The Income Tax Appellate Tribunal (ITAT), Delhi bench in ACIT v. M/s. Mahagun Realtors (P) Ltd held that the mentioning of the wrong name in an assessment order cannot be cured by invoking section 292B of the Income Tax Act, 1961 and the same would be liable to be quashed as it is against a non-existent entity.
Assessee- Company engaged in the business of real estate, merged with Mahagun India Pvt. Ltd as per order of the Hon’ble Delhi High Court dated 10.09.2007 w.e.f 01.04.2006.
The department conducted search operations in the business premises of the assessee wherein the Revenue recorded a statement of Mr. Amit Jain who admitted that Mahagun Realtors Pvt. Ltd, the assessee, has merged with Mahagun India Pvt. Ltd.
Despite the above information available with the AO, the assessment under section 153A of the Act was passed by the Assessing Officer in the name of Mahagun Realtors Pvt. Ltd (represented by Mahagun India Pvt. Ltd after amalgamation).
The assessee contended before the appellate authorities that such orders cannot be sustained as the company has already been merged with another company and it did not exist on the date of order. It was contended that the order on a non-existent company cannot be passed. In support of the above contentions, they relied on the decision of the Delhi High Court in case of Spice Infotainment Ltd Vs. CIT and CIT Vs. Dimension Apparel Pvt. Ltd.
The Revenue relied on the Supreme Court decision in Skylight Hospitality LLP wherein the Court dismissed a Special Leave Petition against the order of the Delhi High Court that that merely wrong name given in the notice is a clerical error which could be rectified u/s 292B of the Act.
Overruling the Revenue’s contentions, the Tribunal bench held that the above decision is rendered with respect to the issue of “notice” and not of the “order”.
“Therefore, the fact of the decision before the Hon’ble Delhi High Court were altogether different and it is not applicable to the facts of the present case. In view of this we quash the assessment order passed by the AO in the name of the non-existent company,” the bench said.
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