Commissioner of Income Tax -Ii v. M/S Micron Steels Pvt. Ltd

S. RAVINDRA BHAT, J

R.K.GAUBA, J FEBRUARY 11, 2015 mr

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Decided on: 11th February, 2015 + ITA 19/2014 + ITA 21/2014 + ITA 22/2014 + ITA 23/2014 + ITA 24/2014 COMMISSIONER OF INCOME TAX –II ..... Appellant Through: Mr.Kamal Sawhney, Sr.Standing counsel with Mr.Sanjay Kumar, Jr.Standing counsel. versus M/S MICRON STEELS PVT. LTD. ..... Respondent Through: Mr.Salil Kapoor and Mr.Vikas Jain, Advs. + ITA 20/2014 COMMISSIONER OF INCOME TAX –II ..... Appellant Through: Mr.Kamal Sawhney, Sr.Standing counsel with Mr.Sanjay Kumar, Jr.Standing counsel. versus M/S STEELS PVT. LTD. ..... Respondent Through: Mr.Salil Kapoor and Mr.Vikas Jain, Advs. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K.GAUBA MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) % 1. The Revenue in these appeals claims to be aggrieved by the order of Income Tax Appellate Tribunal (ITAT) dated 19.02.2013. The ITAT had Page 2 affirmed the order of CIT(Appeals) who had set aside the block assessment of M/s Micron Steels Pvt. Ltd. (the original assessee which subsequently amalgamated with M/s Lakhanpal Infrastructure Pvt. Ltd. w.e.f. 01.02.2008 by virtue of an order dated 19.02.2010). The assessment years in question are 2003-04 to 2008-09. 2. The grounds on which the CIT(Appeals) and later the ITAT set aside the assessment was that the assessee had amalgamated with M/s Lakhanpal Infrastructure Pvt. Ltd. and neither was it assessed in the relative periods and that the amalgamation of the original assessee corporate had rendered the assessment framed against it as void. 3. The facts relevant for deciding this appeal are that on 20.10.2008, a search and seizure action was conducted in the cases of B.K.Dhingra, Smt. Poonam Dhingra, M/s Madhusudan Buildcon Pvt. Ltd. and others connected. Based upon the said search, and the materials secured during that proceedings, block assessments were finalized in respect of those assessees. The Assessing Officer (AO) was of the opinion that during the course of the search, materials were seized which belonged to the respondents/assessees and accordingly issued notice to M/s Micron Steels Pvt. Ltd. on 06.07.2010. By that time, M/s Micron Steels Pvt. Ltd. – as noticed at the outset in this judgment – had been amalgamated with M/s Lakhanpal Infrastructure Pvt. Ltd. The assessment was finalized on 31.12.2010 by the AO. In the course of assessment, the various additions were made. This was the subject matter of appeal to the CIT(A). It was urged in the appeal that on account of amalgamation and by operation of Section 170 of the Income Tax Act, the income tax authorities were under a duty, upon receipt of information, to initiate complete proceedings against the transferee company which they had Page 3 not done. This plea was accepted by the CIT(Appeals), who, inter alia, noted that on 19.10.2010 since the AO changed, on account of an administrative order, an intimation was received by the AO on 18.11.2010 stating that M/s Micron Steels Pvt. Ltd. no longer existed on account of the Amalgamation Order dated 19.02.2010. The CIT(Appeals), guided by various previous decisions of this Court, formed the opinion that the contentions of the respondent/assessee was substantial and that the assessment orders as framed, were unsustainable. He, accordingly, set aside the assessment order. 4. The Revenue's appeal was rejected. The ITAT relied upon several judgements including one of the Division Bench of this Court in Spice Entertainment Ltd. vs.Commissioner of Servicer Tax (in ITA No. 475/2011); the ITAT held as follows: 8. We have carefully considered the submission in this regard and perused the records. We fully concur with the finding of the Ld. Commissioner of Income Tax (A) that a company incorporated under the Indian Companies Act is a juristic person. It takes its birth and gets life with incorporation and it dies with the dissolution as per the provision of the Companies Act. On amalgamation, the company ceases to exist in the eyes of the law