The Income Tax Appellate Tribunal (ITAT) Mumbai bench held that assessment order passed against non -existing entities is invalid.
Assessee Crisil Ltd.providing back end support for corporate research activities to CRISIL UK According to the scheme of merger approved by the Hon’ble Bombay High Court, the Pipal Research Analytics and Information Services India Pvt. Ltd. merged with CRISIL Limited with effective date of 1st April, 2016.
Bombay High Court sanctioned the scheme of merger of Pipal Research Analytics and Information Services India Pvt. Ltd. with CRISIL limited with effect from 1 st April, 2016, as per order dated 8th September, 2016, which was communicated to the learned Assessing Officer by letter dated 22nd September, 2016.
Thereafter the assesee filed the return of income For A.Y. 2013-14 on 23rd November, 2013. Transfer Pricing Officer on a reference on 30th September, 2016, passed an order under Section 92 CA (3) of the Income Tax Act in the name of Pipal Research Analytics and Information Services India Pvt. Ltd.Thus the AO also passed draft assessment order against the non existing entity
Aggrieved by the order, the assessee filed an appeal before the Dispute Resolution Panel (DRP). who uphold the order . Thereafter the assesee filed a second appeal before the tribunal.
Before the bench Chandani Shah, counsel for the assessee submitted that relied upon the decision of Supreme Court in case of CIT vs. Maruti Suzuki India Ltd. 107 it is submitted that “wherein it has been held that where the assessee company is amalgamated with another company and thereby lost its existence, an assessment order passed subsequently in the name of same non-existent entity would be without jurisdiction and was to be set aside assessment order is invalid as it has been passed in the name of a non-existent entity.”
Thus assessment order is invalid as it has been passed in the name of a non-existent entity
Vachaspati Tripathi, Counsel for the revenue argued that there is no harm to the assessee as it has been passed in the name of a non-existent company.
The tribunal after reviewing the facts and submissions of the both parties, the two member bench of Prashant Maharishi ,(Accountant Member ) and Sandeep Singh Karhail,(Judicial Member) held that AO passed the order without considering the merger of Pipal Research Analytics and Information Services India Pvt. Ltd. with CRISIL Limited . After merging to form a new entity the AO could not pass the assessment order.
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