DCIT Vs Reliance Industries Ltd (Supreme Court of India)
The matter concerns assessment proceedings relating to assessment years 1993–94 to 1995–96 and a connected writ petition. The central issue before the High Court was a jurisdictional question: whether an assessment order passed under Section 143(3) of the Income-tax Act in the name of a non-existent entity after amalgamation is void ab initio.
Read HC Judgment: Assessment Orders Quashed as Passed in Name of Non-Existent Company After Amalgamation
The case arose from the merger of Reliance Polyethylene Limited (RPEL) and Reliance Polypropylene Limited (RPPL) with Reliance Industries Limited (RIL). The Bombay High Court had approved the amalgamation on 11 January 1995 with effect from 1 January 1995. After this date, the amalgamating companies ceased to exist. However, assessment orders were subsequently passed by the Assessing Officer in the names of RPEL and RPPL.
During the appeals before the High Court, the assessee raised a jurisdictional objection that the assessment orders were invalid because they were passed in the names of non-existent companies after amalgamation. The Court permitted the assessee to raise this issue at the final hearing because it went to the root of jurisdiction.
For assessment year 1994-95, the original returns were filed by RPEL and RPPL in November 1994 and revised in November 1995. Despite the merger becoming effective from 1 January 1995, assessment orders were passed on 27 March 1997 in the names of the amalgamating companies. These orders assessed substantial income. The assessee challenged the orders before the Commissioner of Income-tax (Appeals) and the Tribunal, and eventually before the High Court.
