The Indore bench of the Income Tax Appellate Tribunal (ITAT) held that the notice issued by the Assessing Officer in aware of the non-existence of the assessee-company on the account of amalgamation stands invalid.
The assessee is a company engaged in the business of civil construction and BOT contracts. The return was filed under Section 139 of the Income Tax Act and the same was processed under Section 143(1) of the Income Tax Act. A search under Section 132 of the Income Tax Act was carried upon the assessee.
The Authorized Representative submitted that the assessee company got demerged into two companies vide order of the High Court of Madhya Pradesh. The new companies are (i) Keti-T Construction (India) Limited, and (ii) Keti-KJ Construction India Limited; the former company went to the Garg family and the latter went to the Jakhetia family.
The Assessing Officer has himself recorded that the assessee company has demerged into two companies and has taken over the assets and liabilities of the assessee. The Authorized Representative strongly contended that issuance of notice to a non-existent assessee-company despite having knowledge, was an action of the Assessing Officer which was illegal and void ab initio.
The ITAT Pune Bench in DCIT Vs. Barclays Global Service Centre Private Limited, ITA No. 46/Pun/2021 held that if the Assessing Officer is aware of the non-existence of the assessee-company on account of amalgamation and yet issues notice to the non-existent assessee, the action of the Assessing Officer would be invalid.
The Two-member bench comprising of Vijay Pal Rao (Judicial member) and B.M. Biyani (Accountant member) held that the proceedings conducted by the Assessing Officer in the present case were not valid. Therefore, the assessment order passed by the Assessing Officer was quashed. Thus, the appeal of the revenue was dismissed.
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