The Income Tax Appellate Tribunal (ITAT), Delhi Bench while quashing the order passed by the AO held that the draft order framed under Section 144C(1) of the Income Tax Act is in the name of a non-existent company and is, void ab initio, making all subsequent proceedings non-est.
The assessee, BOEING India Pvt. Ltd. is the Regional Director, under section 233 of the Companies Act, notified a merger of BICIPL with the appellant from the effective date.
The effective date means the date on which certified copy of order under section 233 of the Companies Act is filed with the Registrar of Companies. A letter was filed before the Assessing Officer intimating that BICIPL was dissolved and all proceedings be transferred in the name of the appellant i.e. BIPL.
The TPO framed an order under section 92CA(3) of the Act in the name of the amalgamated entity i.e. BIPL i.e. the appellant. However, the Assessing Officer framed a draft assessment order under section 144C of the Act in the name of a non-existent amalgamated company i.e. BICIPL.
Objections were raised before the DRP that the Assessing Officer has framed a draft assessment order in the name of a non-existent entity. Surprisingly, the Assessing Officer filed a remand report before the DRP accepting that the department was aware that the old company has merged into new.
However, the DRP directed the Assessing Officer to rectify the mistake and pass final assessment order in the name of amalgamated company BIPL.
The tribunal consisting of Judicial Member, Suchitra Kamble and Accountant Member, N.K. Billaiya held that the draft order framed under section 144C(1) of the Act is in the name of a non-existent company and accordingly, void ab initio, making all subsequent proceedings non-est.
“We have also perused the TDS certificates, Forms 15CA and 15CB, tax deducted by the assessee and all these documents are part of the paper book. There is no dispute that the assessee has deducted tax at source u/s 192 of the Act. On the given facts of the case, we are of the considered opinion that the provisions of Section 195 of the Act do not apply. Considering the facts of the case in totality, in light of judicial decisions referred to hereinabove, we do not find any merit in the disallowance made by the Assessing Officer/DRP. We, accordingly, direct for deletion of addition of Rs. 56.58 crores,” the tribunal while addressing the grievance said.
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