The Income Tax Appellate Tribunal (ITAT), Delhi Bench held that framing of an assessment against a non-existent amalgamating entity was not procedural irregularity but a jurisdictional defect not covered under section 292B, so, assessment made by AO was a nullity in the eyes of law.
The erstwhile entity ‘Genpact India Private Limited’ was amalgamated with ‘Genpact India’ with effect from April 30, 2016, as a result of the scheme of amalgamation duly approved by the order by High Court at Telangana and Andhra Pradesh as well as vide order by Delhi High Court.
The Assessing Officer has passed the order by mentioning in the title of the order the name of the assessee as Genpact India, which is now merged with “Genpact India Private Limited. Thus, the Assessing Officer was very much aware that the amalgamating company Genpact India is no longer in existence.
The CIT(A) upheld the action of the AO in bringing to tax, an amount of Rs.26,25,00,00,000/-, being consideration paid by the Appellant for buy-back of shares under section 391 of Companies Act, 1956 as income chargeable to tax under section 115QA of the Act.
The issue arose for consideration was AO on being intimated of the fact of amalgamation still the AO chose to pass the assessment order in the name of the non-existent company amalgamating company.
The Assessee contended that since the order had been passed in the name of a non-existent company, therefore, the same had to be quashed and the provisions of Section 292B would not come to the rescue of the Department.
The tribunal consisted of Judicial Member Suchitra Kamble and Accountant Member, B.R.R. Kumar held, while quashing the order of CIT(A) held that the amalgamating company i.e. Genpact India was not in existence at the time of conducting assessment proceedings as well as on the date of passing Assessment Order. Once it is found that assessment is framed in the name of a non-existing entity, it does not remain a procedural irregularity of nature which could be cured by invoking the provisions of Section 292B of the Act.
“Hence, the Assessment proceedings, as well as the Assessment order itself, are void ab initio. Therefore, the assessment order is set aside,” the tribunal said.
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