Lakshmi Machine Works Ltd. Vs ACIT (ITAT Chennai)
A Dissolved Company Cannot Be Assessed from the Tax Department’s Afterlife: Chennai ITAT Quashes Final Order u/s 143(3) r.w.s. 144C Despite Revenue’s Reliance on Section 292B
ITAT Chennai quashed an assessment framed in the name of an amalgamating company that had ceased to exist, holding the defect to be a substantive jurisdictional illegality not curable under section 292B. ([TaxGuru][1])
Summary: The Chennai ITAT has quashed an assessment framed in the name of an amalgamating company that had ceased to exist, holding that assessment upon a non-existent entity constitutes a substantive jurisdictional illegality & not a curable procedural defect u/s 292B. Following the Supreme Court’s decision in PCIT v. Maruti Suzuki India Ltd. [416 ITR 613], the Tribunal held that the foundational assessment order was void ab initio and, consequently, all subsequent proceedings based upon it could not survive. ([TaxGuru][2])
Background of the assessment
M/s LMW Machinery Ltd., formerly known as Rieter LMW Machinery Ltd., was amalgamated with M/s Lakshmi Machine Works Ltd. under a scheme of amalgamation sanctioned by the Madras High Court in Company Petition No.33 of 2013, by order dated 26.04.2013.
The amalgamation took effect retrospectively from the appointed date of 01.04.2012. Consequently, from that date, the amalgamating company stood dissolved without winding up & its business, assets, liabilities & legal identity vested in the amalgamated company.
