Case Law Details
DCIT Vs R.R. Gold Palace (ITAT Bangalore)
Section 153A based on search conducted on the basis of warrant of authorization issued in the name of non-existent entity is invalid
It is a settled position of law by various courts that assessment in the name of non-existing person or a dead person is null and void. The Hon’ble Supreme Court in the case of Principal CIT Vs. Maruti Suzuki Ltd. (2019) 416 ITR 613(SC) clearly held that initiation of assessment proceedings against an entity which had ceased to exist was void-ab-initio. Further, the Hon’ble Delhi High Court in the case of Spice Infotainment Ltd. (supra) had taken similar view where it was held that once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature, which could be cured by invoking the provisions of section 292B of the Act. The framing of an assessment against a non-existing entity/person goes to the root of the matter, which is not a procedural irregularity, but a jurisdictional defect as there cannot be any assessment against a dead person. A similar view has been expressed by the Hon’ble Karnataka High Court in the case of Intel Technology India Pvt. Ltd. (supra), where it was held that framing of an assessment on a non-existing entity or a person is not a procedural irregularity but a jurisdictional defect, which cannot be cured by invoking the provisions of section 292B of the Act. In this case, there is no doubt of whatsoever with regard to the fact that the firm M/s. R.R. Gold Palace was not existent at the time of search and even at the time of framing assessment u/s 143(3) r.w.s. 153A of the Act. The assessee has informed the A.O. the fact of non-existence of the firm by way of a letter dated 14.8.2014 when the A.O. issued notice u/s 153A of the Act in the name of the assessee for filing return of income and opposed issuance of notice on non-existing entity. Further, although the assessee has filed return in response to notice issued u/s 153A of the Act, but such return has been filed under protest in order to comply with statutory provisions of the Act. Therefore, we are of the considered view that the firm was not in existence and was ceased to exist on the date of search and mere holding a PAN does not alter the legal position that the firm was not in existence and accordingly, the assessment framed u/s 143(3) r.w.s. 153A of the Act is void and ab initio. The CIT(A) after considering the relevant facts has rightly quashed assessment order passed by the A.O. as null and void. We do not find any error or infirmity in the order of the CIT(A) and hence, we are inclined to uphold the findings of the CIT(A) and dismiss the appeal filed by the revenue.
FULL TEXT OF THE ITAT JUDGEMENT
These are 3 appeals filed by the revenue and 3 cross objections filed by the assessee are directed against consolidated order passed by the CIT(A)-11 Bengaluru dated 29.12.2017 and pertains to assessment year 200809, 2010-11 & 2011-12. Since, the facts are identical and issues are common, for the sake of convenience these appeals filed by the revenue and cross objections filed by the assessee are being disposed of by this consolidated order.
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