Tata Chemicals Limited Vs JCIT (ITAT Mumbai)
Conclusion: Since the final assessment orders after amalgamation was passed in the name of non-existent company by the AO, the same was bad in law and therefore, set aside.
Held: Assessee was a non-existent company and merged with Tata Chemicals Limited as on 01.04.2000. AO made the assessment after the merger in the name of a non-existent company. It was held the issue was squarely covered by the decision of Hon’ble Supreme Court in the case of PCIT vs. Maruti Suzuki India Limited (SC) in civil appeal No. 5409 of 2019 vide order dated 25 July 2019, wherein the final assessment order was set aside as it was void and ab-initio, having been passed in the name of non-existent company by the AO. Once the assessment framed was bad in law being framed on a non-existent company, the consequent rectification order passed under section 154 would not survive. Hence, the rectification order passed under section 154 was also quashed.
FULL TEXT OF THE ITAT JUDGEMENT
These appeals of the assessee are arising out of the different orders of Commissioner of Income Tax (Appeals)-6, Mumbai in 4/2010-1 1 dated 30.11.2011. The Assessments were framed by the Jt. Commissioner of Income Tax, Range-I Mumbai (in short JCIT/ITO/ AO) for AYs 1996-97 to 1999-2000 vide even dated Nil, 22.02.2000, 29.12.2000, 11.03.2002 under section 143(3) of the Income-tax Act, 1961 (hereinafter ‘the Act’).
In ITAs No. 915-917/Mum/2012, 869-871/Mum/2013
2. At the outset, the learned Counsel for the assessee stated it has raised additional grounds (which are common in all the six appeals for three AY i.e. AY 1996-97, 1997-98 & 1998-99 in regard to assessment farmed under section 143(3) and 154 of the Act) on 05.01.2018 before the ITAT challenging the validity of the assessment order passed by the Additional CIT inter alia on the following grounds: –
“5. On the facts and in the circumstances of the case the assessment order dated 14.10.1998 passed by the Joint Commissioner of Income Tax under section 143(3) is bad in law, illegal and without jurisdiction and / or in excess of jurisdiction on the grounds amongst others, that he failed to establish that the possessed legal and valid jurisdiction under the Act to pass the assessment order and consequently the Hon’ble Tribunal he pleased to quash the said order.
6. The joint Commissioner of Income Tax lacked jurisdiction to pass the order of Assessment under section 143(3) dated 14.10.1998 and to exercise the powers of performing the functions of an Assessing Officer, without establishing that he possessed such jurisdiction conferred on him without establishing that he possessed such jurisdiction conferred on him under section 120(4)(b) of the Act.
Accordingly, in the absence of an order under section 120(4)(b) conferring jurisdiction on the Joint Commissioner of Income Tax the assessment order dated 14.10.1998 passed by him needs to be quashed.
7. The order of Assessment dated 14.10.1998 passed by the Joint Commissioner of Income Tax is without jurisdiction and needs to be quashed as it has been passed in the absence of an Order transferring jurisdiction under section 127 to the Joint Commissioner of Income Tax.”
As the facts and circumstances are common in all three years, hence we will take the facts from AY 1996-97 in ITA No. 869/Mum/2013 and decide the issue.
3. The learned Counsel for the assessee stated that these additional grounds of appeal are raised in all the appeals of assessee i.e. in ITAs No. 915-917/Mum/2012, 869- 871/Mum/2013. The learned Counsel for the assessee stated that he will narrated the facts from AY 1996-97 in assessee’s appeal in ITA No. 869/Mum/2013 and specifically referred to the additional grounds raised i.e. ground No. 5 to 7. He stated that the above additional grounds raised by assessee company are purely legal grounds challenging the validity of the assessment order passed by the Addl. CIT, goes to the very root of the matter and deal with the jurisdiction and authority of the Addl. CIT to pass the assessment order. He stated that these additional grounds do not require any investigation as regards to facts and can be decided on the basis of records available in the assessment proceedings. He placed reliance on the following precedents for admission of the additional grounds: –
“-National Thermal Power Co. Ltd. vs. CIT [229 ITR 383 (SC)]
– Jute Corporation of India Ltd. vs. CIT [187 ITR 688 (SC)]
– CIT vs. S. Nelliappan [66 ITR 722 (SC)]
– Ahmedabad Electricity Co. Ltd vs. CIT [199 ITR 351 (Bom)]
– CIT vs. Pruthvi Brokers & Shareholders (348 ITR 336 (Bom)]
– Ashok Vardhan Birla Vs. CIT [208 ITR 958 (Bom.)]
– Inaroo Vs. CIT (204 ITR 312 (Bom)]
– CIT vs. Govindram Bros. P. Ltd (141 ITR 626 (Bom)]
– Maruti Suzuki Ltd. 397 ITR 681 (Del)”
4. The learned Counsel for the assessee in support of his above argument also stated that on identical set of facts, the ITAT has admitted similar additional grounds in the case of its group concerns in the following cases: –
“Tata Sons Ltd. V. ACIT (2016) 76 taxmann.com 126 (Mum ITAT)
Tata Sons Ltd. V. ACIT (ITA No. 2639/Mum/2009) (Mum ITAT)
Tata Sons Ltd. v. ACIT (ITA No. 5090Mum/2012) (Mum ITAT)
Tata Communication Ltd. Vs. Addl. CIT (ITA Nos. 3972/Mum/2 007 & 1109/Mum/2008) (Mum ITAT)
Tata Communications Ltd. V. Addl. CIT (ITA No. 7071/Mum/2005) (Mum ITAT)
5. He stated that the necessity for raising of additional grounds arose after the decision of Mumbai ITAT in the case of Tata Sons Ltd. Vs. ACIT 76 com 126, wherein exactly identical issues was first dealt with. He has further narrated the facts after filing additional grounds of appeal in ITAT on 05.01.2018 challenging the jurisdiction of the Addl. CIT, who pass the assessment order under consideration. The learned Counsel for the assessee narrated the dates and events in regard to assumption of jurisdiction, which are as under: –
