M/S. Mando Automotive India Private Limited,(Company Into Which Mando India Ltd. Wasamalgamated) v. The Deputy Commissioner Of Income-Tax,Corporate Circle 4(1),4[Th] Floor, Main Building

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HON'BLE MR.JUSTICE C.SARAVANAN (Through Video Conferencing) M/s. Mando Automotive India Private Limited,(Company into which Mando India Ltd. wasamalgamated)Represented by its Authorized Signatory,S.Logitha,Plant – II, F 64, SIPCOT Industrial Park,Irrungattukottai,Sriperumbudur – 602 117. Vs. ... Petitioner The Deputy Commissioner of Income-tax,Corporate Circle 4(1),4[th] Floor, Main Building,121, Mahatma Gandhi Road,Chennai – 600 034.... Respondent Writ Petition filed under Article 226 of the Constitutionof India, to issue a Writ of Certiorarifi to call for therecords of the respondent and quash the impugned order inAAACM7698H/13-14 dated 31.12.2016 made under Section 143(3)r.w.s. 92CA(3) of the Income Tax Act, 1961 for the Assessment2013-14. The petitioner is aggrieved by the impugned order dated31.12.2016 passed by the respondent under Section 143(3) readwith Section 92CA(3) of the Income Tax Act, 1961 for theAssessment Year 2013-2014. The impugned order, a draftassessment order passed by the respondent is primarily soughthttps://hcservices.ecourts.gov.in/hcservices/to be challenged on the ground that it has been passed in the name of Mando India Limited which company has sincemerged/amalgamated with the petitioner company in terms of anorder dated 25.06.2013 in Company Petition. Nos.99 and 100 of2013 and had ceased to exist. 2. It is submitted that the said Mando India Ltd hasceased to exist in the eyes of law with effect from 01.3.2013being the effective date in terms of the order dated25.06.2013 of this Court in Company Petition Nos.99 and 100 of2013 and was ordered to be dissolved without being wound. 3. The learned counsel for the petitioner has primaryrelied on the decision of the Hon’ble Supreme Court inPrincipal Commissioner of Income Tax Vs. Maruti Suzuki IndiaLtd, 2019 SCC Online SC 928. He draws my attention toparagraph 33 of the said judgement, wherein, it has been heldthat where an assessing officer was informed about theamalgamating company having ceased to exist as a result of theapproved scheme of amalgamation and where a notice was issuedonly in its name, the basis on which the notice was invokedwas fundamentally at odds with the legal principle that theamalgamating entity ceased to exist upon the approved Schemeof Amalgamation. 4. The Court therefore held that participation in theproceeding by the appellant therein cannot operate as anestoppel against law. The Court concluded that the revenue’sappeal against the decision of the Delhi High Court in SpiceEntertainment Ltd Vs. Commissioner of Service Tax, in ITA 475of 2011 and ITA No. 476 of 2011, Judgement dated 03.08.2011,holds the field in as much as the Special Leave Petition filedby the Income Tax department in Civil Appeal No.285 of 2014along with batch of other cases were dismissed by a commonorder by the Hon’ble Supreme Court in its order dated02.11.2017. 5. The learned counsel for the petitioner further submitsthat after the order amalgamating the noticee company MandoIndia Ltd with the petitioner, the petitioner had not onlyfiled the details with the Registrar of Companies on08.07.2013 but also with the respondent on 20.05.2014 andobtained dated acknowledgement. It is under thesecircumstances, a notice dated 20.08.2015 under Section 143 (2)of the Income Tax Act, 1961 was issued to the Mando IndiaLimited for the Assessment Year 2013-14. 6. It is further submitted that for the subsequentAssessment Year 2014-15, a notice dated 28.08.2015 was issuedby the respondent in the correct name of the petitioner. 7. Further, the learned counsel for the petitionersubmits that a second notice dated 02.11.2016 was addressed tohttps://hcservices.ecourts.gov.in/hcservices/Mando India Ltd. (Merged with Mando Automotive India Private 6. It is further submitted that for the subsequentAssessment Year 2014-15, a notice dated 28.08.2015 was issuedby the respondent in the correct name of the petitioner. 7. Further, the learned counsel for the petitionersubmits that a second notice dated 02.11.2016 was addressed tohttps://hcservices.ecourts.gov.in/hcservices/Mando India Ltd. (Merged with Mando Automotive India Private Limited the petitioner herein), yet the order has been passedin the name of a non-existing company Mando India Ltd. Hetherefore submits that the impugned order passed by therespondent was liable to be quashed. 8. The learned counsel for the petitioner places relianceon the other decisions of the High Court which haveconsistently taken similar views even prior to the decision inSpice Entertainment Ltd Vs. Commissioner of Service Tax, inITA 475 of 2011 and ITA No. 476 of 2011, Judgement dated03.08.2011, which was approved by the Honourable Supreme Courtin Principal Commissioner of Income Tax Vs. Maruti SuzukiIndia Ltd, 2019 SCC Online SC 928. He has filed a typeset ofcase laws and relied on the following decisions:- i.Principal Commissioner of Income Tax Vs. MarutiSuzuki India Ltd., [2019] 107 taxmann.com 375SC.ii.CIT Vs. Spice Enfotainment Ltd., in Civil AppealNo.285 of 2014 (SC).iii.Spice Entertainment Ltd. Vs. Commissioner ofService Tax, in ITA 475 & 476/2011 (HC-NewDelhi).iv.Principal Commissioner of Income Tax Vs. BMACapfin Ltd., [2018] 100 taxmann.com 330 (SC).v.Commissioner of Income Tax-III Vs. DimensionApparels (P.) Ltd., [2015] 370 ITR 288 (HC-NewDelhi)vi.Commissioner of Income Tax (C) -II Vs. MicraIndia (P.) Ltd., [2015] 231Taxman 809 (Delhi).vii.Marshall Sons & Co. (India) Ltd., Vs. IncomeTax Officer, [1997] 223 ITR 809 (SC).viii.KhuranaEngineeringLtd.Vs.DeputyCommissioner of Income Tax, [2014] 364 ITR 600(HC-Gujarat).ix.International Air Transport Association Vs.Deputy Commissioner of Income Tax, [2016] 68taxmann.com 246 (HC-Bombay). x.Assistant Commissioner of Income-tax, MediaCircle-11, Chennai Vs. Vijay Television (P.)Ltd., (2018) TaxCorp (DT) 73784 (HC-MADRAS).xi.eMudhra Ltd. Vs. Assistant Commissioner ofIncome Tax, [2020] 117 taxmann.com 550(Karnataka). 9. Defending the impugned order of the respondent, thelearned counsel for the respondent submits that the petitionerdeliberately mis-led the Income Tax Department by filing areturn on 29.11.2013 in the name of Mando India Ltd which hadalready merged with the petitioner with effect from 01.04.2013and since the system picks the name given in the returns filedelectronically, the impugned order came to be passed in thehttps://hcservices.ecourts.gov.in/hcservices/name of the merged company namely Mando India Ltd. 10. The learned counsel for the respondent furthersubmits that certain income tax refund in the name of themerged company Mando India Ltd was collected by the petitionerusing the PAN Number of the said company despite the saidcompany having merged with the petitioner with effect from01.03.2013. It is therefore submitted that the petitionercannot take advantage of its own mistake and blame therespondent and take contradictory stand one for refund and forquashing the impugned order. 11. It is further submitted that in the proceeding beforethe respondent with the issue of notice under Section 143(2)of the Income Tax Act, 1961, no objection was raised by thepetitioner regarding the jurisdiction even though the noticewas issued in the name of the said Mando India Ltd which hadalready merged with the petitioner company. It is furthersubmitted that though notice dated 20.08.2015 was issued inthe name of the transferred company Mando India Ltd, thepetitioner had no objection. 11. It is further submitted that in the proceeding beforethe respondent with the issue of notice under Section 143(2)of the Income Tax Act, 1961, no objection was raised by thepetitioner regarding the jurisdiction even though the noticewas issued in the name of the said Mando India Ltd which hadalready merged with the petitioner company. It is furthersubmitted that though notice dated 20.08.2015 was issued inthe name of the transferred company Mando India Ltd, thepetitioner had no objection. 12. It is further submitted that prior to passing of theimpugned order, a notice dated 05.09.2014 was issued undersection 143 (2) of the Income Tax Act, 1961 to the mergedcompany Mando India Ltd., and was addressed to M/s. MandoIndia Ltd (merged with Mando Automotive India Private Limitedthe petitioner herein). Finally, the learned counsel for therespondent also submitted that the transfer pricing orderdated 31.12.2016 passed under Section 143(3) read with Section92CA(3) of the Income Tax Act, 1961 was also issued in thename of Mando India Ltd (Merged with Mando Automotive IndiaPrivate Limited). It is therefore submitted that the mistakein not mentioning the name of the petitioner was only atechnical mistake. Even if the impugned draft assessment orderis set aside, the respondent is not precluded from passing afresh order. 13. The learned counsel for the respondent relied uponthe following decisions in support of her submission:- i.Oasys Green Tech (P.) Ltd.Vs. Income TaxOfficer, [2020] 115 taxmann.com 153 (Madras)ii.M/s.Oasys Green Tech Private Limited Vs. IncomeTax Officer, passed by the Division Bench ofthis Court in W.A.Nos.534 & 535 of 2020, dated30.07.2020. 14. I have considered the arguments advanced by thelearned counsel for the petitioner and the learned counsel forthe respondent. I have also perused the case laws filed by thelearned counsel for the petitioner and the learned counsel forthe respondent in support of this case. https://hcservices.ecourts.gov.in/hcservices/ 15. The decision of the Hon’ble Supreme Court inPrincipal Commissioner of Income Tax Vs. Maruti’ Suzuki IndiaLtd., 2019 SCC Online SC 928 which essentially approved thedecision of the Delhi High Court in Spice Entertainment LtdVs. Commissioner of Service Tax, in ITA 475 of 2011 and ITANo. 476 of 2011, Judgement dated 03.08.2011 in view of thedismissal of a batch of appeals filed by the Income TaxDepartment in Civil Appeal No 285 of 2014 and few other casesvide order dated 2.11.2017 has to be applied cautiously. 16. In Spice Entertainment Ltd Vs. Commissioner ofService Tax, in ITA 475 of 2011 and ITA No. 476 of 2011,Judgement dated 03.08.2011, the amalgamating company namelySpice Corp. Ltd. had filed its income tax returns on13.10.2002 prior to merger. The said company stood merged withSpice Enfotainment Ltd by an order dated 11.02.2004.Meanwhile, before the aforesaid order of amalgamation, thereturns filed by the transferor company Spice Corp. Ltd. on30.10.2002 was taken up for scrutiny and a notice dated18.10.2003 was issued in the name of Spice Corp. Ltd. underSection 143(2) of the Income Tax Act, 1961. The fact that thesaid company had merged with Spice Enfotainment Ltd. wasbrought to the notice of the Income Tax Department by thelatter vide its letter dated 02.04.2004. It is under thosecircumstances, the Delhi High Court was of the view that afternotice under Section 143(2) was sent, the transferee companynamely Spice Enfotainment Ltd. had brought the same to theknowledge of the Assessing Officer, yet the officer failed tosubstitute the name of the said company in the record. 17. Similarly, in Maruti Suzuki India Ltd case referredto supra relied by the learned counsel for the petitioner, theamalgamation was ordered on 29.01.2013 with effect from01.04.2012. Already the returns for the relevant AssessmentYear had been filed on 28.11.2012 prior to order ofamalgamation on 29.01.2013 for transferor company. After theamalgamation was ordered, an intimation was given on02.04.2013. Thereafter, case was taken up for scrutinyassessment and notices came to be issued under Section 143(2)of the Income Tax Act, 1961 with the issue of the notice dated26.09.2013 followed by a notice under Section 142(1) of theIncome Tax Act, 1961. Despite such intimation, the noticescontinued to be issued in the name of the company which hadalready ceased to exist. 18. However, the facts of the present case are quitedifferent. Despite the amalgamation with effect from01.04.2013, the returns under Section 139(1) of the Income TaxAct, 1961 was filed by the petitioner in the name of themerged/transferor company, namely, Mando India Ltd, on29.11.2013. Therefore, the reasoning adopted in the Judgementof the Delhi High Court and the reasoning adopted in thedecision of the Hon’ble Supreme Court in Maruti Suzuki IndiaLtd case referred to supra cannot be applied to the facts ofhttps://hcservices.ecourts.gov.in/hcservices/the present case. 19. Since, the transferor company Mando India Ltd. hadmerged with the petitioner Mando Automotive Private Limited(formally Mando India Steering Systems Private Limited) witheffect from 01.04.2013 in terms of the order of amalgamationdated 25.06.2013 in C.P.Nos. 99 and 100 of 2013 and since thereturns under Section 139 of the Income Tax Act, 1961 for theAssessment Year 2013-14 was filed in the name of defuncttransferor Mando India Ltd, it is clear that the petitioner isbound by return filed by its director. Further, from a readingof Section 170 of the Income Tax Act, 1961, it is clear thatthe successor shall be assessed in respect of the income ofthe previous year after the date of succession. Section 170 ofthe Income Tax Act, 1961 reads as under:- Succession to business otherwise than on death.170. (1) Where a person carrying on any businessor profession (such person hereinafter in thissection being referred to as the predecessor)has been succeeded therein by any other person(hereinafter in this section referred to as thesuccessor) who continues to carry on thatbusiness or profession,— (a) the predecessor shall be assessed inrespect of the income of the previous yearin which the succession took place up to thedate of succession;(b) the successor shall be assessed inrespect of the income of the previous yearafter the date of succession. (2) Notwithstanding anything contained in sub-section (1), when the predecessor cannot befound, the assessment of the income of theprevious year in which the succession took placeup to the date of succession and of the previousyear preceding that year shall be made on thesuccessor in like manner and to the same extentas it would have been made on the predecessor,and all the provisions of this Act shall, so faras may be, apply accordingly. (3) When any sum payable under this section inrespect of the income of such business orprofession for the previous year in which thesuccession took place up to the date ofsuccession or for the previous year precedingthat year, assessed on the predecessor, cannotbe recovered from him, the [Assessing] Officershall record a finding to that effect and thesum payable by the predecessor shall thereafterbe payable by and recoverable from thesuccessor, and the successor shall be entitledto recover from the predecessor any sum so paid. https://hcservices.ecourts.gov.in/hcservices/ (3) When any sum payable under this section inrespect of the income of such business orprofession for the previous year in which thesuccession took place up to the date ofsuccession or for the previous year precedingthat year, assessed on the predecessor, cannotbe recovered from him, the [Assessing] Officershall record a finding to that effect and thesum payable by the predecessor shall thereafterbe payable by and recoverable from thesuccessor, and the successor shall be entitledto recover from the predecessor any sum so paid. https://hcservices.ecourts.gov.in/hcservices/ (4) Where any business or profession carried onby a Hindu undivided family is succeeded to, andsimultaneously with the succession or after thesuccession there has been a partition of thejoint family property between the members orgroups of members, the tax due in respect of theincome of the business or profession succeededto, up to the date of succession, shall beassessed and recovered in the manner provided insection 171, but without prejudice to theprovisions of this section. 20. It was incumbent on the part of the petitioner tohave either got the PAN Number altered or surrendered, itshould have filed a composite return in its name in terms ofthe Sanction Scheme of Amalgamation. Further, under Section 2(1B) of the Income Tax Act, 1961, all the properties andliabilities of the amalgamating companies immediately beforethe amalgamation become the liabilities of the amalgamatedcompany by virtue of the amalgamation. Therefore, thepetitioner cannot disown its liability as a successor.Further, it is a paradox for the petitioner to expose thecourse of dead and defunct company in this Writ Petition ifaccording to it the said company does not exist. 21. Further, as per the Sanctioned Scheme ofamalgamation, all tax and liability of the transferor company(Mando India Limited), from the appointed dates, shall, forall purposes, be treated as the tax, cess, duty, liabilitiesor refunds, claims and etc. Further, the Sanction Scheme ofamalgamation mandates the petitioner to file necessaryrevision in the income tax returns also pursuant to provisionsof the Scheme. 22. Clause 7.1 (iii) of the Scheme of Amalgamationspecially covers the situation. Therefore, it was theresponsibility of the petitioner to file appropriate returnson behalf of the transferor as that of its. Clause 7.1 (iii)of the said Scheme is re-produced below:- 7. CONDUCT OF BUSINESS UNTIL EFFECTIVE DATE 7.1 With effect from the Appointed Date and upto and including the Effective Date (i) ............. (ii) ............. (iii) All taxes of any nature, cess, duties,direct and/or indirect, paid or payable by oron behalf of the Transferor Company from theAppointed Date onwards including all or anyrefunds and claims, including refunds orclaims pending with any Revenue Authoritiesand including the right to claim credit forhttps://hcservices.ecourts.gov.in/hcservices/minimum alternate tax and carry forward of 7. CONDUCT OF BUSINESS UNTIL EFFECTIVE DATE 7.1 With effect from the Appointed Date and upto and including the Effective Date (i) ............. (ii) ............. (iii) All taxes of any nature, cess, duties,direct and/or indirect, paid or payable by oron behalf of the Transferor Company from theAppointed Date onwards including all or anyrefunds and claims, including refunds orclaims pending with any Revenue Authoritiesand including the right to claim credit forhttps://hcservices.ecourts.gov.in/hcservices/minimum alternate tax and carry forward of accumulated losses, shall, for all purposes,be treated as the tax, cess, duty, liabilitiesor refunds, claims, accumulated losses andcredits pertaining to indirect taxes such asCenvat credit, VAT credit etc of theTransferee Company. Accordingly, upon theScheme becoming effective, the TransfereeCompany is expressly permitted to revise, ifit becomes necessary, its Income tax returns,Sales tax returns, Excise & Cenvat returns,service tax returns, other tax returns, and toclaim refunds / credits, pursuant to theprovisions of this Scheme. The TransfereeCompany is also expressly permitted to revise,if it becomes necessary, its income taxreturns and related TDS Certificates,including TDS Certificates relating totransactions between or amongst the TransferorCompany and the Transferee Company, and toclaim refunds, advance tax and withholding taxcredits, benefit of credit for minimumalternate tax and carry forward of accumulatedlosses etc., pursuant to the provisions ofthis Scheme. 23. Further, the Scheme of Amalgamation in Clause 7.1(iv) indicates that the tax deducted at source (TDS)/advancetax/minimum alternate tax, if any, paid by the TransferorCompany under the Income Tax Act, 1961 or any other statue inrespect of income of the Transferor Company assessable for theperiod commencing from Appointed Date shall be deemed to bethe tax deducted from/advance tax paid by the TransfereeCompany and credit for such TDS/advance tax/minimum alternatetax shall be allowed to the Transferee Company notwithstandingthat certificates or challans for TDS/advance tax are in thename of the Transferor Company and not in the name of theTransferee Company. Clause 7.1 (iv) of the said Scheme isreproduced below:- 7. CONDUCT OF BUSINESS UNTIL EFFECTIVE DATE7.1 With effect from the Appointed Date and upto and including the Effective Date(i) ............. (iv) The tax deducted at source (TDS)/advancetax/minimum alternate tax, if any, paid by theTransferor Company under the Income Tax Act,1961 or any other statue in respect of incomeof the Transferor Company assessable for theperiod commencing from Appointed Date shall bedeemed to be the tax deducted from/advance taxpaid by the Transferee Company and credit forhttps://hcservices.ecourts.gov.in/hcservices/such TDS/advance tax/minimum alternate tax shall be allowed to the Transferee Companynotwithstanding that certificates or challansfor TDS/advance tax are in the name of theTransferor Company and not in the name of theTransferee Company. 24. Further, the Clause 7.3 of the Scheme of Amalgamationalso mandates that the petitioner was entitled, pending of thesanction of the Scheme, to apply to the Central Government andall other agencies, department and authorities concerned asare necessary under any law for such consents, approvals andsanctions which the petitioner may require to carry on thebusiness of the said Mando India Limited. shall be allowed to the Transferee Companynotwithstanding that certificates or challansfor TDS/advance tax are in the name of theTransferor Company and not in the name of theTransferee Company. 24. Further, the Clause 7.3 of the Scheme of Amalgamationalso mandates that the petitioner was entitled, pending of thesanction of the Scheme, to apply to the Central Government andall other agencies, department and authorities concerned asare necessary under any law for such consents, approvals andsanctions which the petitioner may require to carry on thebusiness of the said Mando India Limited. 25. Further, Clause 9.5 of the Scheme of Amalgamationalso clearly makes it clear that all the statutoryregistration certificates, permits, approvals, permission,incentives, tenancy rights and etc. held or availed by theTransferor Company (Mando India Limited) was to be changedand/or to be deemed to have been available to the petitionerin the substituted name respectively and the same may bevalid, effective and enforceable on the same terms andconditions to the extent permissible under law and it shallnot be necessary to obtain the consent of any third party orother person who is a party to any contract or arrangement. 26. Thus, it is abundantly clear that the petitioner hadtaken over all the assets and liabilities of the said MandoIndia Limited. The petitioner should have filed in its taxreturn a composite tax return including the return for theAssessment Year 2013-2014 of the said Mando India Limited.Instead, the petitioner deliberately filed return in the nameof the transferor company (Mando India Company) on 29.11.2013which had already ceased to exist with effect from 01.03.2013. 27. Further, as per Section 139A(5) of the Income TaxAct, every person shall quote the Permanent Account Number(PAN) in all his returns or in any correspondence with theincome-tax department. Thus, the petitioner deliberatelymislead the Income Tax Department by assuming that it can filereturns with the Permanent Account Number (PAN) of a defuncttransferor company with the view to take undue advantage ofcertain lines of decision to force the Income Tax Departmentto commit such mistake. Permanent Account Number (PAN)signifies the identity of an assessee under the Income TaxAct, 1961 for assessment. Therefore, I do not find any meritsin the submission of the learned counsel for the petitioner.28. In my view, the petitioner played a trick on theIncome Tax Department to hoodwink its liability. Since thereturn was filed by the petitioner in the name of a non-existing company namely Mando India Ltd, the petitioner cannottake advantage of its own mistake and turnaround and statethat the respondent has passed the wrong order in the name ofhttps://hcservices.ecourts.gov.in/hcservices/non-existing company. 29. In my view, ideally, the petitioner should have fileda composite return in its name for the Assessment Year 2013-14together in order to arrive at the tax liability of thepetitioner and that of Mando India Ltd which had since mergedwith the petitioner with effect from 01.03 2013. In any event,the purpose of filing income tax return is only to ascertainthe tax liability which the petitioner has done in a half-hearted manner by filing the return in the name of a non-existing company Mando India Limited on the date of filing ofsuch return. 30. There is also no dispute that the petitioner has notquestioned the exercise taken by the respondent before passingimpugned order and the Transfer Pricing Officer whiledetermining the arm’s-length price and the value of thetransactions with the associated enterprises. Therefore, I donot find any justifiable reasons to interfere with theimpugned order of the respondent in the present Writ Petition.Therefore, this Writ petition is therefore liable to bedismissed. 30. There is also no dispute that the petitioner has notquestioned the exercise taken by the respondent before passingimpugned order and the Transfer Pricing Officer whiledetermining the arm’s-length price and the value of thetransactions with the associated enterprises. Therefore, I donot find any justifiable reasons to interfere with theimpugned order of the respondent in the present Writ Petition.Therefore, this Writ petition is therefore liable to bedismissed. 31. Accordingly, this Writ petition is dismissed. Nocosts. Consequently connected Miscellaneous Petitions are alsoclosed. Sd/- Assistant Registrar//True Copy// Sub Assistant Registrarjen To1. The Deputy Commissioner of Income-tax, Corporate Circle 4(1), 4[th] Floor, Main Building, 121, Mahatma Gandhi Road, Chennai – 600 034. +1cc to Mr.N.V. BALAJI, Advocate, S.R.No.8215+1cc to Mrs.HEMAMURALI KRISHNAN, Advocate, S.R.No.7982 GMI(CO)SM/25/02/2021 Pre- delivery order inW.P.No.2779 of 2017 and W.M.P.Nos.2714 of 2017& 9640 of 2019