New Twist on Assessment on non-existent entity – Its not null and void:  Hyderabad ITAT

 

Most of you would be aware about the rulings whereby it is held that assessment proceedings in case of non-existent entity are held to be null and void. The Hon’ble Apex court have passed judgements having views on either sides of the scales (i.e., Maruti Suzuki ruling – where assessment proceedings are held to be null and void and Mahagun Realtors Ruling – where assessment proceedings are held to be valid) – depending on facts and circumstances of the case.

Recently, the Hon’ble Hyderabad Tribunal in case of Microchip Technology (India) Private Ltd (ITA 509 / Hyd / 2022), have held that where the Permanent Account Number (‘PAN’) is still not surrendered by the amalgamating entity, the proceedings undertaken under the name and PAN of old entity is still valid. Further the tribunal held that where a company exists for some litigation purpose, it also exists for the purpose of tax litigation.

Practically, a lot of taxpayers (amalgamating entities) keep the PAN active maybe due to pending refunds, Assessment / litigation, other processes required by the Income Tax Act. Can a new round of litigation be expected?

The above views are personal and would continue to be a subject of litigation and controversy. .

The copy of the order is as under:

1726054593-fITA-TP-509-HYD-2022 MICROCHIP TECHNOLOGY INDIA PVT. LTD. BENGALURU