer.
AO completed assessment pursuant to the notice under section 148 determining the loss of 7 crores. However, before CIT (A) assessee made some arguments and therein held that Assessing Officer wrongfully issued notice under section 148 of the act and carried reassessment under section 147 to a non- existing company (Assessee-company) as per the order of High court.
On first appeal, the appellate authority quashed the same. The assessee placed various decision which laid a preposition that re-assessment proceedings carried to a non-existent company is void ab initio.
On the counter part revenue believed the order of assessing officer. The ITAT bench including heard the rival submission and perused the orders of lower authorities.
Finally, the bench restored the decision of CIT (A) who quashed the re-assessment proceedings claiming that the same has been initiated on a non-existing entity and, therefore, the reassessment proceedings are void ab initio.
The bench also pressed the view taken by tribunal in M/s Sony Mobile Communications India (P) Ltd. vs. DCIT and held that re-assessment cannot be carried on dead entity.
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