The Tribunal noted that Genpact India was amalgamated into Genpact India Pvt Ltd form April 30, 2016 following approval received from the High Court of Telangana and Andhra Pradesh.
The Delhi bench of income tax tribunal (ITAT) held that the assessment order that added an income of Rs 2,600 crore to Genpact India was to be considered invalid from the outset as the order was made in the name of the company that existed before its amalgamation. This company had ceased to exist at the time assessment was conducted as well as on the date of passing the order by the assessing officer.
The Tribunal noted that Genpact India was amalgamated into Genpact India Pvt Ltd form April 30, 2016 following approval received from the High Court of Telangana and Andhra Pradesh. “There is no need to give any finding relating to the other issues as the assessment order itself is void ab initio,” the tribunal said in its order.
The order concluded that the assessing officer was aware that the amalgamating company Genpact India was no longer in existence, and the fact was clear from the letter the company wrote addressing Member (IT), CBDT with a copy to the assessing official.
The income-tax department sought the assistance of section 292B of the Income Tax Act, which is relied upon to rectify any procedural irregularity as long as the intent and purpose are in accordance with the law. However, the Tribunal rejected the move saying that once it became clear that the assessment was framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured under the said section.
“This order once again underscores the principle that following prescribed provisions of the law are equally important for the tax authorities, as they are for the taxpayers. If an order is passed or demand is raised without following the due process or applicable provisions, then irrespective of merits of the case or quantum of tax demand involved, the order or demand can be quashed on technical reasons,” Shailesh Kumar, partner at Nangia & Co said.