This article provides an in-depth analysis of the tax appeal case filed by Honda Cars India Ltd. (a successor in interest of Honda Motor India Pvt. Ltd.) against the Deputy Commissioner of Income Tax (DCIT), Circle-10(1), New Delhi. The case pertains to cash deposits during the demonetization period for the assessment year 2016-17. The appeal was filed on May 27, 2021, and the final order was pronounced on March 23, 2022.
Honda Cars India Ltd. (Honda Cars), a successor in interest of Honda Motor India Pvt. Ltd. (Honda Motor), filed an appeal challenging the final assessment order dated February 12, 2021, passed under section 143(3) read with sections 144C(13) and 144B of the Income-tax Act, 1961. The assessment was for the year 2016-17 and was made in pursuance of the directions of the Dispute Resolution Panel (DRP).
The primary issue in this case was the validity of the assessment order passed by the DCIT, which was challenged on the grounds that it was passed in the name of a non-existent entity, Honda Motor India Pvt. Ltd., which had merged with Honda Cars India Ltd. prior to the passing of the assessment order.
The appellant’s representatives argued the following key points:
The respondent, represented by the Departmental Representative (DR), countered with the following points:
The tribunal, comprising Shri G.S. Pannu, Hon’ble President, and Shri Saktijit Dey, Judicial Member, analyzed the arguments and facts presented by both parties. The key observations and conclusions of the tribunal were:
Based on these observations, the tribunal concluded that the assessment order, having been passed in the name of a non-existent entity, was invalid in the eyes of law. Therefore, the appeal was allowed, and the impugned assessment order was quashed.
As recorded in the final judgment:
“In view of the aforesaid, we quash the impugned assessment order. In view of our decision, hereinabove, various other grounds raised by the assessee, including the grounds on merits, having become academic, are not adjudicated upon. In the result, the appeal is allowed, as indicated above.”
Signed,
(G.S. PANNU)
President
(SAKTIJIT DEY)
Judicial MemberDated: 23rd March, 2022
The judgment in favor of Honda Cars India Ltd. highlights the importance of adhering to the proper legal procedures when dealing with entities undergoing corporate restructuring. It reinforces the principle that orders passed in the name of non-existent entities are invalid and emphasizes the significance of timely updating and communicating changes to relevant authorities to avoid such procedural errors.
Honda Cars India vs DCIT: Demonetization Cash Deposit Case for Assessment Year 2016-17
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