https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=764848 https://www.taxtmi.com/caselaws?id=764848 Rectification of mistake - order being framed in the name of a non-existent entity/entity merged - inadvertent mistake committed by the TPO as well as AO in not mentioning the name of the entity correctly - respondent-assessee, M/s Vedanta Limited [Vedanta] is the resultant entity which came into existence consequent to M/s Cairn India Limited [Cairn] amalgamating with it HELD THAT:- We had found that the decision of Maruti Suzuki [ 2019 (7) TMI 1449 - SUPREME COURT ] had while enunciating the legal position with respect to an order being framed in the name of a non-existent entity had unequivocally held as being a fatal flaw which could neither be corrected nor rectified. It had held in explicit terms that such an order cannot be salvaged by taking recourse to Section 292B of the Act. We had also noticed the peculiar facts which obtained in Sky Light [ 2018 (4) TMI 529 - SC ORDER ] and which alone had led to the Supreme Court upholding the assessment made, albeit in the name of an entity which had ceased to exist. In the facts of the present case, we find that there was a valid disclosure made by the respondent-assessee and the AO being duly apprised of the factum of merger. Despite the above, it chose to make the draft assessment order in the name of a party which no longer existed on that date. This was, therefore, not a case where the factum of merger had either been suppressed or where the respondent had held out that Cairn still existed and could be proceeded against. It was the conduct of the assessee in Sky Light [ 2018 (2) TMI 1093 - DELHI HIGH COURT] which had convinced the Supreme Court to observe that the mistake would not render the order of assessment invalid and that it could be saved under Section 292B of the Act. The facts of the present case are clearly not akin to what prevailed in Sky Light. Regard must also be had to the fact that Section 154 enables an authority under the Act to rectify and correct an accidental slip or omission. It pertains to a power to rectify a mistake apparent from the record. Section 292B seeks to save orders which may suffer from similar mistakes provided they be otherwise compliant with the letter and spirit of the Act. However, and as the Supreme Court explained in Maruti Suzuki, the making of an order of assessment which is inherently flawed or suffering from a patent illegality, and which would include a case where the order is drawn in the name of a non-existent entity, cannot be saved or rescued. The power conferred by Section 154 would stand restricted to an inadvertent or unintentional error. The appellant has woefully failed to establish that the order of assessment as originally framed was intended to be in respect of the affairs of Vedanta, the respondent herein, or made cognizant of the factum of merger. We also bear in mind the indubitable fact that the AO proceeded to draw the order of assessment using the expression formerly known as . The appellant thus failed to acknowledge the merger even at this stage. The usage of the expression formerly known as is indicative of them presuming that the amalgamation was akin to a change to the fa ade of a legal entity as opposed to a fundamental alteration and the merger giving rise to a new being. It was these facts which had weighed upon us when we had amended the question of law on which the appeal was admitted. We thus find no merit in the argument that the challenge would be liable to be answered in light of Sky Light. Bearing in mind the fundamental error which beset the order of the TPO, the said decision would clearly not salvage the inherent and patent error which beset the order passed by the TPO. Absent any intent to assess the resultant entity, the order could neither have been rectified nor would it be saved by Section 292 B of the Act. Decided against revenue. Case-Laws Income Tax Fri, 17 Jan 2025 00:00:00 +0530