Income Tax Appellate Tribunal - Ahmedabad
The Dcit, Central Circle-2(2), ... vs Shrimate Infrastructure Pvt. Ltd , ... on 28 January, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "C" BENCH
Before: Shri T.R. Senthil Kumar, Judicial Member
And Shri Narendra Prasad Sinha, Accountant Member
IT(SS)A Nos: 191 to 193/Ahd/2021
Assessment Years: 2012-13 to 2014-15
The DCIT Shrimate Infrastructure
Central Circle-2(2), Pvt. Ltd.
Ahmedabad Vs Shaligram House,
B/h S G Highway,
Rajpath Rangoli Road,
Ahmedabad-380059
PAN: AAPCS5841M
(Appellant) (Respondent)
Revenue Represented: Shri Rignesh Das, CIT-DR
Assessee Represented: Shri S.N. Soparkar, Sr. Ad v &
S hri P arin Shah, ARs
Date of hearing : 16-12-2025
Date of pronouncement : 28-01-2026
आदे श/ORDER
PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
These three appeals are filed by the Revenue as against the common appellate order dated 03/08/2021 passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad [hereinafter referred to as "CIT(A)"] arising out of the assessment orders passed under section 153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") relating to the Assessment Years 2012-13, 2013-14 and 2014-15 respectively. Since common legal issue is involved in these appeals, the same are disposed of by this common order.
I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 2 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
2. Brief fact of the case that the assessee originally a Private Limited Company engaged in the business of real estate and was then converted into a Limited Liability Partnership (hereinafter referred as 'LLP' in short) on 14-10-2014 that is Financial Year 2014-15 relevant to the Assessment Year 2015-16 under the name and style of M/s. Shrimate Infrastructure LLP. The details of income tax returns filed by the assessee company under section 139(1) of the Act are as under:
No. Asst. Years Date of filing Returned Income /(Loss) (Rs) 1 2012-13 28.08.2012 (-112,950 2 2013-14 29.09.2013 (-)51,263 3 2014-15 21.09.2014 (-)75,356 4 2015-16 24.09.2015 Nil 2.1. Regular assessment proceeding was completed u/s.143(3) of the Act vide order dated 04-12-2015 for Asst Year 2013-14, by the ITO, Ward 4(1)(3), Ahmedabad, wherein no additions was made.
Subsequently assessment proceeding for Asst. Year 2014-15 was duly completed vide order passed u/s 143(3) of the Act dated 20- 12-2016 by the ITO, Ward 4(1)(3), Ahmedabad, wherein also no additions have been made.
3. A search and seizure action under section 132 of the Act was conducted on 06-03-2018 covering the various entities, persons and concerns known as forming part of Satyam Group, Sangani Group and Shaligram Group of entities, inter-alia covering the assessee company as well as the LLP firm being a part of Shaligram Group of persons. Pursuant to the execution of the Search I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 3 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
warrants, notices u/s. 153A of the Act were issued in case of the assessee company on 28-01-2019 and also in the case of the LLP firm on 30-01-2019 for the very same Assessment Years 2012-13 to 2017-18.
3.1. In response to the notices u/s.153A of the Act, the assessee company filed its return of income for Assessment Years 2012-13, 2013-14, 2014-15 and 2015-16. There was no variation in the original returned income filed u/s.139 of the Act vis-a-vis returns filed in response to the notices issued u/s.153A of the Act. Assessee's case was referred for special audit u/s.142(2A) of the Act, vide direction dated 27-12-2019 and 29-12-2019. The Special Audit report was furnished by the assessee before the AO on 19-06- 2020.
3.2. In the meanwhile LLP firm also filed its return of income u/s. 153A of the Act detailed as under:
Assessment Return filed Return filed Returned
Year u/s. 139(1) u/s.153A Income /Loss)
2012-13 NA NA NA
2013-14 NA NA NA
2014-15 NA NA NA
2015-16 25.09.2015 22.08.2019 (-) 8,763
2016-17 22.09.2016 22.08.2019 NIL
2017-18 03.10.2027 22.08.2019 (-1) 1.14. 172
2018-19 24.10.2018 NA 8,74,07,870
3.3. The fact about the conversion of the assessee company from Private Limited into LLP Firm also finds due mention in the Directors Report and Financial Statements of the assessee company for the Financial Year 2014-15 (period ended 13th October I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 4 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
2014) and also been mentioned in the Special Audit report. On furnishing of the audit report, the AO completed the assessment proceedings in the case of the assessee company by framing the assessment orders in the name and PAN of the assessee company u/s.153A r.w.s 143(3) of the Act assessing the total income detailed as under:
SL. Asst Years Assessed Income Addition Amount
No. (Rs) (Rs.)
1 2012-13 68,69,73,000 68,69,73,000
2 2013-14 51,01,0.0,610 51,01,00,610
3 2014-15 4,98,12,220 4,98,87,576
4. Aggrieved against the assessment orders the assessee filed appeals before the Ld CIT[A] claiming that the AO erred in passing assessment orders on non-existing entity, that is the assessee company was NON-EXISTENT by virtue of conversion into a LLP Firm on 14-10-2014. Further it remains an undisputed fact on record that the AO was well aware of the fact that the assessee company was very well NON-EXISTING and thus ought not have passed any order on an NON-EXSISTING entity. The assessee company relied on the decision of ITAT Ahmedabad Bench in the case of M/s. Urmin Marketing Pvt Ltd -Vs- DCIT [2020] 122 Taxmann.com 40 wherein held as follows:
".... Where assessee-company got amalgamated with another company and, at a later date, resulting/amalgamated company got converted into a LLP, but Assessing Officer framed assessment order in the name of erstwhile company which was a non-existent entity at the point of time, assessment made Assessing Officer was void-ab-initio and nullity in the eye of law."
I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 5 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
Further various judgements of Hon'ble Supreme Court, High Courts and jurisdictional ITAT were held assessment made on a non-existent entity is void-ab-initio and nullity in the eye of law, viz.
i. Pr. CIT v. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375/265 Taxman 515/416 ITR 613 (SC) (para 16), ii. Sky Light Hospitality LLP v. Asstt. CIT [2018] 92 taxmann.com 93/254 Taxman 390 (SC) (para 17), iii. Emerald Co. Ltd. v. ITO [2017] 83 taxmann.com 29 (Kol-Trib) (para18) iv. CIT v. Dimension Apparels (P.) Ltd. [2014] 52 taxmann.com 356/[2015] 370 ITR 288 (Delhi) (para 18), v. CIT v. Intel Technology (P.) Ltd. [2015] 57 taxmann.com 159/232 Taxman 279/[2016] 380 ITR 272 (Kar.) (para 18), v. Snowhill Agencies (P.) Ltd. v. Pr. CIT [IT Appeal No. 1775 (Ahd.) of 2019, dated 21-1-2020].
4.1. Ld CIT[A] considered all the facts, decisions/judgments of Hon'ble Courts, submission of the assessee and held that the assessment completed by the Ld AO on the non-existing entity is not in accordance with the provisions of law. Even otherwise also it is an undisputed fact that on the date of initiation of the search, no assessment proceedings were pending in these assessment years. Therefore, the proceedings were not abated as mentioned in the second proviso to section 153A (1) of the Act. Thus, that the AO has lost sight of the fact that he was not making an assessment u/s.153A(1) of the Act read with its second proviso. Further there is no indication in the contents of the assessment orders that the additions were made on the basis of any incriminating material I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 6 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
found and seized in the course of search at the place of the assessee. Therefore, the action of the AO for making additions are not justified. Accordingly, the additions made in the assessment orders completed u/s. 153A were deleted by observing as follows:
"... 10.27. Having considered all the facts, decision/judgments of Hon'ble Courts discussed in the preceding paras of this order and the submission filed by the appellant it is held that the assessment completed by the AO on the non-existing entity is not in accordance with the provisions of law.
Even otherwise also it is an undisputed fact that on the date of initiation of the search no assessment proceedings were pending in this assessment year. Therefore, the proceedings were not abated in the case as mentioned in the second proviso to section 153A (1) of the Act. It seems that the AO lost sight of the fact that he was not making an assessment under section 153A (1) of the Act read with its second proviso. As discussed hereinabove, there is no indication in the contents of the assessment order that the addition was made on the basis of any incriminating material found and seized in search at the place of appellant.
10.28. In view of the aforesaid findings and respectfully following the judgments/decisions of Jurisdictional High Court, Jurisdictional Tribunal and other Courts, wherein it has been held that in absence of incriminating material/evidence, addition/disallowance cannot be sustained within the pale of section 153A of the Act. In my considered opinion, the action of the AO for making addition is not justified. Accordingly, the addition made in the assessment completed u/s. 153A is deleted."
5. Aggrieved against the common Appellate order, the Revenue is in appeal before us raising the following Grounds of Appeal in IT(SS)A No.191/Ahd/2021 relating to Asst. Year 2012-13:
1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions made by the AO in the order u/s 153A r.w.s 143(3) on legal grounds that the additions should have been made u/s 153C, without appreciating the fact that provisions of section 153C empowers the Assessing Officer to assess or re-assess the income of the person other than searched person, but the assessee being searched person was squarely covered under section 153A.
I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 7 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that any addition during the assessment u/s.153A has to be confined to the incriminating material found during the course of search u/s.132(1) of the Act, even though, there is no such stipulation in sec. 153A of the Act.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that sec. 153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material.
4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s.158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec. 153BI specifically states that the provisions of Chapter-XIV-B, under which sec.158BB falls, would not be applied where a search was initiated u/s. 132 after 31/5/2003.
5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the said six assessment years after the search u/s. 132 is conducted in the case of the assessee, and that if the interpretation of the Id. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. Further, the AO is duty bound to assess correct income of assessee as held by the Hon'ble Apex Court in the case of Mahalaxmi Sugar Mills, 160 ITR 920(SC).
6. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the decisions of Hon'ble Delhi High court in the case of CIT Vs Anil Kumar Bhatia [211 Taxman 453, 352 ITR (493)] & Kerala High Court in the case of E.N. Gopakumar vs. Commissioner of Income-tax (Central) [2016] 75 Taxmann.com 215 (ker.) wherein Courts I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 8 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
held that assessments in a search case can be concluded against interest of assessee including making additions even without any incriminating material being available against assessee in search under section 132.
7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.68,69,73,000/- made on account of unaccounted investment in land.
8. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the assessment completed by the AO on the non-existing entity without appreciating the fact that assessee company viz. Shrimate Infrastructure Pvt Ltd. was converted into a Limited Liability Partnership (LLP) on 14/10/2014 i.e. FY.2014-15 relevant to AY.2015-16 under the name and style of Shrimate Infrastructure LLP. By virtue of such conversion all the assets and liabilities of Shrimate Infrastructure Pvt Ltd. were also transferred to its successor Shrimate Infrastructure LLP. Therefore existing entity Shrimate Infrastructure LLP cannot elude from its obligation on the pretext of being a nonexistent entity at the time when such transactions were being executed.
9. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O.
10. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent.
5.1. Revenue is in appeal before us raising the following Grounds of Appeal in IT(SS)A No.192/Ahd/2021 relating to Asst. Year 2013-14:
1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions made by the AO in the order u/s 153A r.w.s 143(3) on legal grounds that the additions should have been made u/s 153C, without appreciating the fact that provisions of section 153C empowers the Assessing Officer to assess or re-assess the income of the person other than searched person, but the assessee being searched person was squarely covered under section 153A.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that any addition during the assessment I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 9 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
u/s.153A has to be confined to the incriminating material found during the course of search u/s.132(1) of the Act, even though, there is no such stipulation in sec. 153A of the Act.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material.
4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s.158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec. 153A and sec.153BI specifically states that the provisions of Chapter-XIV-B, under which sec.158BB falls, would not be applied where a search was initiated u/s.132 after 31/5/2003.
5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the said six assessment years after the search u/s.132 is conducted in the case of the assessee, and that if the interpretation of the Id. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. Further, the AO is duty bound to assess correct income of assessee as held by the Hon'ble Apex Court in the case of Mahalaxmi Sugar Mills, 160 ITR 920(SC).
6. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the decisions of Hon'ble Delhi High court in the case of CIT Vs Anil Kumar Bhatia [211 Taxman 453, 352 ITR (493)] & Kerala High Court in the case of E.N. Gopakumar vs. Commissioner of Income-tax (Central) [2016] 75 Taxmann.com 215 (ker.) wherein Courts held that assessments in a search case can be concluded against interest of I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 10 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
assessee including making additions even without any incriminating material being available against assessee in search under section 132.
7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.34,75,55,500/- made on account of disallowance of bogus compensation charges.
8. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.8,23,86,658/- made on account of unexplained Cash credit u/s 68 of the I.T. Act, 1961.
9. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.8,01,58,450/- made on account of accommodation loan u/s 68 of the I.T. Act, 1961.
10. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the assessment completed by the AO on the non-existing entity without appreciating the fact that assessee company viz. Shrimate Infrastructure Pvt Ltd. was converted into a Limited Liability Partnership (LLP) on 14/10/2014 i.e. FY.2014-15 relevant to AY.2015-16 under the name and style of Shrimate Infrastructure LLP. By virtue of such conversion all the assets and liabilities of Shrimate Infrastructure Pvt Ltd. were also transferred to its successor Shrimate Infrastructure LLP. Therefore existing entity Shrimate Infrastructure LLP cannot elude from its obligation on the pretext of being a nonexistent entity at the time when such transactions were being executed.
11. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O.
12. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent.
5.2. Revenue is in appeal before us raising the following Grounds of Appeal in IT(SS)A No.193/Ahd/2021 relating to Asst. Year 2014-15:
1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions made by the AO in the order u/s 153A r.w.s 143(3) on legal grounds that the additions should have I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 11 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
been made u/s 153C, without appreciating the fact that provisions of section 153C empowers the Assessing Officer to assess or re-assess the income of the person other than searched person, but the assessee being searched person was squarely covered under section 153A.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that any addition during the assessment u/s 153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec. 153A of the Act.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material.
4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s. 158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec. 153A and sec.15381 specifically states that the provisions of Chapter-XIV-B, under which sec.158BB falls, would not be applied where a search was initiated u/s 132 after 31/5/2003.
5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the said six assessment years after the search u/s.132 is conducted in the case of the assessee, and that if the interpretation of the Id. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. Further, the AO is duty bound to assess correct income of assessee as held by the Hon'ble Apex Court in the case of Mahalaxmi Sugar Mills, 160 ITR 920(SC). I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 12 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
6. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the decisions of Hon'ble Delhi High court in the case of CIT Vs Anil Kumar Bhatia [211 Taxman 453, 352 ITR (493)] & Kerala High Court in the case of E.N. Gopakumar vs. Commissioner of Income-tax (Central) [2016] 75 Taxmann.com 215 (ker.) wherein Courts held that assessments in a search case can be concluded against interest of assessee including making additions even without any incriminating material being available against assessee in search under section 132.
7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.3,04,19,939/- made on account of disallowance u/s 36(1)(iii) of I.T. Act, 1961.
8. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.85,00,000/- made on account of accommodation entries u/s 68 of the I.T. Act, 1961.
9. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.18,863/- made on account of disallowance of interest.
10. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.58,73,742/- made on account of unexplained cash credit u/s 68 of the I.T. Act, 1961.
11. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.50,75,030/- made on account of accommodation loan entry u/s 68 of the I.T. Act, 1961.
12. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the assessment completed by the AO on the non-existing entity without appreciating the fact that assessee company viz. Shrimate Infrastructure Pvt Ltd. was converted into a Limited Liability Partnership (LLP) on 14/10/2014 i.e. FY.2014-15 relevant to AY.2015-16 under the name and style of Shrimate Infrastructure LLP. By virtue of such conversion all the assets and liabilities of Shrimate Infrastructure Pvt Ltd. were also transferred to its successor Shrimate Infrastructure LLP. Therefore existing entity Shrimate Infrastructure LLP cannot elude from its obligation on the pretext of being a nonexistent entity at the time when such transactions were being executed. I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 13 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
13. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O.
14. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent.
6. Ld. CIT-DR Shri Rignesh Das appearing for the Revenue strongly argued that the Ld. CIT(A) is not correct in deleting the addition made by the assessing officer based on seized materials and relied upon Co-ordinate Bench decision in the case of M/s. Sadbhav Engineering Ltd. -Vs.- DCIT in IT(SS)A Nos. 170 to 175/ Ahd/2021 dated 10-01-2025 wherein it was concluded that incriminating material found in the search conducted on the assessee and its sub-contractors, the same were rightly used by the Revenue Authorities for disallowance of sub-contract expenses. Further Ld. CIT(A) is erred in quashing the assessments completed on non-existing entity for the Asst. Years 2012-13 to 2014-15. Thus Ld. CIT-DR requested to reverse the common appellate order passed by Ld. CIT(A).
7. Per contra Ld. Senior Counsel Mr. S.N. Soparkar appearing for the assessee brought to our attention that the assessee company filed its Return of Income for the Asst. Years 2012-13 to 2014-15 since notices u/s. 153A were issued by the Ld. A.O. Similarly, in the case of Partnership firm M/s. Shrimate Infrastructure LLP also filed Return of Income for the same Asst. Years 2012-13 to 2015-16 declaring Nil income. Whereas the assessing officer completed the assessments u/s. 153A by making additions of Rs. 68.69 crores, Rs. 51.01 crores and 4.98 crores for the Asst. Year 2012-13 on a non-existing company. Further Ld. Sr. I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 14 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
Counsel placed on record, the Certificate of Registration of conversion of the assessee company into Limited Liability Partnership Firm with LLP Identification No. AAC-8150 issued by Ministry of Corporate Affairs, ROC, Ahmedabad dated 14-10-2014 and also drawn our attention to the provisions of Section 58 of Limited Liability Partnership Act, 2008 [herein after referred as LLP Act] and corresponding Third Schedule which prescribes the conversion from Private Company into LLP firm. More particularly Clause 6-C namely the effect of registration and the company shall be deemed to be dissolved and removed from the records of ROC.
7.1. Ld. Senior Counsel also relied upon series of judgments on assessment made on non-existing company :
(i) Spice Entertainment Ltd. (2020) 18 SCC 353
(ii) BMA Capfin Ltd. (SC) [2018] 100 taxmann.com 330
(iii) Khurana Engineering Ltd. Vs. DCIT 364 ITR 600 Guj
(iv) Kunvarji Fincorp (P.) Ltd. Vs. DCIT 455 ITR 419 Guj
(v) Anokhi realty (P.) Ltd. vs. ITO 153 TC 275 Guj
(vi) Adani Estate Management P. Ltd. vs. ITO 456 ITR 560 Guj
(vii) Inox Wind Energy Ltd. Vs. ACIT 454 ITR 162 Guj 7.2. Thus Ld. Senior Counsel submitted that the assessing officer erred in passing assessment orders on non-existing entity.
Therefore, the assessments are void ab initio and nullity in the eye of law and the Revenue appeals are liable to be dismissed.
8. We have given our thoughtful consideration and perused the materials available on record including the Paper Books and Case Law compilation filed by both parties. First, we adjudicate the legal ground of jurisdiction of assessment made in this case of I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 15 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
non-existing entity. Undisputedly there were search action u/s.132 of the Act both in the name of the assessee company [Shrimate Infrastructure Pvt. Ltd.] as well as of the LLP Firm [Shrimate Infrastructure LLP.] as can be seen from the copy of the Panchanama filed in Page No. 41 of the Paper Book. It is further seen that the search was conducted on 06-03-2018, on that day the assessee company was not existed since it is converted into LLP Firm with effect from 14-10-2014 itself. This information was very much available with the assessing officer from the Director's Report and Financial Statements of the assessee company which is reproduced by Ld. CIT(A) in his order as follows:
I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 16 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 17 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
8.1. When the LLP Firm also filed the Return of Income in response to the notices issued u/s. 153A of the Act for the Asst.
Years 2012-13 to 2014-15, the Ld A.O. should have continued the assessment in the hands of the LLP Firm and but not in the name of the erstwhile non-existing company M/s.Shrimate Infrastructure Pvt. Ltd. with the PAN No. AAPCS 5841M. It is also on record the present existing LLP Firm M/s. Shrimate Infrastructure LLP is having different PAN No. namely ACRFS 4435J.
8.2. Let us look into the provisions of the Limited Liability Partnership Firm Act, 2008 (hereinafter referred as LLP Act) wherein Chapter X deals with conversion into Limited Liability Partnership. Section 56 deals with conversion from Private Company into Limited Liability Partnership. Section 58 deals with the legal effect of conversion and consequential registration as follows:
"58. Registration and effect of conversion.
(1) The Registrar, on satisfying that a firm, private company or an unlisted public company, as the case may be, has complied with the provisions of the Second Schedule, the Third Schedule or the Fourth Schedule, as the case may be, shall, subject to the provisions of this Act and the rules made thereunder, register the documents submitted under such Schedule and issue a certificate of registration in such form as the Registrar may determine stating that the limited liability partnership is, on and from the date specified in the certificate, registered under this Act Provided that the limited liability partnership shall, within fifteen days of the date of registration, inform the concerned Registrar of Firms or Registrar of Companies, as the case may be, with which it was registered under the provisions of the Indian Partnership Act, 1932 (9 of 1932) or [the Companies Act, 2013 (18 of 2013)) as the case may be, about the I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 18 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
conversion and of the particulars of the limited liability partnership in such form and manner as may be prescribed.
(2) Upon such conversion, the partners of the firm, the shareholders of private company or unlisted public company, as the case may be, the limited liability partnership to which such firm or such company has converted, and the partners of the limited liability partnership shall be bound by the provisions of the Second Schedule, the Third Schedule or the Fourth Schedule, as the case may be, applicable to them.
(3) Upon such conversion, on and from the date of certificate of registration, the effects of the conversion shall be such as specified in the Second Schedule, the Third Schedule or the Fourth Schedule, as the case may be.
(4) Notwithstanding anything contained in any other law for the time being in force, on and from the date of registration specified in the certificate of registration issued under the Second Schedule, the Third Schedule or the Fourth Schedule, as the case may be,-
(a) there shall be a limited liability partnership by the name specified in the certificate of registration registered under this Act;
(b) all tangible (movable or immovable) and intangible property vested in the firm or the company, as the case may be, all assets, interests, rights, privileges, liabilities, obligations relating to the firm or the company, as the case may be, and the whole of the undertaking of the firm or the company, as the case may be, shall be transferred to and shall vest in the limited liability partnership without further assurance, act or deed; and
(c) the firm or the company, as the case may be, shall be deemed to be dissolved and removed from the records of the Registrar of Firms or Registrar of Companies, as the case may be."
8.3. As per Clause (c) of Section 58(4) of LLP Act, a company which is converted into LLP shall be deemed to be dissolved and removed from the records of ROC. Therefore, in our considered view, the assessing officer is not correct in making assessment on non-existing entity for the Asst. Years 2012-13 to 2014-15. I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 19 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
8.4. One more argument of the Revenue that since the assessee participated in the assessment proceedings, filed returns of income and submissions, therefore assessment framed in the name of the erstwhile company cannot be held to be invalid. We are unable to accept this contention of the Revenue. It is a settled position of law that jurisdiction to assess must exist on the date of issuance of notice and framing of assessment. Jurisdiction is conferred by statute and cannot be created by consent, acquiescence or participation of the assessee. In the present case, it is an undisputed fact that the assessee company stood converted into a Limited Liability Partnership with effect from 14.10.2014 and by virtue of section 58(4)(c) of the LLP Act, 2008, the company stood dissolved and removed from the records of the Registrar of Companies. Consequently, on the date of search and issuance of notices u/s.153A and passing of assessment orders, the assessee company was a non-existent entity. The Hon'ble Supreme Court in the case of Maruti Suzuki India Ltd. has categorically held that once an entity ceases to exist, any notice issued or assessment framed in its name is void ab initio and that participation in the proceedings does not operate as an estoppel against law. The Apex Court further held that such a defect is jurisdictional in nature and cannot be cured by section 292B of the Act.
8.5. Another contention of the Revenue that the successor entity inherited the assets and liabilities of the erstwhile company is also misconceived. While liabilities may devolve upon the successor, jurisdiction to assess must still be exercised in the name of a legally existing person. Assessment of a non-existent entity strikes I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 20 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
at the very root of the authority of the Assessing Officer. It is undisputed fact that the Assessing Officer was fully aware of the conversion, as the same was disclosed in the financial statements, Director's report and special audit report. Despite such knowledge, the Assessing Officer proceeded to frame assessment in the name and PAN of a non-existent company. Such an assessment is a nullity in the eyes of law.
8.6. In view of the above and respectfully following the binding judgment of the Hon'ble Supreme Court and the consistent view taken by the jurisdictional High Court, we hold that participation by the assessee in the assessment proceedings does not and cannot cure the inherent lack of jurisdiction.
9. Ld Senior Counsel also relied on a recent judgement of the Bombay High Court in the case M/s. Erangal Comtrade and Consultancy LLP -Vs- ACIT reported in [2025] 180 Taxmann.com 449 [Bmy] where it was held that the assessee-company had been converted into an LLP and thereby ceased to exist, any reassessment notice issued u/s.148 in the name of such non- existent entity was invalid, void-ab-initio and liable to be quashed by observing as follows:
"Section 68, read with section 147, of the Income-tax Act, 1961 - Cash Credit (Reassessment) - Assessment year 2017-18 - Assessee-company was converted into an LLP and thereafter ceased to exist - For relevant assessment year, assessee-LLP filed its return declaring interest income from Fixed Deposits that had vested in it upon conversion and assessment was completed under section 143(3), taxing interest income but denying TDS credit since tax was deducted under PAN of erstwhile company - Assessee-LLP filed a rectification application and an appeal, both I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 21 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
pending - Despite full disclosure during scrutiny, Assessing Officer issued notice under section 148 in name of non-existent erstwhile company, alleging escapement of income relating to Fixed Deposits and interest - Assessee-LLP objected, pointing out that company no longer existed and that income was already assessed However, reassessment was completed against non-existent company, treating Fixed Deposits as unexplained investment and raising corresponding demand - It was noted that issue regarding invalidity of a notice issued to a non-existent entity was no longer res integra and was covered by decision of Supreme Court in case of Pr. CIT v. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375 (SC) wherein it was held that once a company ceases to exist due to amalgamation, any notice issued in its name is invalid and participation in proceedings cannot cure this legal defect - Whether considering law laid down as above, notice issued under section 148 to erstwhile company, could not be allowed to stand and was hereby quashed and set aside [In favour of assessee]"
9.1. We find that the issue regarding the invalidity of a notice issued to a non-existent entity is no longer res-integra and is settled by the judgement of the Hon'ble Supreme Court in the case of Maruti Suzuki India Ltd. wherein the Apex Court after considering the law on the subject held as under:
"...36. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a coordinate Bench of two learned Judges which dismissed the appeal of the Revenue in Spice Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353] on 2-11- 2017. The decision in Spice Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353] has been followed in the case of the respondent while dismissing the special leave petition I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 22 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353].
37. We find no reason to take a different view. There is a value which the Court must abide by in promoting the interest of certainty in tax litigation. The view which has been taken by this Court in relation to the respondent for AY 2011-2012 must, in our view be adopted in respect of the present appeal which relates to AY 2012-2013. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable."
9.2. The above view of ours is also supported by the judgement of Jurisdictional High Court in the case of Khurana Engineering Ltd. (cited supra) held as follows:
"Assessment proceedings could not be resorted to in case of amalgamated company after date of amalgamation."
9.3. Kunvarji Fincorp (P.) Ltd. (cited supra) held as follows:
"Where a company was amalgamated with petitioner-company, issuance of show-cause notice in name of non-existing entity which was amalgamated with petitioner and lost its existence was without jurisdiction and same was to be quashed."
9.4. Anokhi Reality (P.) Ltd. (cited supra) held as follows:
"Where erstwhile company amalgamated with assessee-company with effect from 1-4-2019 and Assessing Officer was informed of amalgamation scheme on 7-8-2019, notices under section 148 having been issued to erstwhile non-existing entity between 29- 3-2021 to 31-3-2021 being bad in law were to be quashed and set aside."
I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 23 DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
9.5. Adani Estate Management P. Ltd. (cited supra) held as follows:
"Where a company was amalgamated with assessee-company and same was intimated to Assessing Officer, reopening notice issued in name of erstwhile company which was amalgamated with assessee-company was to be quashed."
9.6. Inox Wind Energy Ltd. (cited supra) held as follows:
"Where amalgamated company brought facts of amalgamation to notice of Assessing Officer, show cause notice cum draft assessment order issued in name of non-existing company would be void and same could not be said to be a procedural irregularity which could be cured under section 292B."
10. Respectfully following the above judicial precedents and the provisions of law we have no hesitation in quashing the Assessment orders passed for the Asst. Years 2012-13 to 2014- 15 in the name of non-existing company. In the result, the legal ground nos. 8, 10 and 12 raised by the Revenue in IT[SS]A Nos. 191 to 193/Ahd/2021 are devoid of merits and liable to be dismissed. Consequently, the other grounds raised by the Revenue does not require separate adjudication and dismissed.
11. In the combined result the appeals filed by the Revenue in IT[SS]A Nos. 191 to 193/Ahd/2021 are hereby dismissed.
Order pronounced in the open court on 28 -01-2026 Sd/- Sd/-
(NARENDRA PRASAD SINHA) (T.R. SENTHIL KUMAR)
ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER
Ahmedabad :
Dated 28/01/2026
I.T.(SS)A No. 191 to 193/Ahd/2021 A.Ys: 2012-13 to 2014-15 24
DCIT Vs. Shrimate Infrastructure Pvt. Ltd.
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. Assessee
2. Revenue
3. Concerned CIT
4. CIT (A)
5. DR, ITAT, Ahmedabad
6. Guard file.
By order/आदे श से,
उप/सहायक पंजीकार
आयकर अपील य अ धकरण,
अहमदाबाद