Assessment on a non-existent amalgamating company is a jurisdictional defect and renders the order void ab initio

Assessment framed under section 143(3) in the name of an amalgamating company that had ceased to exist after amalgamation was held void ab initio, because once the merger took effect the amalgamating entity lost its legal identity and the defect was jurisdictional, not merely procedural. The Tribunal also admitted the additional ground since the relevant facts were already on record and no fresh inquiry was needed. As a result, the assessment order was quashed, and the challenge to the addition under section 56(2)(viib) was left academic and not adjudicated.

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Issues: Whether the assessment framed under section 143(3) of the Income-tax Act, 1961 in the name of an amalgamating company that had ceased to exist after amalgamation was valid.

Analysis: The record showed that the amalgamation had taken effect before the assessment order was passed and that the Revenue had been informed of the merger. On these admitted facts, the assessment was made in the name of a non-existent entity. The admitted legal position is that once amalgamation takes effect, the amalgamating company loses its identity in law, and any assessment framed thereafter in its name is not a mere irregularity but a jurisdictional defect. The Tribunal also held that the additional ground could be admitted because the relevant facts were already on record and no fresh inquiry was required.

Conclusion: The assessment order was void ab initio and was quashed. The additional ground was allowed, and the challenge to the addition under section 56(2)(viib) was not adjudicated as it had become academic.

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