Eicher International Ltd., New Delhi vs Assessee

Eicher International Ltd., DCIT (Now known as Eicher Motors Circle-11(1) Ltd.), Eicher House, Vs. C.R.Building, 12 Commercial Complex, IP Estate, New Delhi Greater Kailash-II New Delhi PAN:AAACE3882D (Appellant) (Respondent)

ITA No. 2358/Del/2011 (Assessment Year: 2004-05)

DCIT Eicher International Ltd., Circle-11(1) (Now known as Eicher Motors C.R.Building, Vs. Ltd.), Eicher House, IP Estate, New Delhi 12 Commercial Complex, Greater Kailash-II New Delhi PAN:AAACE3882D (Appellant) (Respondent)

Appellant by : Sh. Gaurav Jain, Adv Bhavita, Adv Respondent by : Parwinder Kaur, Sr. Dr Date of Hearing 16.12.2014 Date of pronouncement 04.03.2015

ORDER PER A. T. VARKEY, JUDICIAL MEMBER

These are cross-appeals preferred by the assessee and revenue

against the order of ld CIT(A)-V, New Delhi dated 21.02.2011 for Assessment

Year 2004-05.

2. At the outset the ld AR of the assessee brought to our notice the

additional ground raised, which reads as under:-

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"1.That on the facts and circumstances of the case, assessment order framed under section 143(3) of the Income Tax Act, 1961 ('the Act') is beyond jurisdiction, bad in law and void ab initio. 1.1 That on the facts and circumstances of the case, the assessing officer has erred in framing the assessment on a non-existent entity which was merged with Eicher Goodearth Ltd. w.e.f. 01.04.2005."

3. However, we find that the assessee had infact raised the said legal

ground as an additional ground before the CIT(A) that the assessee

company was non-existent on the date when the assessment order was

passed, so the order against non-existent entity is a nullity. However we find

that the said additional ground was not pressed before the ld CIT(A), who

therefore was pleased not to adjudicate the same.

4. The ld DR vehemently opposed the admission of the said legal ground

by arguing that since the assessee itself has not pressed the said ground

before the ld CIT(A), this ground cannot be raised before us and to buttress

her argument she relied on the following orders:-

1. Central Camera C. (P) Ltd. Vs. The Government of Madras, Equivalent citation (1971) 27 STC 112 (Mad).

2. M.M.Annaiah Vs. Commissioner of Income Tax, Equivalent citation (1970) 76 ITR 582 (Kar)

3. M/s. The co-op Industrial Estates Ltd Vs. Income Tax Officer, ITA No.658/Hyd/2008

5. The issue whether a legal ground can be raised for the first time before

this Tribunal is no longer res-integra. In NTPC Vs CIT (1998) 229 ITR 383, the

Hon'ble Supreme Court has held that question of law raised for the first time

can be adjudicated by the Tribunal. Therefore we admit the legal ground as

to whether the impugned order passed against the non-existent entity is a

nullity or not.

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6. The ld AR contended that the Hon'ble Delhi High Court on 06.07.2006

has passed an order to amalgamate/ merge the assessee company with

Eicher Good Earth Ltd. w.e.f. 01.04.2005, so as per on the settled law on the

issue before us no proceeding could have been taken up in the name of

Eicher International Ltd. on or after the specified dated (i.e. 01.04.2005). On

the other hand the ld DR contended that the said ground was not pressed

before ld CIT(A) so based on the judgments cited supra she prayed that this

ground may be rejected.

6. We have heard both the parties and have perused the records. This

issue raised before us is no longer res-integra. The Hon'ble Delhi High Court in

the case of CIT Vs. Dimension Apparels Pvt. Ltd. in ITA No.327/2014, ITA

328/2014, ITA 329/2014 , ITA 330/2014 and ITA 332/2014 dated 08.07.2014,

concurring with the order of it's own Division Bench in Spice Entertainment

Ltd. Vs. CIT, ITA No.475/2011, wherein the Hon'ble High Court held as follows:-

"15. In Spice (supra), this Court, after discussing the law declared by the Supreme Court in Saraswati Industrial Syndicate (supra) stated that:

"9. The Court referred to its earlier judgment in General Radio and Appliances Co. Ltd. Vs. M.A. Khader (1986) 60 Comp Case 1013. In view of the aforesaid clinching position in law, it is difficult to digest the circuitous route adopted by the Tribunal holding that the assessment was in fact in the name of amalgamated company and there was only a procedural defect.

10. Section 481 of the Companies Act provides for dissolution of the company. The Company Judge in the High Court can order dissolution of a company on the grounds stated therein. The effect of the dissolution is that the company no more survives. The dissolution puts an end to the existence of the company. It is held in M.H. Smith (Plant Hire) Ltd. Vs. D.L. Mainwaring (T/A Inshore), 1986 BCLC 342 (CA) that "once a company is dissolved it becomes a non-existent party and therefore no action can be brought in its name. Thus an insurance company which was subrogated to the rights of another insured company was held Page 4 of 5

not to be entitled to maintain an action in the name of the company after the latter had been dissolved.

11. After the sanction of the scheme on 11th April, 2004, the Spice ceases to exit w.e.f. 1st July, 2003. Even if Spice had filed the returns, it became incumbent upon the Income tax authorities to substitute the successor in place of the said "dead person‟. When notice under Section 143 (2) was sent, the appellant/amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of the appellant on record. Instead, the Assessing Officer made the assessment in the name of M/s Spice which was non existing entity on that day. In such proceedings and assessment order passed in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect. Mere participation by the appellant would be of no effect as there is no estoppel against law."

16. The authority of the above precedent binds us; we see no reason to differ from the logic and reasoning in Spice (supra)."

7. In the instant case, also we find that the assessee, viz Eicher

International Limited was incorporated under the Companies Act, 1956 on

09.03.1994. vide scheme of amalgamation u/s 391 to 394 of the Companies

Act, 1956, the assessee merged with Eicher Goodearth Ltd. vide order of the

Delhi High Court, dated 06.07.2006, with effect from the appointed date viz

1st April, 2005. And in terms of the said order, a certified copy of the order of

the Hon'ble Delhi High Court was filed with the Registrar of Companies on

08.08.2006. the copy of the order of the Delhi High Court was accordingly

taken on record by the Registrar of Companies.

9. In the aforesaid scenario the assessee was not an existing legal entity

w.e.f 1st April 2005 when the assessment order was passed by the AO on

31.10.2006, so the assessment order is a nullity in the eyes of law and so is

void. Therefore we quash the impugned order passed by the AO on

31.102006 and so the additional ground raised by the assessee is thus

allowed.

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10. Since we have quashed the assessment proceedings we are not

inclined to adjudicate other grounds raised by the assessee and the revenue

being academic.

11. In the result the appeal of the assessee is allowed and revenue is

dismissed.

Order pronounced in the open court on 04.03.2015.

-Sd/- -Sd/- (S.V.MEHTORA) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 04/03/2015 *A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi