Amalgamation and succession: assessments issued in the name of a dissolved entity are substantive illegality and cannot be cured procedurally.

Assessment notices and orders issued in the name of an entity that ceased to exist on amalgamation or winding up constitute substantive illegality rather than mere procedural defect and therefore are not amenable to cure under procedural cure provisions; accordingly the quashing of such assessments was upheld. The Tribunal applied the legal scheme governing amalgamation and distinguished misnomer cases from jurisdictional defects, emphasising that where the assessing officer was aware of dissolution and the record shows proceedings in the name of the dissolved entity, the assessment is void and must be set aside to preserve certainty in tax litigation.

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Issues: Whether an assessment framed and notices issued in the name of an entity that has ceased to exist as a result of amalgamation/winding up are void ab initio or are procedural defects curable under Section 292B; and whether the Appellate Commissioner was correct in quashing assessment orders framed in the name of the dissolved entity.

Analysis: The Tribunal examined the effect of amalgamation and dissolution on the legal identity of the amalgamating company, having regard to Section 170 and the scheme of amalgamation under Section 394 of the Companies Act, 1956. It considered jurisprudence distinguishing cases where the assessment or notice plainly records only a non-existent entity (resulting in a jurisdictional defect) from cases with peculiar facts where material showed the notice/order was clearly intended for the successor (potentially curable under Section 292B). The Tribunal applied the Supreme Court's rulings in Spice Enfotainment and related authorities, and the subsequent affirmations and speaking orders, which treated assessments in the name of an entity that had ceased to exist (despite notice to or participation by the successor) as substantive illegality not amenable to cure under Section 292B. The Tribunal found on the facts that the Assessing Officer was aware of the dissolution/amalgamation (as reflected in the assessment order itself) and that notices and the final order were framed in the name of the dissolved/amalgamating company. The Tribunal further noted the need for consistency and certainty in tax litigation and followed the binding precedents holding such assessments void.

Conclusion: The quashing of the assessment orders was upheld; the Revenue's appeals are dismissed, i.e., the decision is in favour of the assessee.

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