Reopening assessment against merged company quashed as invalid relying on binding Supreme Court precedent on reassessment

Reopening an assessment issued in the name of a company that had ceased to exist due to amalgamation was held invalid because the reassessment targeted a non-existent taxpayer; the tribunal quashed the reassessment immediately on that basis. The tribunal relied on binding precedent requiring that reassessment cannot be sustained where the assessed entity has merged away, and thus no liability can be validly reopened in the name of the dissolved/merged entity; consequence: reassessment set aside and the ground allowed for the assessee.

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Issues: Whether a reassessment order passed in the name of an entity that had ceased to exist due to amalgamation (i.e., in the name of the merged/transferor company) is invalid for want of jurisdiction and liable to be quashed.

Analysis: The facts recorded in the assessment order itself state that the transferor company stood amalgamated into the transferee with effect from a specified date prior to the reassessment order. Despite this recorded amalgamation, the reassessment order was issued in the name of the transferor (non-existent) entity. The jurisdictional character of the objection was raised and admitted as a legal ground for the first time before the Tribunal. The Tribunal applied the principle that an assessment or reassessment issued in the name of a non-existent entity resulting from a merger/amalgamation is a fundamental jurisdictional infirmity. Reliance was placed on controlling precedent establishing that proceedings in the name of a non-existent/merged entity are invalid and must be quashed. Having regard to the recorded amalgamation and the law on jurisdictional defect arising from issuing orders in the name of a non-existent entity, the reassessment order cannot stand.

Conclusion: The reassessment order issued in the name of the non-existent merged entity is quashed; the appeal is allowed in favour of the assessee.

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