Validity of notices issued in the name of an extinct transferor: such notices are void where amalgamation was intimated.

Where an amalgamating/transferor company has ceased to exist following an approved scheme and filing of statutory form, notices and assessment proceedings issued solely in the name of that non existent entity, after timely intimation and repeated objections by the successor, suffer a jurisdictional defect and are void. The note examines faceless assessment steps-service of Section 142(1) notices, a show cause notice, an assessment order under Section 143(3) read with Section 144B, and consequential demand and penalty notices-concluding that continuation and completion of proceedings in the name of the extinguished transferor was legally impermissible and nullified their operative effect.

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Issues: Whether notices issued under Section 142(1) and the Assessment Order framed under Section 143(3) read with Section 144B, together with consequential demand and penalty notices, are valid where they are issued in the name of an amalgamating/transferor company that had ceased to exist on the date of issuance despite intimation of amalgamation to the tax authorities.

Analysis: The authorities instituted and concluded faceless assessment proceedings, served notices under Section 142(1), issued a show cause notice, passed an assessment order under Section 143(3) read with Section 144B, and issued consequential demand and penalty notices in the name of the transferor/amalgamating company which, pursuant to an NCLT-approved scheme of amalgamation and subsequent filing of Form INC-28, had ceased to exist. The petitioner's communications notifying the amalgamation were placed on record and the petitioner repeatedly objected to continuation of proceedings in the name of the non-existent entity. Relevant legal principles examined include the effect of an approved scheme of amalgamation on the legal existence of the transferor company and the validity of jurisdictional notices framed in the name of an entity that has ceased to exist. Binding and persuasive authorities on the point establish that where an amalgamating entity ceases to exist and the assessing authority is informed of that fact, proceedings and jurisdictional notices issued only in the name of the non-existent entity constitute a jurisdictional defect rendering those proceedings void. Distinguishing authorities where no intimation was given or where proceedings were conducted in the names of both entities, the factual matrix here involves timely intimation and repeated objections by the resultant company, supporting the view that continuation and completion of proceedings in the name of the non-existent transferor company was legally impermissible.

Conclusion: The notices under Section 142(1), the show cause notice, the Assessment Order dated 21.03.2024 under Section 143(3) read with Section 144B, the demand notice under Section 156, and the penalty notice under Section 274 read with Section 270A, all being issued and framed in the name of the amalgamating/transferor company which had ceased to exist, are void and are quashed and set aside; decision is in favour of the assessee.

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