Assessment order framed in the name of non-existing person was void ab initio

Pr. CIT Vs Maruti Suzuki India Ltd. (Supreme Court)

In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment on 2 November 2017. The decision in Spice Enfotainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment.

FULL TEXT OF THE SUPREME COURT JUDGEMENT

1. This appeal arises from a judgment of a Division Bench of the Delhi High Court dated 9 January 2018 which upheld the decision of the Income Tax Appellate Tribunal¹. The Tribunal held that the assessment made in the name of Suzuki Powertrain India Limited² for Assessment Year³ 2012-13 is a nullity since the entity had been amalgamated with Maruti Suzuki India Limited⁴ under an approved scheme of amalgamation and was not in existence. The High Court, while affirming this view of the Tribunal 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)⁵ (“Maruti Suzuki”) . Holding that no question of law arose, the High Court dismissed the appeal under Section 260A of the Income Tax Act 1961⁶.

2. The Revenue is in appeal.

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