Income Tax Appellate Tribunal - Delhi
Nirvana Lifestyle P.Ltd(Now Merged ... vs Acit, Central Circle-29, New Delhi on 9 March, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI 'SMC' BENCH,
NEW DELHI
BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER
ITA No. 4793/DEL/2017 [A.Y. 2009-10]
Nirvana Lifestyle Pvt. Ltd. Vs. The A.C.I.T
[Now merged with M/s TTJ Impex Central Circle-29
Pvt. Ltd, Plot No. M-7, M-52/53 New Delhi
Ground Floor Gali No. 10, Anand
Parbat Industrial Area
New Delhi
PAN : AACCN 6439 R
[Assessee] [Respondent]
Date of Hearing : 21.02.2018
Date of Pronouncement : 09.03.2018
Assessee by : Shri Ved Jain, Adv
Shri Ashish Chadha, CA
Revenue by : Shri V.K. Jiwani, Sr. DR
ORDER
This is an appeal filed by the assessee against the order dated 5th June, 2016, passed by the CIT(A).
2. The brief facts leading to the present appeal are that the assessee filed its return of income for the A.Y. under consideration on 30th September, 2009. The said return was accepted under Section 143(1). Thereafter, the assessment was reopened by issue of notice 2 ITA No. 4793/DEL/2017 under Section 148 on 10th March, 2016, on the allegation that income has excaped assessment in respect of a sum of Rs. 10,00,000/- received by the assessee during the year from Shalini Holdings Ltd. The AO being not satisfied with the reply of the assessee made addition of Rs. 10,00,000/- in the hands of the assessee vide reassessment order dated 28th December, 2016.
3. Aggrieved by the order of the AO, the assessee filed appeal before the CIT(A). The assessee raised issue on reopening of assessment being bad in law and also on merit. The CIT(A) not being satisfied with the submission of the assessee dismissed the appeal both on the issue of reopening as well as on merit.
4. Aggrieved by the order of the CIT(A), the assessee is in appeal and has raised 10 grounds of appeal. Ground no. 2 is regarding reassessment being framed on a non-existent entity and reads as under:
"(i) On the facts and circumstances o the case, the learned CIT(A) has erred, both on facts and in law, in confirming the order passed by the AO u/s 143(3), despite the fact that the same has been passed in the name of a non-
existent entity.
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(ii) That on the circumstances and facts of the case, the reassessment framed in the name of M/s Nirvana Lifestyle Private Limited which had since amalgamated with M/s TTJ Impex Private Limited and had ceased to exist in the eye of law, was no est."
5. It was submitted by the Ld. AR that the reopening of the assessment and the consequent assessment order passed in the name of the Nirvana Lifestyle Pvt. Ltd. company is bad in law as this company was not in existence on the date of the reopening of the assessment as well as on the date on which the assessment order was passed. In this regard, the Ld. AR invited attention to the order passed by the Hon'ble Delhi High Court dated 26th May, 2014 at PB. Pg. 131- 178 whereby the company namely Nirvana Life Style Pvt Ltd got amalgamated with TTJ Impex Pvt. Ltd.
6. It was submitted that the assessment in question is for the assessment year 2009-10. This assessment was reopened by issue of notice under Section 148 dated 10/03/2016. The notice has been issued in the name of "Nirvana Life Style Pvt. Ltd." as is evident from PB. Pg. 130. The company having got amalgamated with TTJ Impex Pvt. Ltd as on 01/04/2013. The entity Nirvana Life Style Pvt. was not 4 ITA No. 4793/DEL/2017 in existence as on 10/03/2016. On the basis of above, it was submitted that the entire proceedings of issue of notice and reassessment order are bad in law and be quashed. The Ld. AR further submitted that notice under Section 148 has been issued in the name of an non existing company which itself is bad in law as held by the Hon'ble Apex Court in the case of CIT New Delhi Vs M/s Spice Enfotainment Ltd [Civil Appeal No. 285 OF 2014, 286 OF 2014 dated 2-11-2017] where in the Hon'ble court while dismissing the appeal of the revenue has upheld the order of the Delhi High Court.
7. The Ld. DR submitted that the assessee company having received the amount in the year under consideration, the same need to be assessed in the hands of the assessee company only and it does not make any difference if such company has got merged later on and was not in existence as on the date of reopening of the assessment.
8. I have considered the rival submissions. The issue here is validity of reopening of the assessment and the assessment order passed consequent thereof. From the facts, it is clear that notice under Section 148 was issued on 10th March, 2016 in the name of Nirvan Lifestyle Pvt. Ltd. This company was not in existence as on that date 5 ITA No. 4793/DEL/2017 i.e. 10th March, 2016. This company stood merged with TTJ Impex Pvt. Ltd. in terms of order passed by the Hon'ble Delhi High Court on 26th May, 2014. Post this merger, all necessary formalities have been complied with including filing of form no. INC 28 with the Registrar of Companies. Even intimation to this effect was given to the AO vide letter dated 14th September, 2014 and duly received on 19th October, 2014 placed at PB. Pg. 183. Thus, the issue of notice for reopening and consequent assessment thereafter was on a person which was not in existence on that day and hence the proceedings are bad in law and liable to be quashed. This issue is now no more res integra in view of the judgment of the Hon'ble Supreme Court in the case of CIT New Delhi Vs M/s Spice Enfotainment Ltd [Civil Appeal No. 285 OF 2014, 286 OF 2014 dated 2-11-2017] whereby the Hon'ble Supreme Court upholding the order of the Hon'ble Delhi High Court on this issue has held as under:
"12. Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act. Section 292B of the Act reads as under:- "292B. No return of income assessment, notice, summons or other proceedings furnished or made or issue or taken or 6 ITA No. 4793/DEL/2017 purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reasons of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceedings is in substance and effect in conformity with or according to the intent and purpose of this Act."
9. In the present case, it is evident that the assessment order, notice of demand, confirmation and penalty notices are also in the name of the entity which does not exist as on that date. Accordingly, in view of the above settled position of law, I hold that the reassessment proceedings and the assessment order passed in consequence thereto is bad in law and the same is quashed. Since the assessment order itself has been quashed the other grounds raised by the assessee become academic in nature and hence are not been adjudicated upon.
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10. In the result the appeal of the assessee in ITA No. 4793/DEL/2017 is allowed.
The order is pronounced in the open court on 09.03.2018.
Sd/-
[B.P. JAIN] ACCOUNTANT MEMBER Dated: 09th March, 2018 VL/ Copy forwarded to:
1. Assessee
2. Respondent
3. CIT Assistant Registrar
4. CIT(A) ITAT, New Delhi
5. DR