Whether the assessee can challenge the validity of an assessment order during the appellate proceedings pertaining to examination of validity of order passed u/s 263?
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “G”, MUMBAI
BEFORE SHRI AMIT SHUKLA (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACOUNTANT MEMBER)
I.T.A. No. (Assessment Year: 2011-12)
M/s Westlife Development Ltd Vs Principal Commissioner of (Successor to Wespoint Leisureparks Income-tax-5 Ltd) Mumbai 1001, 10h Floor, Tower-3, Indiabulls Finance Centre, Senpati Bapat Marg, Elphinstone Road, Mumbai-13 PAN :AACD0528K (Appellant) (Respondent) Appellant by S/S Vijay Mehta and Govind Jhaveri Respondent by Shri Goli Srinivasa Rao, CIT-DR
Per ASHWANI TANEJA, AM:
This appeal has been filed by the assessee against the order of Ld. Principal Commissioner of Income Tax-5, Mumbai (hereinafter called as CIT) passed u/s 263 dated 22-12-2015 for A.Y. 2011-12on the following grounds:
“1.(a) On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax [CIT] erred in initiating proceedings u/s.263 of the
Income Tax Act, 1961
(the Act) vide show-cause notice dated 20-04-2015 and passing an order u/s. 263 of the Act as the reasons assigned by him for doing so are wrong and contrary to the facts of the case, the provisions of the Act, and the Rules made thereunder.
(b) On the facts and in the circumstances of the case and in law, the appellant prays that the order of the learned CIT passed u/s.263 of the Income Tax Act, 1961 may be cancelled being void ab-initio and bad in law.
2. On the facts and in the circumstances of the case and in law, learned Commissioner of Income Tax erred in holding that assessment order dated 24-10-2013 passed by the Assessing Officer u/s 143(3) of the Act with regard to issue of shares at premium was erroneous and prejudicial to the interest of the revenue despite the issues raised having been duly considered by the learned Assessing Officer while framing the assessment u/s 143(3) of the Act.
3. On the facts and in the circumstances of the case and in law, the learned ClT erred in not himself conducting necessary/ proper enquiry and verification of issues mentioned in the notice issued u/s. 263 of the Act and setting aside the assessment order for a de-novo adjudication on issues mentioned therein which is wrong and contrary to the provisions of the Act, and the Rules made thereunder.
4. On the facts and in the circumstances of the case and in law, the learned CIT erred in issuing notice dated 20-04-2015 u/s. 263 of the Act in the name Westpoint Leisureparks Pvt. Ltd, a company which had already become non-existent on the date of issuance of the said notice on account of its merger with the appellant company (Westlife Development Ltd) despite the fact regarding amalgamation been specifically brought to notice of the Income Department vide appellant’s letter dated 03-09-2013. As such, the entire proceedings u/s. 263 are void ab initio, illegal, bad in law and deserve quashed.
2. During the course of hearing, arguments were made by CA Vijay Mehta, on behalf of the assessee and Shri Goli Srinivasa Rao, CIT-DR on behalf of the Revenue.
3. During the course of hearing, he Ld. counsel of the assessee inter-alia stated that in this case the impugned order passed u/s 263 is bad in law on the jurisdictional ground, that is to say that the original assessment order passed u/s 143(3) dated 24-10-2013 which has been sought to be revised by the ld.CIT was a nullity in the eyes of law, and therefore an order, which was a nullity in the eyes of law had no existence in the eyes of law and, therefore, the same could not have been revised by the Ld.CIT, thereby giving fresh life to the proceedings which had no legal existence in the eyes of law. In this regard, it has been further explained by the ld. counsel that the original assessment was framed u/s 143(3) upon an erstwhile company, viz. M/s ‘Westpoint Leisureparks Pvt Ltd’ (hereinafter called WLPL), which had already got amalgamated into another company namely M/s ‘Westlife Development Ltd’ (hereinafter called WDL) and therefore, on the date of framing of the assessment order, WLPL was not in existence. It was further submitted that this fact was brought to the knowledge of the Assessing Officer; despite that, the Assessing Officer framed the assessment upon a non-existing entity. It was submitted by him that framing of an assessment upon a company which has already been amalgamated by way of an order of the High Court is nullity in the eyes of law and in support of his arguments he placed reliance upon the following judgments:
1. Judgment of Delhi High Court in the case of
Spice Infotainment Ltd. Vs. Commissioner of Service Tax
in ITA 475 & 476 of 2011, dated 03.08.2011
2. CIT v. Dimension Apparels P. Ltd. [370 ITR 288 (Del)]
3. I. K. Agencies P. Ltd. v CIT [347 ITR 664 (Cal)]
4. CIT v Express Newspapers Ltd. [40 ITR 38 (Mad)]
5. Judgment of Delhi High Court in the case of
CIT v Micra India P. Ltd. (2015) 57 Taxmann.com 163 (Del)
6. Order of the Tribunal Mumbai Bench, in the case of Instant Holdings Ltd. ACIT in ITA no. 4593, 4748/Mum/2011 order dated 09.03.2016.
7. Order of the Tribunal Kolkata Bench, in the case of Emerald Company Ltd in ITA no. 428/Ko1/2015 order dated 13.01.2016
8. Judgment of Karnataka High Court in the case of
CIT v Intel Techno India P. Ltd. (2015) 57 Taxmann.com 159 (Kar)
9. Order of the Tribunal Kolkata Bench, in the case of Gestener (India) ACIT in ITA no. 275/Ko1/2007 “
4. It was further argued by him that the impugned assessment order was non est in the eyes of law and, therefore, the same could not have been revised by the ld.CIT. In this regard, he relied upon the judgment of Hon’ble Delhi High in
CIT vs Escorts Farms Pvt Ltd 180 ITR 80 (Del)
and upon the decision of the co-ordinate bench in the case of