Case Number: ITA 878/DEL/2021
Appellant: Expedia Online Travel Services India Private Limited (as successor in interest for Orbitz India Services Private Limited), New Delhi
Respondent: DCIT, Circle-7(1), Delhi
Assessment Year: 2016-17
Result: Appeal Allowed, Assessment Order Quashed
Case Filed on: 2021-07-20
Order Type: Final Tribunal Order
Date of Order: 2022-10-04
Pronounced on: 2022-10-04
Expedia Online Travel Services India Private Limited, as successor in interest for Orbitz India Services Private Limited, filed an appeal challenging the assessment order passed by the Deputy Commissioner of Income Tax (DCIT) for the assessment year 2016-17. The appeal was filed on the grounds that the assessment order was passed in the name of a non-existent entity, Orbitz India Services Private Limited, which had merged with Expedia Online Travel Services India Private Limited.
Orbitz India Services Private Limited (Orbitz India) filed its return of income for the assessment year 2016-17, declaring a taxable income of INR 3,92,43,670. The case was selected for limited scrutiny, and notices under sections 143(2) and 142(1) of the Income Tax Act, 1961 were issued. The case was referred to the Transfer Pricing Officer (TPO), who proposed a transfer pricing adjustment of INR 3,06,63,521. This adjustment was reduced to INR 1,75,59,032 after the Dispute Resolution Panel (DRP) considered the objections raised by Orbitz India.
The appellant, represented by Sh. K.M. Gupta, Advocate, and Sh. Rishabh Malhotra, AR, contended that the assessment order was invalid as it was passed in the name of a non-existent entity. They argued that Orbitz India had merged with Expedia Online Travel Services India Private Limited, effective from September 1, 2020, pursuant to an order by the National Company Law Tribunal (NCLT). The merger and dissolution of Orbitz India were duly intimated to the jurisdictional Assessing Officer (AO) and the TPO.
The respondent, represented by Sh. Mahesh Shah, CIT(DR), argued that the assessment order was valid and that full information regarding the merger was not provided to the tax authorities.
The Tribunal, comprising Dr. B.R.R. Kumar, Accountant Member, and Sh. Anubhav Sharma, Judicial Member, examined the submissions and the relevant facts of the case. The key observations are as follows:
The Tribunal concluded that the assessment order passed in the name of a non-existent entity, Orbitz India, was null and void ab initio. The Tribunal relied on several judicial precedents, including the Supreme Court’s decision in Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd., which held that an assessment order against a non-existent entity is invalid.
The Tribunal allowed the appeal filed by Expedia Online Travel Services India Private Limited and quashed the assessment order passed by the DCIT.
In conclusion, ITA No. 878/DEL/2021 filed by Expedia Online Travel Services India Private Limited was allowed, and the assessment order passed by the DCIT in the name of a non-existent entity was quashed. This case underscores the importance of proper communication and record-keeping during mergers and the implications of issuing assessment orders against entities that have ceased to exist.
Order pronounced in the open court on 4th October, 2022.
Sd/- (Dr. B.R.R. Kumar)
ACCOUNTANT MEMBER
Sd/- (Anubhav Sharma)
JUDICIAL MEMBER
Date: 4th October, 2022
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR: ITAT
Assistant Registrar, ITAT, New Delhi
Expedia Online Travel Services vs DCIT: Assessment of Non-Existent Entity
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