ITAT: Validity of a Notice issued to an amalgamating company which is no more existent.

Appellant: M/s Siemens Power Engineering Pvt. Ltd. (SPEPL) [now merged with M/s Siemens Ltd.]

Respondent: Assistant Commissioner of Income Tax. 

FACTS:

The assessee raised many grounds of appeal, among which one of them was considered to be very crucial as it goes to the root of the matter as it had strong bearing on adjudication of other grounds raised before ITAT which is as follows:

On facts and in law, the Appellant submits that the impugned assessment order passed by the learned AO is bad in law as Siemens Power Engineering Limited has ceased to exist on the date of the impugned order on account of its merger with Siemens Limited with effect from 1 January 2012, thereby the entire assessment proceedings be regarded to be void ab initio.”

Appellant (M/s Siemens Power Engineering Pvt. Ltd.) got merged with M/s Siemens Ltd. which is the new amalgamated company pursuant to a high court merger order. This scheme of merger was duly approved by Hon’ble Bombay High Court vide its order dated 02/11/2012.  All the assessment orders were issued in the name of amalgamating company which don’t exist anymore.

Various other facts which were not in dispute were also considered like:

a) The order u/s.127 of the Act was passed by the Commissioner of Income Tax, Faridabad on 28/08/2014 transferring the jurisdiction of the case of the assessee (SPEPL) from Gurgaon to Mumbai.

b) We find that the ld. TPO had passed an order for the A.Y.2010-11 in the name of SPEPL on 29/01/2014.

c) We find that the draft assessment order was passed by the ld. AO on 18/02/2014 in the name of SPEPL.

d) We find that the Hon’ble DRP had issued directions to the ld. AO/ld.TPO vide its directions dated 27/11/2014 in the name of SPEPL.

e) We find that the final assessment order pursuant to the directions of the ld. DRP was passed by the ld. AO on 28/01/2015 in the name of SPEPL.

ITAT ORDER:

All the proceedings have been done in the name of Appellant (M/s Siemens Power Engineering Pvt. Ltd.) which is in no more existence. All these facts of merger together with the relevant documents of approval by the Hon’ble High Courts were duly placed before the lower authorities and despite the same, the orders were passed in the name of M/s Siemens Power Engineering Pvt. Ltd., which is a non-existent entity. 

Reliance was placed on Hon’ble Supreme Court in the case of PCIT vs. Maruti Suzuki India Ltd. reported in 416 ITR 613 (SC). The assessment made for the A.Y.2010-11 in the name of a non-existent entity is void ab initio and deserves to be quashed as it is passed in the name of a non-existent entity. Since this ground raised by the assessee on legal issue is decided in favour of the assessee, the adjudication of other grounds becomes infructuous.

CRUX:

Assessment orders issued to an entity that is not in existence shall be void ab initio and thus no proceedings can be initiated against it.