Case Law Details
Motorola Solutions India Pvt. Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi held that assessment order passed in the name of non-existent entity is equivalent to passing an order in the name of dead person, hence, is invalid.
Facts- The assessee submitted that by virtue of an order dated 30th March 2006 passed by the Hon’ble High Court of Punjab & Haryana, M/s. Motorola India Pvt. Ltd., as the then it was, merged with M/s. Motorola Solutions India Pvt Ltd., the present assessee. The amalgamation was made effective from 01.04.2005 and the fact of amalgamation of M/s. Motorola India Electronics Pvt. Ltd. with M/s. Motorola Solutions India Pvt. Ltd. was duly intimated to AO.
It is further submitted that in spite of such intimation to AO that M/s. Motorola India Electronics Pvt Ltd. is no more in existence, still AO proceeded to pass the assessment order in the name of a non-existent entity and hence the assessment order having been passed in the name of non-existent entity is invalid.
Conclusion- Hon’ble Supreme Court in the case of PCIT vs. Maruti Suzuki India Ltd. has held that assessment order passed in the name of a non-existent entity is equivalent to passing an order in the name of dead person, hence, is invalid.
Held that respectfully applying the ratio laid down by the Hon’ble Supreme Court in case of PCIT Vs. Maruti Suzuki India Ltd., we hold that assessment order, having been passed in the name of a non-existent entity, is invalid.
FULL TEXT OF THE ORDER OF ITAT DELHI
Captioned cross-appeals arise out of order dated 20.10.2014 of learned Commissioner of Income Tax (Appeals)-2, Faridabad, pertaining to assessment year 2005-06.
2. Ground no. 1, wherein, the assessee has raised a legal issue challenging the validity of the assessment order reads as under:
“1. The Ld. CIT(A) has erred in directing the Assessing Officer to reduce the expenditure incurred in foreign exchange from the “total turnover” in respect of provisions of section 10A of the IT Act.”
3. Since, the issue raised in this ground is a purely legal and jurisdictional issue going to the root of the matter and can be decided without making fresh investigation into the facts, not only we admit the additional ground, but, at the very outset, we deem it appropriate to address this issue.
4. Before us, Sh. G.C. Srivastava, learned counsel appearing for the assessee submitted that by virtue of an order dated 30th March, 2006 passed by the Hon’ble High Court of Punjab & Haryana, in Company Petition No. 7 of 2006, M/s. Motorola India Pvt. Ltd., as the then it was, merged with M/s. Motorola Solutions India Pvt. Ltd., the present assessee. He submitted, the amalgamation was made effective from 01.04.2005. He submitted, the fact of amalgamation of M/s. Motorola India Electronics Pvt. Ltd. with M/s. Motorola Solutions India Pvt. Ltd. was duly intimated to the Assessing Officer vide letter dated 23rd May, 2006. He submitted, in spite of such intimation to the Assessing Officer that M/s. Motorola India Electronics Pvt. Ltd. is no more in existence, still the Assessing Officer proceeded to pass the assessment order in the name of a non-existent entity. He submitted, the assessment order having been passed in the name of non-existent entity is invalid. In support of such contention, learned counsel relied upon the following decisions:
1. PCIT vs. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375 (SC).
2. Spice Infotainment Ltd. Vs. CIT, Civil Appeal No.285 of 2014 (SC)
3. Learned Departmental Representative submitted, the assessee has filed the return of income in the name of erstwhile company. Hence, the Assessing Officer proceeded to complete the assessment in the said name, as, the assessee did not file any revised return of income mentioning the new name. Though, he could not controvert the fact that the assessee had intimated the fact of amalgamation to the Assessing Officer much prior to the completion of assessment, however, he submitted that passing of the assessment order in the name of erstwhile company is not fatal. In support of such contention, he relied upon the decision of the Hon’ble Supreme Court in case of Principal CIT (Central)-2 Vs. M/s. Mahagun Realtors (P) Ltd., Civil Appeal No. Nil of 2022 (Arising out of Special Leave Petition (C) No.4063 of 2020).
4. We have considered rival submissions and perused the materials on record. The short issue arising for consideration before us is, whether the assessment order having been passed in the name of a non-existent entity is valid. For deciding the issue we have to bear in mind the following crucial dates and events:
30.03.2006 Order passed by Hon’ble High Court of Punjab & Haryana approving the amalgamation of M/s. Motorola India Electronics Pvt. Ltd. with M/s. Motorola Solutions India Pvt. Ltd., w.e.f., 01.04.2005.
23.05.2006 The assessee intimated the Assessing Officer about the amalgamation with all documentary evidences.
29.12.2008 The Assessing Officer passes the assessment order in the old name.
5. From the aforesaid facts, it is very much clear that by the time Assessing Officer passed the assessment order, M/s. Motorola India Electronics Pvt. Ltd. was not in existence, having amalgamated with the present assessee. Thus, in spite of the fact that the Assessing Officer was made aware of the amalgamation as early as on 23rd May, 2006 with all documentary evidences, still, the Assessing Officer proceeded to pass the assessment order in the name of the erstwhile company. In case of PCIT Vs. Maruti Suzuki India Ltd. (supra), Hon’ble Supreme Court has held that assessment order passed in the name of a non-existent entity is equivalent to passing an order in the name of dead person, hence, is invalid. The ratio laid down by the Hon’ble Supreme Court squarely applies to the facts of the present case. However, for the sake of completeness, it is our duty to deal with the decision of the Hon’ble Supreme Court in case of PCIT Vs. M/s. Mahagun Realtors (P) Ltd. (supra) cited by learned Departmental Representative. On a careful reading of the decision cited by learned Departmental Representative, it is very much clear that in the facts of this case, the Hon’ble Supreme court has recorded a categorical finding that at no point of time the assessee intimated the Assessing Officer about the fact of amalgamation and continued to use the old name.
6. Considering the peculiar factual position, the Hon’ble Supreme Court rejected assessee’s challenge to the validity of the order passed in the name of erstwhile entity. However, in the very same case, the Hon’ble Supreme Court has made it clear that the facts involved in case of PCIT Vs. Maruti Suzuki India Ltd. (supra) are different. Thus, in our view, in the facts of the present case, the ratio laid down by the Hon’ble Supreme Court in case of PCIT Vs. Suzuki India Ltd (supra) would squarely apply. Thus, respectfully applying the ratio laid down by the Hon’ble Supreme Court in case of PCIT Vs. Maruti Suzuki India Ltd. (supra), we hold that assessment order, having been passed in the name of a non-existent entity, is invalid. Accordingly, it is quashed. The impugned order of learned Commissioner (Appeals) is hereby set aside.
7. In view of our decision above, Revenue’s appeal in ITA No.60/Del/2015, having become infructuous, is dismissed.
8. In the result, assessee’s appeal is allowed, whereas, Revenue’s appeal is dismissed.
Order pronounced in the open court on 30th November, 2022
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