Suchitra Kamble ORDER
N.K. Billaiya, Member (A)
1. This appeal by the assessee is preferred against the order dated 29.10.2019 framed u/s. 143(3) r.w.s 144C(5) of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'].
2. The first substantive grievance of the assessee is that the Dispute Resolution Panel[DRP] erred in upholding the action of the Assessing Officer in passing draft assessment order in the name of a non-existent company.
3. The other grievance relates to Transfer Pricing adjustment of Rs. 22.16 lakhs on account of outstanding receivables from Associates Enterprises [AEs] and under Corporate Tax, the assessee is aggrieved by the disallowance of Rs. 56,58,19,799/- for alleged failure in deducting tax u/s. 195 of the Act by treating the said payments as Fees for Included Services [FIS].
4. Facts relating to first substantive grievance of the assessee are that on 19.01.2018, the Regional Director, u/s. 233 of the Companies Act, notified a merger of BICIPL with the appellant from the effective date. The effective date means the date on which certified copy of order u/s. 233 of the Companies Act is filed with the Registrar of Companies, which was 15.02.2018. On 10.04.2018, a letter was filed before the Assessing Officer intimating that BICIPL was dissolved and all proceedings be transferred in the name of the appellant i.e. BIPL. On 19.10.2018, the TPO framed an order u/s. 92CA(3) of the Act in the name of the amalgamated entity i.e. BIPL i.e. the appellant. However, on 25.12.2018, the Assessing Officer framed a draft assessment order u/s. 144C of the Act in the name of a non-existent amalgamated company i.e. BICIPL.
5. On 25.01.2019, objections were raised before the DRP that the Assessing Officer has framed draft assessment order in the name of a non-existent entity. Surprisingly, the Assessing Officer filed remand report before the DRP accepting that the department was aware that the old company has merged into new. However, the DRP directed the Assessing Officer to rectify the mistake and pass final assessment order in the name of amalgamated company BIPL.
6. Section 144C(1) of the Act provides that "The Assessing Officer shall forward a draft of the proposed order of assessment to the eligible assessee". Sub-section (15)(b) defines "Eligible Assessee" as "Any person in whose case the variation referred to in sub-section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA of the Act."
7. As mentioned elsewhere, the TPO has framed the order u/s. 92CA(3) of the Act in the name of BIPL, the appellant and as per the definition of "Eligible assessee" BIPL is the eligible assessee. However, the Assessing Officer chose to pass the assessment order in the name of the non-existent company BICIPL, which was dissolved on 15.02.2018.
8. Section 2, sub-section (31) defines "Person" which includes a company. On the date of issuing draft assessment order, the company BICIPL did not exist. ........