Assessment orders quashed for non-existent entity, Tribunal rules in favor of assessee

The Tribunal quashed the assessment orders for the years 2008-09 and 2009-10 as they were passed in the name of a non-existent entity, Solvay Pharma India Ltd., which had merged with Abbott India Ltd. The Tribunal allowed the appeals filed by the assessee, citing precedents that orders issued to non-existent entities are invalid. Additionally, the Tribunal admitted additional grounds challenging the jurisdiction of the assessment orders, ultimately ruling in favor of the assessee and rendering all other grounds of appeal moot.

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Issues Involved:
1. Validity of the assessment orders passed on a non-existent entity.
2. Admission of additional grounds challenging the jurisdiction of the assessment orders.

Summary:

Issue 1: Validity of the assessment orders passed on a non-existent entity

The assessee, Abbott India Ltd. (formerly Solvay Pharma India Ltd.), challenged the assessment orders for the years 2008-09 and 2009-10 on the grounds that they were passed in the name of a non-existent entity, Solvay Pharma India Ltd., which had merged with Abbott India Ltd. effective from January 1, 2011. The Tribunal found that the fact of amalgamation was communicated to the Assessing Officer (AO) through various correspondences, including letters dated August 10, 2011, and September 19, 2011. Despite this, the assessment orders, as well as the directions from the Dispute Resolution Panel (DRP), were issued in the name of Solvay Pharma India Ltd.

The Tribunal relied on the Supreme Court's decision in Principal Commissioner of Income Tax Versus Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375 (SC), which held that assessment orders passed in the name of a non-existent entity are void. The Tribunal also cited the Bombay High Court's decision in New Age Buildtech (P.) Ltd. V National Faceless Assessment Centre [2023] 151 taxmann.com 66 (Bombay), which reinforced that orders issued to a non-existent entity are invalid.

Issue 2: Admission of additional grounds challenging the jurisdiction of the assessment orders

The assessee filed additional grounds challenging the validity of the final assessment orders under Section 143(3) read with Section 144C(13) of the Income-tax Act, 1961, arguing that they were jurisdictional in nature and did not require any fresh investigation of facts. The Tribunal admitted these additional grounds, referencing the Supreme Court's decisions in National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) and Jute Corporation of India Ltd. v. CIT (1991) 187 ITR 688 (SC), which allow for the admission of new grounds during the pendency of an appeal if they are purely legal in nature.

Conclusion:

The Tribunal quashed the assessment orders for both assessment years 2008-09 and 2009-10, as they were passed in the name of a non-existent entity, Solvay Pharma India Ltd. Consequently, all other grounds of appeal were rendered moot. The appeals filed by the assessee were allowed in full.

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