The Income Tax Appellate Tribunal, Delhi, ruled that the income tax assessment order against non-existing company is liable to be quashed.
The bench found that the particular aspect of striking off the name of assessee’s companies from the Register of Company was already with the knowledge of the A.O which is reflected in the order passed by the same AO in the Assessment Order passed in the case of M/s BRR Securities Pvt. Ltd. wherein a list of 21 companies have been mentioned. The assessee’s name is appearing at serial No. 5 therein.
Facts
A search action under Section 132 of the Act was carried out in the case of one Shri Anand Kumar Jain and Shri Naresh Kumar Jain (Jain Group) wherein various documents/books of accounts were found and seized on examination of which it revealed that these two persons were engaged in the business of providing accommodation entries to various beneficiaries though the various dummy/paper companies including the assessee’s company controlled and managed by the said Jain brothers to provide accommodation entries to such beneficiaries in lieu of cash received by them after relating the cash money from one company to the other and so on.
Notice under Section 153A/153C was issued directing the assessee to file return within 15 days from the date of receipt of the said notice and finally the assessment proceedings was completed upon making addition against the assessee which was deleted by the CIT(A). However, the ground taken before the tribunal that the assessment order passed by the A.O was finalized on non-existing company though raised before the CIT(A), the same was dismissed.
Conclusion
The tribunal found that this particular aspect of striking off the name of the assessee from ROC was well within the knowledge of the same Assessing Officer which is reflecting from the order passed by him in the case of M/s BRR Securities Pvt. Ltd. which cannot be under any circumstances denied are refuted by the revenue. Thus, once the Assessing Officer under this particular facts and circumstances of the matter finalized the assessment order admittedly against the non-existing company the order becomes void and thus, liable to be quashed.
The bench relying upon the order passed by Coordinate Bench, quashed the order passed by the AO as the same is not sustainable in the eyes of law.
Case Details
Case Name: ACIT V/S M/s Jai Maa Bhawani Overseas Pvt. Ltd.
Citation: ITA Nos.193, 228 & 229/Del/2022
Tribunal: ITAT New Delhi
Coram: Ms. Madhumita Roy, Judicial Member & Shri Avdhesh Kumar Mishra, Accountant Member