Notice to a non-existent amalgamating company is invalid; consistency in tax litigation also required the earlier view to be followed.

A jurisdictional notice and assessment order issued in the name of an amalgamating company that had already ceased to exist after a sanctioned amalgamation were held to be substantively invalid, because notice to a non-existent entity is not a mere procedural defect. The Delhi HC also applied the principle of consistency in tax litigation and followed the view taken in the assessee's earlier assessment year. Participation in the proceedings did not create estoppel against law. The assessments were therefore unsustainable and the challenge failed.

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Issues: Whether the assessments could be sustained when the jurisdictional notice and assessment order were issued in the name of the amalgamating company which had ceased to exist after the sanctioned scheme of amalgamation.

Analysis: The sanctioned scheme of amalgamation had already been taken note of by the DRP, and the governing principle was that once an amalgamation takes effect, the amalgamating entity ceases to exist in law. A jurisdictional notice issued to a non-existent company is not a mere procedural irregularity but a substantive illegality. The judgment also applied the settled principle of consistency in tax litigation, holding that the view adopted for the assessee for the earlier assessment year had to be followed for the present year as well. Participation in the proceedings did not create any estoppel against law.

Conclusion: The assessments were invalid and the Revenue's challenge failed; the decision was in favour of the assessee.

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