Kadimi Special Steels Private Limited Vs ACIT (ITAT Delhi)
The Delhi Bench of the ITAT quashed the final assessment orders for assessment years 2017-18 and 2018-19 on the ground that they were passed in the name of a non-existent entity. The Tribunal noted that the assessee company had amalgamated with another company pursuant to an NCLT order effective from 1 April 2020 and that this fact, along with supporting documents, had been duly intimated to the Assessing Officer and the Dispute Resolution Panel well before the final assessment. Despite such intimation, the Transfer Pricing Officer, DRP, and the Assessing Officer continued proceedings and ultimately passed the final assessment order in the name of the amalgamating company, which had ceased to exist. Relying on the Supreme Court’s ruling in Maruti Suzuki, the ITAT held that an assessment framed on a non-existent entity is void ab initio and unsustainable in law. Consequently, the impugned assessment orders were quashed without examining the transfer pricing and other substantive grounds, and the appeals were allowed.
Core Issue: The core issue before the Hon’ble Tribunal was whether a final assessment order passed in the name of an amalgamating company, which had ceased to exist pursuant to an NCLT-approved scheme of amalgamation, is valid in law. The question was purely jurisdictional, going to the very root of the assessment proceedings, namely whether the Assessing Officer could assume and exercise jurisdiction over a non-existent legal entity, despite having been duly informed of the amalgamation.
