TaxTMI 
TaxTMI 
2026 (3) TMI 960
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....nt under Section 260A of the Income Tax Act, 1961 (the Act), against the judgment dated 27.03.2024 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 828/Del/2021 whereby the ITAT has allowed the ITA in favour of the respondent. The ITAT, while relying upon the decision of the Supreme Court in the case of PCIT v. Maruti Suzuki (2020) 18 SCC 331 and of the judgment of a Coordinate Bench of this Court in the case of CIT v. Sony Mobile Communications India Pvt. Ltd. 2023/DHC/001366, had held that the final assessment order dated 30.03.2021 (wherein the income of the respondent was assessed as Rs.1,21,75,58,080/-) was void ab initio as the same was issued in the name of the erstwhile amalgamating entity before amalgamation i.e., Boeing International Corporation India Pvt. Ltd. (BICIPL) instead of the amalgamated entity named Boeing India Pvt. Ltd. (BIPL). 3. Before delving into the merits of the controversy it is pertinent to give a factual background leading to the filing of this appeal. It is an admitted fact that the respondent is an eligible assessee for the purposes of Section 144C of the Act. The present matter relates to the Assessment Year (AY) 2016-17 and the ret....
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.... not accept the contention of the learned Departmental Representative. A cursory glance of the draft assessment order dated 21.12.2019 clearly reveals that against the name of the assessee, the Assessing Officer has mentioned "Boeing International Corporation India Ltd." Whereas, in the column showing address of the assessee, the Assessing Officer has mentioned "M/s. Boeing International Corporation India Ltd. (3rd Floor) DLF Centre, Sansad Marg, New Delhi (India)". The aforesaid facts clearly show that the assessment order has been passed in the name of Boeing International Corporation India Ltd., which as on the date of passing of the draft assessment order has become a non-existent entity. Undisputedly, against the draft assessment order, assessee raised objections before learned DRP. Interestingly, the directions of learned DRP is in the name of Boeing India Pvt. Ltd., the successor company. However, the final assessment order has again been passed by the Assessing Officer in the name of Boeing International Corporation India Ltd., the erstwhile company. More interestingly, the name of the successor company i.e. Boeing India Pvt. Ltd., nowhere appears in the body of the final a....
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.... which the final assessment order dated 30.03.2021 was issued in the name of BICIPL. 6. Mr. Panda argued that one of the reasons for filing the present appeal is the fact that the ITAT has failed to consider the plea as advanced by the appellant about the glitch on the Income Tax Business Application (ITBA) system/portal resulting in the final assessment order passed in the name of BICIPL. He submitted that the TPO and DRP orders were passed in the name of the new amalgamated entity i.e., BIPL. It is his case that at the manual proceedings no issue was raised by the assessee with regard to these two orders. The assessee only raised the so called problem in the case of the draft assessment order even though, the details of the earlier as well as the current entities were clearly mentioned and the final assessment order was accompanied by the DRP directions passed through the ITBA system/portal. 7. It is his case that, the Tribunal had been duly informed that the present issue arose primarily because the return of the income was filed by the assessee in the ITBA system with the old Permanent Account Number (PAN). The notice under section 143(2) of the Act for scrutiny was issue....
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....nt order has been passed in the name of the non-existent entity. Mr. Panda has argued, such a lapse which is the result of a technical glitch, would be a mistake for the purposes of Section 292B of the Act and can be corrected by the Revenue by taking recourse to the powers available in Section 292B of the Act. 10. He stated that the final assessment order was inadvertently passed in the name of the old company due to the limitations in the ITBA portal which were beyond the control of the AO. As the notice under Section 143(2) of the Act was issued in the name and PAN of the old company, the ITBA system automatically took the details of the old company when the final assessment order was issued. It is his case that the ITAT failed to appreciate that the reason for the mistake/defect was beyond the control of the AO, as according to him, it was due to the automated system i.e., the ITBA portal due to which the subsequent orders, which are the draft assessment order and the final assessment order were passed with the details of the old company. It is therefore, a mere procedural irregularity that the order passed is in the name of the predecessor entity due to the limitation of th....
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.... and Nazir Mohamed v. J. Kamala, (2020) 19 SCC 57. He seeks the admission of the appeal and the setting aside of the order of the ITAT. 13. Mr. Sachit Jolly, learned Senior Counsel appearing along with Ms. Sherry Goyal on behalf of the respondents states that the ITAT has rightly set aside and quashed the final assessment order dated 30.03.2021 on the ground that the said order has been passed in the name and PAN of BICIPL which is the amalgamating entity and not the respondent herein which is BIPL i.e., the amalgamated entity. It is their case that BICIPL has filed its return of income declaring their total income of Rs. 60,50,17,000/- for the AY 2016-17 and it was thereafter on 21.07.2017 that the notice under Section 143(2) of the Act was served upon BICIPL for initiation of scrutiny assessment. He stated that on 27.02.2018 BICIPL merged with BIPL i.e., respondent herein, as per the scheme of merger from the appointed date being 01.04.2017. As per him, the draft assessment order under Section 144C of the Act was issued in the name of the amalgamating entity although, the name of the amalgamated entity i.e., BIPL was also mentioned in the assessment order. Being aggrieved by t....
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..... Commissioner of Service Tax, (2012) 247 CTR 500, Commissioner of Income Tax v. Dimension Apparels Private Limited, (2015) 370 ITR 288 (Del) and Commissioner of Income Tax v. Intel Technology India (P.) Ltd., (2016) 380 /TR 272 (Kar) and held that the said decisions dealt with the cases of issuance of assessment orders in the name of non-existent entities which was not an issue before the Court in Sky Light Hospitality (supra). Mr. Jolly also stated that in the case of Maruti Suzuki (supra), it is held in paragraph 31 that the decision in Sky Light Hospitality (supra) is not applicable in the case of assessment having not been framed in the case of a non-assessee. 16. On the issue of the ITBA portal having a technical / procedural glitch, Mr. Jolly stated that the argument raised on behalf of the Revenue, that the AO was prohibited from issuing the final assessment order in the name and PAN of the amalgamated entity and therefore, this defect is curable under Section 292B of the Act is misconceived as in the case of Spice Entertainment (supra) such an argument was rejected by holding that the assessment order in the name of non-existent entity does not translate to a curable de....
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....ons of the provisions of the Act, hence, this appeal ought to be dismissed. 19. Mr. Panda in his rejoinder submissions stated that the issue regarding the issuance of the final assessment in the name of BICIPL is an error which is covered under the provisions of Section 292B and can be subject to rectification. 20. Mr. Panda while referring to the facts of this present appeal stated that the decision in the cases of Maruti Suzuki (supra) and Sony Mobile (supra) are not applicable in the facts of the instant case and has proposed the following substantial questions of law which according to him need to be decided in the favour of the appellant. The same are as under:- "a. Whether in the facts and circumstances of the case, and in law, the conclusion reached by the Hon'ble ITAT is perverse, having failed to consider undisputed facts in light of which it was apparent that this was glitch on the ITBA portal due to which the final assessment order stands passed in the name of a non-existent entity? b. Whether the controversy at hand involves a procedural mistake that was curable in terms of Section 292B of the Income Tax Act, 1961 and the failure of the Hon'ble I....
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....ffice to state that the ITAT has set aside the order dated 30.03.2021. 22. The series of events leading upto the present controversy is referred to below: 29.11.2016 BICIPL filed its return of income declaring total income of Rs. 60,55,17,000/- for AY 2016-17. 21.07.2017 Notice under section 143(2) of the Act was served upon BICIPL initiating scrutiny assessment. The notice was issued in the correct name i.e., the predecessor entity as no amalgamation had taken place. 27.02.2018 BICIPL got merged with BIPL i.e., Respondent as per the scheme of merger dated 27.02.2018 from the appointed date of 01.04.2017. 10.04.2018 Respondent issued a letter informing the Revenue about the fact of amalgamation of BICIPL with BIPL. 31.10.2019 TPO Order under Section 92CA issued in the name of the amalgamated entity i.e., BIPL. 21.12.2019 Draft assessment under Section 144C of the Act was issued in the name and PAN of BICIPL, although name of BIPL was also mentioned in the assessment order. 19.10.2020 The DRP issued directions in the name and PAN of BIPL. 25.03.2021 Orders giving effect to DRP directions were issued in the name i.e., BIPL. 30.03.....
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....e same was "not applicable". It was in the aforesaid background, that the assessment order was passed by the AO wherein the assessee, Mahagun Realtors Pvt. Ltd. (MRPL) was stated to be represented by Mahagun India Pvt. Ltd. (MIPL). The issue was whether the assessment order could be passed in the name of both the amalgamating and amalgamated companies. The Supreme Court has opined that post amalgamation the amalgamating company ceased to exist, even then the successor entity (MIPL) continued to represent MRPL. The Supreme Court in Paragraphs 19, 34 to 36 and 41 to 44 held as under:- "19. Amalgamation, thus, is unlike the winding up of a corporate entity. In the case of amalgamation, the outer shell of the corporate entity is undoubtedly destroyed; it ceases to exist. Yet, in every other sense of the term, the corporate venture continues - enfolded within the new or the existing transferee entity. In other words, the business and the adventure lives on but within a new corporate residence i.e. the transferee company. It is, therefore, essential to look beyond the mere concept of destruction of corporate entity which brings to an end or terminates any assessment proceedings.....
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....ase, the assessment order dated 11-8-2011 mentions the name of both the amalgamating (MRPL) and amalgamated (MIPL) companies. 36. Secondly, in the cases relied upon, the amalgamated companies had participated in the proceedings before the Department and the courts held that the participation by the amalgamated company will not be regarded as estoppel. However, in the present case, the participation in proceedings was by MRPL-which held out itself as MRPL. xxxx xxxx xxxx xxxx 41. The facts of the present case are distinctive, as evident from the following sequence: 41.1. The original return of MRPL was filed under Section 139(1) on 30-6-2006. 41.2. The order of amalgamation is dated 11-5-2007 but made effective from 1-4-2006. It contains a condition, Clause 2 [ "2. That all the liabilities and duties of the transferor companies be transferred without further act or deed to the transferee company and accordingly the same shall pursuant to Section 394(2) of the Companies Act, 1956 be transferred to and become the liabilities and duties of the transferee company."], whereby MRPL's liabilities devolved on MIPL. 41.3. The original....
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....the Revenue), an additional ground was urged that the assessment order was a nullity because MRPL was not in existence. 41.10. Assessment order was issued undoubtedly in relation to MRPL (shown as the assessee, but represented by the transferee company MIPL ). 41.11. Appeals were filed to CIT (and a cross-objection, to ITAT) by MRPL "represented by MIPL". 41.12. At no point in time the earliest being at the time of search, and subsequently, on receipt of notice, was it plainly stated that MRPL was not in existence, and its business assets and liabilities, taken over by MIPL. 41.13. The counter-affidavit filed before this Court-(dated 7-11-2020) has been affirmed by Shri Amit Jain s/o Shri P.K. Jain, who is described in the affidavit as "Director of M/s Mahagun Realtors (P) Ltd., r/o...". 42. In the light of the facts, what is overwhelmingly evident is that the amalgamation was known to the assessee, even at the stage when the search and seizure operations took place, as well as statements were recorded by the Revenue of the Directors and Managing Director of the group. A return was filed, pursuant to notice, which suppressed the fact of ....
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....ny, the same would still be valid as in the case of Mahagun Realtors (supra). We are not in agreement with the submission of Mr. Panda as the above judgment has been passed in the facts of that case. In fact, in the judgment of Mahagun Realtors (supra), the Supreme Court clearly held that the facts in the Mahagun Realtors (supra) can be distinguished from the facts of Maruti Suzuki (supra) as can be seen from paragraphs 34, 35 and 36 of the judgment which we have already reproduced above. 28. In fact, unlike the facts in Mahagun Realtors (supra), the respondent/assessee in the present case had informed the Revenue about the amalgamation, firstly vide letter dated 10.04.2018, (as noted by the ITAT in paragraph 9 of the impugned order) and also on 25.09.2018, which dates are much before the final assessment order, which was passed on 30.03.2021 in the name of non-entity (BICIPL). 29. The reliance on the case of Mahagun Realtors (supra) may appear appealing on a first blush however on a deeper consideration the same is distinguishable on facts as the assessee therein had neither given any indication regarding the amalgamation at the time of search and seizure nor represented its....
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....urt observed that it was the peculiar facts of the case which led the Court to accept the finding that the wrong name given in the notice was merely a technical error which could be corrected under Section 292-B. Thus, there is no conflict between the decisions in Spice Enfotainment on the one hand and Skylight Hospitality LLP on the other hand. It is of relevance to refer to Section 292-B of the Income Tax Act which reads as follows: "292-B. Return of income, etc., not to be invalid on certain grounds.-No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act." In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing offi....
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....and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable." (emphasis supplied) 31. That apart it must be held that the issue regarding applicability of Section 292B of the Act is no longer res integra in light of the decision in the case of the Spice Entertainment (supra) wherein a Coordinate Bench of this Court settled the issue in a case of a company that has undergone amalgamation. The Court held that the provisions of Section 292B of the Act would not cure a jurisdictional defect since an assessment against an amalgamating entity was held to be akin to an assessment against a 'dead person' and hence cannot be seen as a mere procedural irregularity. We may note that an SLP against the judgment in Spice Entertainment (supra) was dismissed by the Supreme Court vide order dated 02.11.2017 in C.I.T. New Delhi v. M/s. Spice Enfotainment Ltd., Civil Appeal No. 285/2014 wherein the Supreme Court found no reason to interfere with the order of the High Court. In this regard, we refer to the relevant paragraphs of Spice Entertainment (supra), which reads as under:- "11. A....
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....d the amalgamated entities, although the final assessment order dated 30.03.2021 does not mention the amalgamated entity i.e., BIPL and even the PAN appearing in the final assessment order and the draft assessment order is also of the amalgamating entity. The final assessment order which mentions the credentials of BICIPL is reproduced below:- 1. PAN AACCB3303J 2. Name of the assessee BOEING INTERNATIONAL CORPORATION INDIA PRIVATE LIMITED 3. Address of the assessee 3rd FLOOR, DLF CENTER, SANSAD MARG, DELHI 999999, Delhi, India 4. Assessment Year 2016-17 5. Status COMPANY 6 Residential Status Resident 7. Date of filing of Return of Income 29/11/2016 8. Acknowledgement Number of Return of Income 546321041291116 9. Date of processing u/s 143(1)(a) of the Income-tax Act. 28/03/2018 10. Date of service of Notice under section 143(2) of the Income-tax Act As per Order Sheet 11. Date(s) of issue of Notice(s) under section 142(1) of the Income-tax Act 25/03/2021,26/03/2021 12. Order passed under section 143(3) r.w.s 144C(13) and 144C(13) read with sections 143(3A) & 143(3B) of the In....
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...., which would be the sole responsibility of the appellant/Revenue. 36. Now coming to the decision of a Coordinate Bench of this Court, which was relied on by Mr. Jolly and sought to be distinguished by Mr. Panda, in the case of Sony Mobile (supra) wherein the Court while referring to the decision in the case of Maruti Suzuki (supra) had also noted the decision in the case of Mahagun Realtors (supra). In Sony Mobile (supra) the assessee had taken an objection before the Tribunal regarding the absence of jurisdiction even when the assessee therein had informed the Revenue regarding the merger, similar to the case in hand. The relevant paragraphs of the judgment in the case of Sony Mobile (supra) is extracted below: "21. In so far as Mahagun Realtors is concerned, as observed hereinabove, the court, once again, noticed the judgment rendered in Spice Enfotainment. As regards Maruti Suzuki, the court in Mahagun Realtors made the following crucial observations: "In Bhagwan Dass Chopra v. United Bank of India it was held that in every case of transfer, devolution, merger or scheme of amalgamation, in which rights and liabilities of one company are transferred or devol....
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....ke a different view. There is a value which the court must abide by in promoting the interest of certainty in tax litigation. The view which has been taken by this court in relation to the respondent for the assessment year 2011-12 must, in our view be adopted in respect of the present appeal which relates to the assessment year 2012-13. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable.' The court, undoubtedly noticed Saraswati Industrial Syndicate Ltd. v. CIT. Further, the judgment in Spice (supra) and other line of decisions, culminating in this court's order, approving those judgments, was also noticed. Yet, the legislative change, by way of introduction of section 2(1A), defining 'amalgamation' was not taken into account. Further, the tax treatment in the various provisions of the Act were not brought to the notice of this court, in ....
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....ver, in the present case, the participation in proceedings was by MRPL- which held out itself as MRPL." 22. As is evident upon a perusal of the aforementioned extracts from Mahagun Realtors the court distinguished the judgment rendered in Maruti Suzuki, on account of the following facts obtaining in that case: (i) There was no intimation by the assessee regarding amalgamation of the concerned company. (ii) The return of income was filed by the amalgamating company, and in the "business reorganisation" column, curiously, it had mentioned "not applicable". (iii) The intimation with regard to the fact that the amalgamation had taken place was not given for the assessment year in issue. (iv) The assessment order framed in that case mentioned not only the name of the amalgamating company, but also the name of the amalgamated-company. (v) More crucially, while participating in proceedings before the concerned authorities, it was represented that the erstwhile company, i.e., the amalgamating company was in existence. 23. Clearly, the facts obtaining in Mahagun Realtors do not obtain in this matter. 24. As noticed abov....
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.... 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. 17. In our considered opinion, 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. Mr. Rai has also failed to draw our attention to any recital or observation forming part of the order of assessment which may have been representative of a conscious intent of the AO to frame an assessment in the name of the resultant entity and the order drawn in the name of Cairn being an accidental or inadvertent error. 18. We also bear in mind the indubitable fa....