An assessment order framed against a non-existing company is void ab initio, the Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) had quashed the assessment order.
The appeal is filed by the assessee against the order dated 28/12/2018 passed by DCIT, Circle – 4(1)(2), Bangalore as it is passed on a non-existing entity erstwhile Marlabs Software Pvt. Ltd.
The assessee submitted that the effective date of amalgamation was 01/04/2016 and intimation to the Assessing Officer (AO) was given by letter dated 15/12/2017 and the order of amalgamation by the National Company Law Tribunal, Bangalore Bench, was delivered on 05.09.2017.
Further stated that the directions are issued in the name of the transferee company Marlabs Innovations Pvt. Ltd. and the impugned assessment order passed the order in the name of Marlabs Software Pvt. Ltd., which is a non-existent company.
In the case of PCIT vs. Maruti Suzuki India Ltd., Supreme Court has held that “upon the amalgamating company ceasing to exist, it cannot be regarded as a person u/s. 2(31) against whom assessment proceedings can be initiated or an assessment order would be passed. “
In light of various precedents, it was observed that a notice issued to a non-existent company would be void-ab-initio and no valid jurisdiction can be assumed by the assessing officer by issuing such an invalid notice. Since the assessee company ceased to be in existence on the date when the AO passed the order of assessment, an assessment so framed is not sustainable in the eyes of law.
The Coram comprising Shri. Chandra Poojari, accountant member and Smt. Beena Pillai, judicial member quashed the impugned order and allowed the appeal. Shri L. Bharath appeared for the assessee and Shri Arun Kumar appeared for the revenue.
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