Succession under tax law: reassessment notices in the name of a dissolved predecessor are invalid and quashed.

Notices issued under section 148 and reassessment orders issued in the name of an amalgamating company that ceased to exist are invalid: under section 170 the amalgamated successor succeeds to the business and must be assessed in its name, and issuance of jurisdictional notices or assessments to a non existent predecessor is a substantive illegality rendering such assessments void ab initio. Applying the succession rule and binding precedent leads to quashing reassessment proceedings and orders framed in the name of the dissolved/amalgamated company; relief granted to the successor assessee.

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Issues: Whether notices issued under section 148 of the Income-tax Act, 1961 and consequent reassessment orders passed in the name of an erstwhile company which stood amalgamated and ceased to exist are valid, and whether such reassessment proceedings and assessment orders are to be quashed.

Analysis: Section 170 of the Income-tax Act, 1961 governs succession to a business otherwise than on death and provides that where a predecessor cannot be found the successor is to be assessed in like manner and to the same extent; by amalgamation the amalgamating company ceases to exist and the amalgamated company succeeds to the business. The record shows the amalgamation order was placed on company records and the MCA master data reflected the status as "Amalgamated" prior to issuance of notices dated 27.07.2022. Binding authority establishes that issuance of jurisdictional notices and assessment orders in the name of a non-existent entity is a substantive illegality (referenced precedent of the Hon'ble Supreme Court in Pr. CIT vs. Maruti Suzuki India Ltd. and consistent decisions of coordinate benches and High Court), and assessments made on entities that have ceased to exist are void ab initio. Applying section 170(2) and the cited precedents to the facts, notices issued and reassessment proceedings initiated in the name of the non-existent amalgamating company are invalid.

Conclusion: Notices issued under section 148 of the Income-tax Act, 1961 and the consequent reassessment orders passed in the name of the erstwhile company are invalid and are quashed; decision is in favour of the assessee.

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