Case Law Details
S.S.S Glass Pvt Ltd Vs ITO (ITAT Delhi)
ITAT Delhi held that reassessment order u/s 147 of the Income Tax Act against a non-existent entity is bad in law and vitiated & nullity.
Facts- AO issued notice u/s. 148 of the Act, on 03.03.2015 and the assessee filed written objection vide dated 27.03.2015 informing AO that the company does not exist on date of issuance of said notice and it has been converted into S.S.S Glass LLP w.e.f 30.1.2015 therefore proceedings against the nonexistent entity may kindly be dropped.
It is contended by the assessee that despite said objection, AO passed impugned reassessment order on 05.08.2015 u/s. 147/143(3) of the Act in the name of S.S.S Glass Pvt. Ltd. which is vitiated and not sustainable.
Conclusion- Held that we reach to a logical conclusion that the conversion of earlier entity i.e. S.S.S Glass Pvt. Ltd. into an LLP had taken place on 30.01.2015 was properly informed to the Assessing Officer by assessee at very first instance raising objection to the issuance of notice u/s. 148 of the Act, against a nonexistent entity and after acknowledging said objection the Assessing Officer proceeded to frame reassessment order on 05.08.2015 by observing in para 2 of assessment order that it is immaterial that the company does not exist as on the date and only for that reason legal proceeding shall not be dropped. These observations are against the ratio of the preposition rendered by Hon’ble jurisdictional High Court in the case of Sony Mobile Communication and earlier judgments of Hon’ble Supreme Court in the cases of Spice Enfotainment and Sky Light Hospitality LLP. Therefore, respectfully following the same the ground of assessee is allowed and notice u/s. 148 of the Act and all consequent proceedings and order including reassessment order u/s. 147/143(3) of the Act are quashed being bad in law and vitiated & nullity.
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