ITAT Declares Assessment Void Due to Non-Existent Entity

Rahil Marketing Pvt. Ltd. Vs DCIT (ITAT Ahmedabad)

Introduction: In a landmark decision, the Income Tax Appellate Tribunal (ITAT) Ahmedabad has declared an assessment order void due to being passed in the name of a non-existent entity. The case, Rahil Marketing Pvt. Ltd. Vs DCIT, pertained to an assessment order issued after the Assessee, Rahil Marketing Pvt. Ltd., had amalgamated with Adella Enterprise Pvt. Ltd. The ITAT’s decision underscores the importance of accurate assessment in the eyes of the law.

Detailed Analysis: The Assessee, Rahil Marketing Pvt. Ltd., filed an appeal against the order issued by the Ld. Commissioner of Income Tax (Appeals)-7, Ahmedabad, for the Assessment Year 2014-15. The Assessee raised several grounds of appeal, but a key contention was the validity of the assessment order, as it had been framed in the name of a non-existent entity. Rahil Marketing Pvt. Ltd. had already amalgamated with Adella Enterprise Pvt. Ltd. under a court-approved scheme.

The Assessee argued that the assessment order should be declared void ab initio, given that it was issued in the name of a non-existent entity. The Assessee had filed an intimation on June 10, 2015, requesting the cancellation of its Permanent Account Number (PAN) and notifying the amalgamation with Adella Enterprise Pvt. Ltd. The court order approving the merger was also submitted to the tax department. Notably, the assessment order was issued on October 10, 2016, which was after the amalgamation and the notification to the tax authorities.

In response, the Ld. Departmental Representative argued that the letter submitted by the Assessee regarding the amalgamation was never presented to the Assessing Officer during the assessment proceedings. Furthermore, the appeal form filed with the Ld. CIT (Appeals) still mentioned Rahil Marketing Pvt. Ltd. as the Assessee, and the fact of amalgamation was not raised as a contention during the CIT (Appeals) proceedings. Therefore, the assessment order, in the Ld. Departmental Representative’s view, should not be considered void ab initio.

Please become a Premium member. If you are already a Premium member, login here to access the full content.