The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the re-assessment order under section 147 of the Income Tax Act,1961 in the name of any non-existing entity was invalid.
S.S.S Glass Pvt. Ltd, the appellant assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the re-assessment order passed by the assessing officer under section 147 of the Income Tax Act in the name of the non-existing entity.
Kapil Goel, the counsel for the assessee contended that the earlier entity was converted into a limited liability partnership (LLP) and was properly informed to the assessing officer by the assessee at the very first instance objecting to the issuance of notice under section 148 of the Income Tax Act against a nonexistent entity.
Rajareswari R, the counsel for the revenue relied on the decisions made by the lower authorities and contended that the assessee company was into LLP during assessment proceedings with the sole intention to use it as technical ground during appellate proceedings.
The bench observed that the assessing officer issued a notice under section 148 of the Income Tax Act and the assessee filed a written objection informing that the company does not exist on the date of issuance of said notice and therefore the re-assessment proceedings against the nonexistent entity were not legally valid and are liable to be deleted.
The two-member bench comprising Chandra Mohan Garg (Judicial) and Pradip Kumar Kedia (Accountant) held that the issuance of notice under section 148 of the Income Tax Act and the reassessment order under section 147 of the Income Tax Act against non-existing entity was quashed and declared as void ab-initio while allowing the appeal filed by the assessee.
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