| Headnote |
Income Tax Act, 1961 – ss.143(2), 292B and ss.2(31), 92CA(3), 142(1), 144C (15)(b), 148, 153(1), 153(4), 170(2), 260A – Assessee, joint venture between Suzuki Motor Corporation and Maruti Suzuki India Limited (MSIL) was known as Suzuki Metal India Limited upon incorporation – Subsequently, w.e.f 8 June 2005, its name was changed to Suzuki Powertrain India Limited (SPIL) – On 28 Nov. 2012, the assessee filed its return of income in the name of SPIL declaring income of Rs. 212,51,51,156/- – On 29 Jan. 2013, scheme for amalgamation of SPIL and MSIL was approved by the High Court w.e.f 1 April 2012 – Notices issued u/s.143(2)and 142(1) to the amalgamating company – Draft assessment order was passed in the name of SPIL seeking to increase the total income of the assessee by Rs.78.97 Crores – On 31 Oct. 2016, final assessment order was passed in the name of SPIL – In appeal before ITAT, the assessee objected that the assessment proceedings were continued in the name of the non-existent entity SPIL and the final assessment order issued in the name of non-existent entity was invalid – Final assessment order set aside – Affirmed by the High Court – Held: In the present case, notice u/s.143(2) under which jurisdiction was assumed by the assessing officer was issued to a non-existent company – Assessment order was issued against the amalgamating company – This is substantive illegality and not procedural violation of the nature adverted to in s.292B – Despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name – Basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation – Participation by the amalgamated company would have no effect since there could be no estoppel against law, in view of the judgment of Co-ordinate Bench in Spice Enfotainment case which dismissed the appeal of the Revenue on 2 Nov. 2017 – Decision in Spice Enfotainment case has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-2012 – No reason to take a different view and the same is adopted in respect of the present appeal which relates to AY 2012-13 – Constitution of India – Art.141 – Companies Act, 1956 – s.394 – Estoppel – Doctrine of Merger.Assessee is a joint venture between Suzuki Motor Corporation and Maruti Suzuki India Limited (MSIL). Upon incorporation, the assessee was known as Suzuki Metal India Limited. Subsequently, with effect from 8 June 2005, its name was changed to Suzuki Powertrain India Limited (SPIL). On 28 November 2012, the assessee filed its return of income declaring income of Rs. 212,51,51,156/-. The return of income was filed in the name of SPIL (no amalgamation having taken place on the relevant date). On 29 January 2013, a scheme for amalgamation of SPIL and MSIL was approved by the High Court with effect from 1 April 2012. On 2 April 2013, MSIL intimated the assessing officer of the amalgamation. The case was selected for scrutiny by the issuance of notice under Section 143(2) on 26 September 2013, followed by another notice under Section 142(1) to the amalgamating company. On 11 March 2016, draft assessment order was passed in the name of SPIL (amalgamated with MSIL). The Order sought to increase the total income of the assessee by Rs. 78.97 crores in accordance with the order of the Transfer Pricing Offer in order to ensure that the international transactions with regard to the payment of royalty to the Associated Enterprises is at Arm’s Length. On 12 April 2016, MSIL filed appeal before the Dispute Resolution Panel (DRP) as successor in interest of the erstwhile SPIL, since amalgamated. DRP issued order in the name of MSIL. Final assessment order was passed on 31 October 2016 in the name of SPIL making addition of Rs. 78.97 crores to the total income of the assessee. The assessee filed appeal before the Income Tax Appellate Tribunal. The Tribunal vide order dated 6 April 2017, set aside the final assessment order on the ground that it was void ab initio, having been passed in the name of a non-existent entity by the assessing officer. The order was affirmed in appeal under Section 260A by the High Court. Hence, the present appeal. |
