Case Law Details
Brief Facts of the Case
M/s Asian Consolidated Industries Ltd. was engaged in the business of manufacturing of open top sanitary and general line canes. There were two other sister concerns namely M/s Asian Closures Ltd. & M/s Trans Asia Packaging Ltd. The sister concerns M/s Asian Closures Ltd. was amalgamated with M/s Asian Consolidated Industries Ltd. by virtue of an order of the Hon’ble Punjab & Haryana High Court. Thereafter, the effect of the said order was given by the Registrar of Companies. The assessee claimed to have maintained separate books of accounts of both the above said companies for the assessment years 1992-93 to 1996-97 for both the companies and the returns of income were filed separately of both the aforesaid companies.
The another sister concern namely M/s Trans Asia Packaging Ltd. also amalgamated with M/s Asian Consolidated Industries Ltd. by virtue of the order of Hon’ble Punjab & Haryana High Court and the effect of this amalgamation was given by the Registrar of Companies on thereafter. The returns of income for the assessment years 1993-94-1994-95 were filed separately by M/s Trans Asia Packaging Ltd.
However, while completing the various assessments for the assessment years 1992-93 to 1996-97 in the case of M/s Asian Closures Ltd. and for the assessment years 1992-93 to 1994-95 in the case of M/s Trans Asia Packaging Ltd., the department had not taken cognizance of such merger and that set-off the losses and unabsorbed depreciation of the above said amalgamating companies i.e. M/s Asian Consolidated Industries Ltd. and M/s Trans Asia Packaging Ltd. had not been given against the amalgamated company M/s Asian Consolidated Industries Ltd.
Thereafter the amalgamated company M/s Asian Consolidated Industries Ltd. had gone into liquidation by an order of the Hon’ble Punjab & Haryana High Court and subsequent to the order of the Hon’ble High Court for winding up of the company, the liquidator was appointed and all the controls and management of the company was taken over by him. It was further submitted that the management of the company ceased to exist and the premises of the company was sealed. All the plant & machinery, records had been taken possession of by the liquidator on as was, where was basis. In the meantime, the assessee approached the Hon’ble Punjab & Haryana High Court for stay of the demand raised by the AO in the ex-parte order, amounting to Rs. 135 crores.
Question of Law
Whether assessment related to pre-liquidation period cannot be done ex-parte during the period of liquidation without giving reasonable opportunity of being heard to ex-management?
Contention of the Assesse
The assesse submitted that the said company M/s Asian Consolidated Industries Ltd. went into liquidation and the official liquidator was appointed. After the company went into liquidation, the control and management of the company vested with the official liquidator appointed by the Hon’ble Punjab & Haryana High Court at Chandigarh. The said appeal which was filed before CIT (A)-XXX, New Delhi was decided at the back of the assessee company when it was under liquidation.
Since the assessee company was under liquidation and was not served with any notice and even the order was passed, the assessee was prevented by sufficient reasons in not able to contest the appeal which was decided at its back.
That it is by virtue of the order of Hon’ble Punjab & Haryana High Court at Chandigarh dated 08.05.2013, that the ex-management of the assessee company was permitted to contest the orders by which huge demands were created before the appropriate authorities. It is only when permitted by the Hon’ble High Court that the assessee company was able to file its appeal before the Hon’ble ITAT.
It further submitted that the present appeal is being filed in pursuance of the liberty given by the Hon’ble Punjab & Haryana High Court regards to the circumstances and facts relating to inability of the assessee company to appeal earlier.
In view of the above submissions, the assessee submitted that the delay in submitting the present appeal may kindly be condoned as the assessee was prevented by sufficient and reasonable causes. It is prayed that the appeal may kindly be heard and disposed of on merits.
The assesse also requested that the appeals under consideration may be set aside to the AO since the facts for the years under consideration are similar to the facts involved for the assessment year 1996-97 wherein the ld. CIT-I, Delhi while exercising his power u/s 264 of the Income Tax Act, 1961 has set aside the issues to the file of the AO to be decided de-novo after providing due and reasonable opportunity to the assessee.
Contention of the Revenue
The Department Representative although opposed the setting aside of the impugned orders to the AO but could not controvert the factual matrix narrated by the assessee.
Held by the ITAT
It appears that the department passed the ex-parte order during the period of liquidation and the ld. CIT-I, Delhi while deciding the petitions of the assessee u/s 264 of the Act for the assessment years 1996-97 to 2001-02 vide separate orders each set aside the issues to the file of the AO for making assessment de-novo after giving reasonable opportunity of being heard to the assessee.
We, therefore, considering the totality of the facts deem it appropriate to remand all the cases under consideration to the file of the AO to be decided expeditiously afresh, in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
We also direct the assessee to Co-operate and not seek undue or unwarranted adjournments.
