The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that Assessment order proved to be null and void having not been passed for decisions brought by counsel not being applicable.
The assessee challenged transfer pricing adjustment as well as corporate additions in various grounds of appeal, which in sum and substance are; firstly, grounds pertaining to transfer pricing adjustment on account of import of goods including spares from Associated Enterprises. Secondly, disallowance of business promotion expenses; and lastly, levy of interest under Section 234B and 234C. However, in both the years, assessee has taken a legal ground that wherein not only the draft assessment order, transfer pricing order and final assessment order have been passed in the case of a non-existing entity and therefore, the entire final assessment order is null and void.
The counsel for the assessee submitted it cannot be a case where the department was not aware of the merger of erstwhile CHIPL with IMPL. Accordingly, in view of the judgment of Supreme Court in the case of PCIT vs. Maruti Suzuki India Ltd., the whole assessment is bad in law.
Further, he has also relied upon the decision of the ITAT Mumbai Bench in the case of Candor Renewable Energy Pvt. Ltd. wherein the Tribunal has considered the decision of Maruti Suzuki India Ltd. and the decision of the Supreme Court in the case of PCIT vs. Mahagun Realtors Pvt. Ltd. and submitted that the Tribunal has categorically analysed the ratio and the principle of both the judgments and have held that once the intimation was given to the department and to the AO about the merger, then the assessment order in the case of nonexisting entity is bad in law.
After hearing both the parties, the tribunal held that the judgments brought by counsel are not applicable on the facts of the assessee’s case albeit its facts are clearly covered by the judgment of Apex Court in the case Maruti Suzuki India Ltd.
The two member bench consisting of Amarjit Singh (Accountant member) and Amit Shukla (Judicial member) held that the entire assessment order have not been passed in the case of non-existing entity is null and void and is hereby quashed. Thus the appeal was dismissed.
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