Assessment after amalgamation is not void merely for naming the transferor company when conduct shows continuity of the assessee.

An assessment framed in the name of an amalgamating company is not automatically a nullity merely because the transferor company has ceased to exist. The Court held that the effect of amalgamation must be examined under the amalgamation terms, Section 394(2) of the Companies Act, 1956, Section 2(1A) of the Income-tax Act, 1961, and the surrounding conduct of the assessee. Where the taxpayer continued to hold itself out as the same assessee, filed the return in the transferor's name, participated in the proceedings, and did not clearly disclose the amalgamation at the earliest stage, the assessment could be treated as relatable to the transferee company and remain valid despite the form of the order.

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Issues: Whether, on the special facts of the case, the assessment framed after amalgamation in the name of the transferor company was void, and whether the High Court was right in applying the rule that an assessment on a non-existing entity is a nullity.

Analysis: The amalgamating company had ceased to exist, but the Court held that the consequence of amalgamation cannot be determined by a bare or mechanical application of that fact alone. The effect of Section 394(2) of the Companies Act, 1956, Section 2(1A) of the Income-tax Act, 1961, and the scheme of the Act is that the business and liabilities may continue in the hands of the transferee company. The Court distinguished the earlier line of cases on the basis that, here, the assessee had throughout held itself out as the same assessee, filed the return in the transferor's name, participated in the proceedings, suppressed the fact of amalgamation in the return, and never clearly asserted non-existence at the earliest stage. In these circumstances, the assessment order, though expressed in the name of the transferor company, was treated as one relatable to the transferee company and was not invalid merely because of the form in which it was drawn.

Conclusion: The assessment was not a nullity on the facts of this case, and the Revenue's challenge succeeded to that extent.

Ratio Decidendi: Whether an assessment against an amalgamating company is void must be determined on the terms of the amalgamation and the surrounding facts, and not by an automatic application of corporate non-existence alone.

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