The Income Tax Appellate Tribunal, Delhi bench has held that the proceedings against the amalgamated company after amalgamation cannot be sustainable under the Law and thereby quashed the income tax proceedings against Honda Cars India Ltd.
The assessee claimed before the Tribunal that the Assessing Officer has passed the order in the name of a non-existent entity, viz., ‘Honda Motor India Pvt. Ltd.’ it was submitted that much prior to the passing of the assessment order, ‘Honda Motor India Pvt. Ltd.’ got merged with another entity and was no longer in existence.
A two-member bench consists of Shri G.S. Pannu, Hon’ble President And Shri Saktijit Dey, Judicial Member observed that it is patent and obvious from the name of the assessee and PAN, as mentioned in the final assessment order, for all intent and purpose, the final assessment order has been passed in the name of ‘Honda Motor India Pvt. Ltd.’, the erstwhile entity, which after amalgamation lost its existence.
“The fact that the departmental authorities were conscious of the amalgamation of ‘Honda Motor India Pvt. Ltd.’ with the present assessee, viz., ‘Honda Cars India Ltd.’ from the very initial stage of proceeding before the TPO would be evident from the following observations of the Assessing Officer in the draft assessment order passed under section 143(3) read with section 144C of the Act,” the bench noted.
Quashing the proceedings, the Tribunal held that “in spite of intimation to the TPO and the Assessing Officer regarding the amalgamation of ‘Honda Motor India Pvt. Ltd.’ to ‘Honda Cars India Ltd.’, not only the order under section 92CA(3) of the Act was passed in the name of the amalgamated company, but even the final assessment order was also passed in the name of erstwhile company, viz., ‘Honda Motor India Pvt. Ltd.’ and mentioning its PAN. Thus, there cannot be any manner of doubt that the impugned order has been passed in the name of an entity which after amalgamation was not in existence. That being the factual position, applying the ratio laid down in the judicial precedents cited before us, it has to be held that the final assessment order, having been passed in the name of a nonexistent entity, is invalid in the eyes of law.”
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