Relief to Sony Pictures: ITAT sets aside Assessment Order passed against Non-Existing entity [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench sets aside assessment order passed against non-existing entity and thereby granting relief to Sony Pictures Networks India Private Limited.

The assessee filed return of income for the impugned assessment year in the name of SPE Networks India Inc. The draft assessment order was passed in the name of ‘SPENI’. Even the Dispute Resolution Panel (DRP) issued directions under section 144C(5) of the Act in the name of ‘SPENI’.

 The Bombay High Court vide order dated 01/07/2016 approved the Scheme of Amalgamation of ‘SPENI’ with Sony Pictures Networks India Private Limited [‘SPNI’]. Consequent to amalgamation, SPENI ceases to exist from effective date as defined in the Scheme.

The assessee via communication letter intimated the Assessing Officer that consequent to the merger, the final assessment order be passed in the name of successor entity i.e. ‘SPNI’. A copy of the order of Hon'ble Bombay High Court approving the Scheme of Amalgamation was also furnished along with said request. The Assessing Officer despite being aware of the fact of amalgamation and name of successor entity passed the final assessment order in the name of a non-existing entity.

P.J Pardiwala appearing on behalf of the assessee submitted at the outset that at this stage he is only pressing legal issue that is: The impugned assessment order has been passed in the name of a non-existing entity. Hence, the assessment order is bad in law.

Surabhi Sharma representing the Department vehemently defended the assessment order. The Departmental Representative submitted that intimation regarding change of name was conveyed to the Assessing Officer after finalizing of the draft assessment order and the directions of the DRP. The Assessing Officer passed the final assessment order in the same name as was mentioned in the income tax return, draft assessment order and the directions of the DRP.

A Coram consisting of Pramod Kumar, Vice President and Vikas Aswathy, Judicial Member observed that “The impugned assessment order passed in the name of non-existing entity suffers from jurisdictional defect, hence, the same is set-aside.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to TaxscanPremium. Follow us on Telegram for quick updates.