Case Note & Summary
The Supreme Court dismissed the appeal filed by the Revenue against the judgment of the Delhi High Court which had upheld the Income Tax Appellate Tribunal's decision that the assessment order for Assessment Year 2012-13 passed in the name of Suzuki Powertrain India Limited (SPIL) was a nullity because SPIL had been amalgamated with Maruti Suzuki India Limited (MSIL) under an approved scheme of amalgamation with effect from 1 April 2012, prior to the passing of the assessment order. The Court noted that the High Court had followed its own decision for AY 2011-12 in Principal Commissioner of Income Tax – 6, New Delhi v Maruti Suzuki India Limited (successor of SPIL), holding that no question of law arose. The Revenue's Special Leave Petition for AY 2011-12 had been dismissed by the Supreme Court on 16 July 2018, relying on the decision in C.I.T., New Delhi Vs. M/s. Spice Enfotainment Ltd. The respondent argued that the same course should follow for AY 2012-13. The Court examined the facts: SPIL filed its return of income on 28 November 2012 in its own name. On 29 January 2013, the High Court approved the amalgamation scheme with effect from 1 April 2012. MSIL intimated the Assessing Officer of the amalgamation on 2 April 2013. Despite this, the Assessing Officer issued notices under Sections 143(2) and 142(1) in the name of SPIL, and the Transfer Pricing Officer passed an order under Section 92CA(3) determining the arm's length price. The draft assessment order dated 11 March 2016 was passed in the name of "Suzuki Powertrain India Limited (amalgamated with Maruti Suzuki India Limited)". MSIL participated in the proceedings through its authorized representatives. The final assessment order was passed on 31 October 2016 in the name of "SPIL (amalgamated with MSIL)". Before the Tribunal, the assessee raised the objection that the assessment was void as it was in the name of a non-existent entity. The Tribunal set aside the order, and the High Court affirmed. The Supreme Court held that the assessment order was void ab initio because it was passed against a company that had ceased to exist. The Court rejected the Revenue's argument that the defect was curable under Section 292B, as the defect was jurisdictional, not procedural. The Court also noted that the participation of MSIL did not cure the defect, as there is no estoppel against law. The Court distinguished the case from Sky light Hospitality LLP, where the notice under Section 148 was held curable, as in that case the final assessment order was not in the name of a non-existent entity. Here, both the draft and final assessment orders mentioned the amalgamating company's name, but the entity was non-existent. The Court dismissed the appeal, affirming the High Court's decision.
Headnote
A) Income Tax - Assessment of Non-Existent Entity - Nullity - Assessment made in the name of a company that had been amalgamated and had ceased to exist is void ab initio, as the entity was not in existence on the date of the assessment order. The defect is jurisdictional and cannot be cured under Section 292B of the Income Tax Act, 1961, even if the successor company participated in the proceedings. (Paras 1-16) B) Income Tax - Curable Defect - Section 292B - Section 292B of the Income Tax Act, 1961 applies only to procedural defects, not to jurisdictional defects such as assessment in the name of a non-existent entity. The provision cannot validate an order passed against a dead person or non-existent entity. (Paras 17-18) C) Income Tax - Precedent - Dismissal of SLP for Earlier Year - Where a Special Leave Petition for an earlier assessment year (AY 2011-12) was dismissed by the Supreme Court on the same issue, the same course must follow for the subsequent assessment year (AY 2012-13) on identical facts, as the dismissal operates as a binding precedent. (Paras 3-4)
Issue of Consideration
Whether an assessment order passed in the name of an amalgamating company which had ceased to exist due to amalgamation is a nullity, and whether such defect is curable under Section 292B of the Income Tax Act, 1961.
Final Decision
Appeal dismissed. The Supreme Court held that the assessment order passed in the name of a non-existent entity is void ab initio and the defect is not curable under Section 292B. The Court affirmed the High Court's judgment.
Law Points
- Assessment in name of non-existent entity is void ab initio
- Section 292B cannot cure jurisdictional defect
- Participation by successor does not validate void order
- Dismissal of SLP for earlier assessment year applies to subsequent year on same facts
