ITAT quashes Assessment Order framed u/s 143(3) of Income Tax Act in Name of Non-Existent Entity

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By Aparna. M – On May 18, 2023 9:30 am – 2 mins read

The Income Tax Appellate Tribunal (ITAT) of Ahmedabad bench quashed the assessment order framed under Section 143(3) of Income Tax Act 1961 in the name of non- non-existent entity .

The appeal was filed by the assessee Allscripts (India) LLP. The assessee filed return of income for the impugned assessment year and the assessing officer proposed addition of 16,93,08,987/- to the total income of the assessee by way of adjustment to the arm’s-length price under Section 92CA of the Income Tax Act.

When an objection is filed before the DRP who dismisses the objection filed by the assessee. Against the order the assessee filed an appeal before the tribunal.

Before the bench counsel for the assessee Chandni Shah, submitted that Allscripts India Private Limited (AIPL) was a Private Limited company During Financial Year 2016-17 relevant to assessment year 2017-18, AIPL was converted into Limited Liability Partnership (LLP) on 21 March 2017.

Assessing Officer and the TPO, the Transfer Pricing Order was passed u/s 92CA(3) of the Income Tax  Act by the TPO in the name of AIPL- which was a nonexistent entity.

Therefore the counsel points out that once the order passed by TPO and draft assessment order passed by theAO  have been passed in the name of a non-existent entity, then the subsequent orders passed by DRP and final assessment order are also bad in law.

Sudhendu Das, counsel for the revenue submitted that, DRP order and the final assessment order against which the present appeal has been filed have been passed in the name of the correct entity that is  LLP.

The tribunal observed that  conversion of AIPL into LLP was intimated to both the AO and the TPO much before passing of their respective orders, yet both the TPO and the AO passed the Transfer Pricing Order and the draft assessment order in the name of a nonexistent entity.

Therefore the  members of tribunal comprising Waseem Ahmed, (Accountant Member) and Siddhartha Nautiyal, (Judicial Member) determined that, “Once the draft assessment order and Transfer pricing order itself are bad in law, having been passed in the name of a non-existent entity, then the final assessment order based on the above orders is void ab initio as well.”

Hence the bench allowed the appeal filed by the assessee.To Read the full text of the Order CLICK HERE

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M/s. Allscripts (India) LLP vs National Faceless Assessment Centre


Counsel for Appellant:   Ms. Chandni Shah

Counsel for Respondent:   Shri Sudhendu Das

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