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I-T - Proceedings validly initiated by Revenue cannot be invalidated on basis of technical flaws in assessment order, if defect was cured by passing corrigendum: ITAT


By TIOL News Service

HYDERABAD, JUNE 14, 2018: THE ISSUE BEFORE THE TRIBUNAL IS - Whether assessment order passed in name of amalgamating company will be rendered invalid, if proceedings are validly initiated in name of merged company and the clerical error was rectified by passing a corrigendum. NO IS THE ANSWER.

Facts of the case:

The assessee company is engaged in providing cell phone services in various circles of India. During the year under consideration, the assessee had paid commissions to agents for selling prepaid SIM cards and recharge coupons, but did not deduct taxes thereon. After examining the information furnished by assessee with regard to TDS payments, the AO was of the opinion that the assessee had to deduct tax u/s 194H and for the failure of assessee to do so, he held the assessee to be an assessee in default u/s 201(1). Accordingly, demand was raised u/s 201(1) and interest was levied u/s 201(1A). On appeal, the FAA confirmed the order of AO.

Tribunal held that,

++ it is stated by the assessee that it was initially known as Vodafone South Ltd., and the same got merged with Vodafone Mobile Services Ltd., as per the scheme of merger approved by the Calcutta, Madras and Delhi and the same was also intimated to the AO and the CIT(A), Hyderabad. It is stated that the AO had issued the notice u/s 201(1) and 201(1A) to the assessee in its correct name, but, the final assessment order was passed in the name of a non-existing company i.e Vodafone South Ltd. It is therefore submitted that the assessment order in the name of non-existing company is not sustainable. On the other hand, the DR submitted that the initiation of proceedings was in the correct name of the assessee only i.e. the merged company and therefore, the proceedings were validly initiated and the mentioning of the name of the non-existing company in the assessment order is only a technical mistake which has subsequently been rectified by the AO, by passing a corrigendum;

++ it is noted that the Supreme Court in a recent case of Skylight Hospitality LLP Vs ACIT - 2018-TIOL-125-SC-IT, has held that the wrong name given in the notice was merely a clerical error which could be corrected u/s 292B. In fact, the AO has passed a corrigendum, correcting the name of assessee and therefore, there is no infirmity in the assessment order.

(See 2018-TIOL-857-ITAT-HYD)