M/s. Sony Mobile Communications (India) Private Limited Vs. DCIT (ITAT Delhi)
Assessment framed by AO on a non-existent company is a nullity in the eyes of law and void and the provisions of section 292 B cannot rescue the Income Tax Department: Sony India case
Recently, in Sony Mobile Communications India (P) Ltd. (now merged with Sony India Pvt. Ltd.) vs. DCIT & Sony Mobile Communications India (P) Ltd. (now merged with Sony India Pvt. Ltd.) vs. ACIT [ITA No.554/Del/2015 A.Y.2010-11 and ITA No.836/Del/2014, decided on 06.07.2018], both the appeals filed by the assessee were allowed.
ITA No. 554/Del/2015 (A. Y. 2010-11):
Apart from grounds in the appeal, the Counsel for the assessee made an application under Rule 11 of the ITAT Rules, 1963 seeking admission of the following additional ground of appeal :-
“Ground 16 The assessment order passed under section 143 (3) read with section 144 C of the Act is void ab-initio as the assessment was undertaken in the name of a non-existent entity.”
Facts of the case, in brief, were that the assessee had filed its return of income for the A.Y. on 05.10.2010 declaring an income of Rs.17,07,57,513/-. The assessee company was primarily engaged in the business of importing buying and selling and distributing wide range of mobiles phones in India and providing related post sale support services. Since the assessee had undertaken international transaction with its AEs, the AO referred the matter to the TPO for determination of the ALP of the international transaction entered into by the assessee with its AE. The TPO determined an upward adjustment of Rs.56,30,78,638/- . The assessee approached the DRP who declined to interfere with the transfer pricing adjustment made by the AO. The assessee approached the Tribunal and Tribunal gave some part relief against which the assessee as well as revenue approached the Hon’ble Delhi High Court. The Hon’ble High Court in ITA No. 638/Del/2015 filed by assessee and ITA No. 614/Del/2015 filed by the Revenue vide order dated 28.01.2016 restored the matter to the file of the Tribunal with certain directions.
The Counsel for the assessee submitted that the DRP in the order dated 21.10.2014 has mentioned the name of the appellant as Sony Mobile Communication India Private Limited (Now merged with Sony India Private Ltd). Referring to the order of the TPO he submitted that the TPO vide order dated 27.01.2014 has mentioned the name of the assessee as Sony Mobile Communication India Private Ltd (earlier known as Sony Ericson Mobile Communication (India) Private Ltd ). Referring to the order of the AO dated 22.12.2014 he submitted that the AO has passed the order in the name of Sony Ericson Mobile Communications (India) Private Ltd. He accordingly submitted that even after the order was passed by the DRP mentioning that the company has now merged with Sony India Private Limited, the AO has passed the final order in the old name i.e. a nonexistent company.
Referring to the sequence of events the Counsel for the assessee drew the attention of the Bench to the following dates:
