The Income Tax Appellate Tribunal (ITAT), Bangalore bench has deleted an addition against Infosys BPO Limited holding that the assessment made, and the order passed on the amalgamating companyafter its dissolution is invalid.
Infosys BPO Limited,the assessee, an Indian Company engaged in the business of business process outsourcing, ceased to exist as on the date on which the order of the assessment was passed on merger with M/s. Infosys BPM Ltd. The Assessing Officer, while concluding the assessment proceedings against the assessee and passed an order.
Before the authorities, the assessee contended that the order passed in the name of a company which seized to exist was invalid.
The Tribunal bench comprising ITAT Vice President N V Vasudevan and Accountant Member ChandraPoojari, after quoting the Apex Court decision in the case of Maruti Suzki, observed that the order of assessment framed in the name of a non nonexistent entity after it ceased to be a subsisting entity, was ab-initio initiovoid and therefore, null in the eyes of law.
“On similar facts and circumstances of the case and law applicable, the ITAT, Bangalore bench in ACIT v iGate Infrastructure Management Services Ltd held that assessment order passed by the Income tax authorities in Delhi, after change in registered office of the company from Delhi to Bangalore, is without jurisdiction and bad in law. In view of the above, in the event of amalgamation of companies, (i) the income of the amalgamating company upto the date of amalgamation should be assessed in the hands of the amalgamating company (predecessor), if the amalgamating company is in existence at the time of initiation of assessment proceedings. (ii) If the amalgamating company is not in existence at the time of initiation of assessment proceedings, the income of the amalgamating company upto the date of amalgamation should be assessed in the hands of the amalgamated company (successor) under the caption “successor of predecessor” in like manner and to the same extent as it would have been made on the predecessor,” the bench said.
While concluding the issue in favour of the assessee, the Tribunal held that “the effect / consequence of the above position of law is that the assessment made and the order passed on the amalgamating company i.e., predecessor when the said company is dissolved / not in existence isa nullity. We therefore hold that the impugned assessment order is non-est and ab initio void and, therefore is hereby annulled.”
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