Section 170 of the Income-tax Act, 1961 – Succession to business other than on death

Last updated: 24 September 2007

Court :
IN THE ITAT KOLKATA BENCH ‘E’

Brief :
Section 170 of the Income-tax Act, 1961 – Succession to business other than on death - Assessment years 1999-2000 to 2001-02 – Whether amalgamating company is assessable in respect of income up to date of amalgamation- Held, yes - Whether when after amalgamation once amalgamating company is dissolved it does not remain in existence then income up to date amalgamation should be assessed in hands of amalgamated company, i.e., successor company in like manner and to same extent as it would have been assessed in hands of amalgamating company – Held, yes - Whether assessment made in hands of a non-existent company is a nullity and invalid - Held, yes FACTS The assessee-company had merged with a company ‘M’, with effect from 1-7-2000 and the petition for merger had been accepted by the Jurisdictional High Courts. Thereafter the name of the company ‘M’ was changed to ‘S’, with effect from 12-5-2003. For the relevant assessment years, the Assessing Officer made the assessments in the hands of the assessee-company between 29-3-2003 and 26-3-2004. In second appeal before the Tribunal, the assessee raised an additional ground contending that after merger of the assessee-company with the company ‘M’ with effect from 1-7-2000, the assessee-company did not remain in existence, and, therefore, the assessments made in the hands of a non-existent entity were void, ab initio and nullity, and that merely because the assessee-company had filed the returns in its name would not give jurisdiction to the Assessing Officer to make the assessments in the hands of a non-existent entity.

Citation :
Pampasar Distillery Ltd. v. Assistant Commissioner of Income-tax, Circle –5, Kolkata G.D. Agrawal, Vice President And D.K. Tyagi, Judicial Member IT Appeal Nos.227,228,304,558 to 560 and 1672 to 1676 (Kol.) of 2005 [Assessment Year 1994-95 to 2001-2002]