Assessment Order cannot be passed in the name of a non existent entity: ITAT Mumbai

 

M/s. Patil Construction and Infrastructure Limited (ITA Nos.303 & 98/Mum/2023)

Facts:

1. The taxpayer M/s. Patil Construction and Infrastructure Limited contested the order validity, that the order has been passed in the matter of a non-existent entity as much as erstwhile company M/s. M.B. Patil Constructions Ltd. has been amalgamated with Patil Constructions and Infrastructure Ltd w.e.f. 01/04/2018 and consequently, the issuance of notice u/s 143(2) of the Income Tax Act and the order passed by the AO is bad in law and deserves to be quashed.

2. Mr. Neelkanth Khandelwal representing the taxpayer furnished that despite this intimation to the ld. AO, notice u/s 143(2) on 23/09/2019 was issued in the name of M.B. Patil Construction Ltd. and on the PAN of the erstwhile company. Further submitted that once intimation was provided to the ld. AO dated 02/08/2018 and again on 23/01/2019, there was no event to issue notice on a non-existing entity and consequently, passing the assessment order (AO) in the matter of erstwhile company which was no more in existence while passing of the order.

ITAT Mumbai held as below:

1. The amalgamating company was not in existence and had been amalgamated much before the beginning of the proceedings, no order could be passed in the name of a nonexistent entity even if the taxpayer had participated in the proceedings or not.

2. If intimation has been given by the taxpayer, AO must not only issue notices in the case of an amalgamated company to pass the order in the name of the existing entity in which the erstwhile company has been amalgamated.

3. The whole assessment order was poor in statute, since the order in the event of the non-existing entity could not be carried at all. Therefore the assessment order has been quashed and the taxpayer’s plea is permitted.

 

The copy of the order as under: