CIT Vs Shell India Markets Pvt. Ltd. (Bombay High Court)
Subsequent development:
SLP filed by the Revenue before the Supreme Court in PCIT-LTU v. Shell India Markets Pvt. Ltd. was dismissed on 27 February 2026, thereby affirming the decision of the Bombay High Court.
Core Issue: Whether assessment proceedings initiated or completed in the name of a company that has ceased to exist due to amalgamation are valid in law, and whether such defect can be cured by invoking Section 292B of the Income-tax Act, 1961.
Brief Facts:-Shell Technology India Pvt. Ltd. amalgamated with Shell India Markets Pvt. Ltd. pursuant to a scheme of merger. As a consequence, the transferor company ceased to exist.
Read SC Judgment: SC Quashed Income Tax Assessment as Notice Issued to Non-Existing Company After Merger
The Assessing Officer was specifically informed about the amalgamation through a letter dated 21 September 2010.
Despite such intimation, the Assessing Officer issued the notice and passed the assessment order in the name of the transferor company “Shell Technology India Pvt. Ltd.”, which had already ceased to exist.
Before the Tribunal, the assessee raised an additional ground challenging the validity of the assessment order on the ground that it was passed against a non-existing entity.
The Tribunal accepted the contention and quashed the assessment order.
The Revenue preferred an appeal before the Bombay High Court under Section 260A.
Substantial Questions of Law Raised by the Revenue
The Revenue argued that the Tribunal erred in holding the assessment order invalid and framed the following questions:
1. Whether the Tribunal erred in ignoring the provisions of Section 292B, which protects proceedings from being invalidated due to technical defects.
2. Whether the Tribunal was justified in declaring the assessment order a nullity merely because the order was passed in the name of the transferor company.
3. Whether the Tribunal failed to apply the principle laid down in Skylight Hospitality LLP v. ACIT that technical mistakes should not invalidate proceedings when there is no prejudice.
Judicial Precedents Relied Upon by the Assessee
The assessee relied upon several binding precedents holding that proceedings against a non-existent entity are void ab initio, including:
1. PCIT v. Maruti Suzuki India Ltd.
2. Sterlite Technologies Ltd. v. DCIT (SLP dismissed by Supreme Court)
Spice Entertainment Ltd. v. CIT (SLP dismissed by Supreme Court)
Reliance Industries Ltd. v. P.L. Roongta
City Corporation Ltd. v. ACIT
Jitendra Chandrala Navlani v. Union of India
CIT v. Sony Mobile Communications India (P.) Ltd.
CIT v. Dimension Apparels (P.) Ltd.
CIT v. Micra India (P.) Ltd.
These authorities consistently hold that once a company is dissolved due to amalgamation, any proceedings against such company are void.
Findings of the Bombay High Court
The Bombay High Court agreed with the Tribunal and held:
The Assessing Officer had prior knowledge of the amalgamation.
Despite such knowledge, the notice and assessment order were issued in the name of the transferor company.
Once a company ceases to exist due to amalgamation, it cannot be treated as an assessee in law.
Proceedings against such entity are void and unenforceable.
The Court further held that:
The defect is not merely procedural but jurisdictional. Consequently, Section 292B cannot cure such defect.
Therefore, the assessment order and notice issued in the name of the transferor company were held invalid.
Decision The Bombay High Court:
Dismissed the Revenue’s appeal. Upheld the Tribunal’s order quashing the assessment framed in the name of the non-existing company.
However, the Court clarified that: The dismissal of the appeal does not prevent the Revenue from initiating fresh proceedings against the transferee company, if permissible under law.
Supreme Court Proceedings: The Revenue filed a Special Leave Petition before the Supreme Court in PCIT-LTU v. Shell India Markets Pvt. Ltd.
The Supreme Court held:
We are not inclined to interfere with the impugned judgment and order passed by the High Court.”
Accordingly,
The Special Leave Petition was dismissed, and The judgment of the Bombay High Court attained finality
Legal Principle Emanating from the Decision
The case reaffirms the settled principle laid down by the Supreme Court in Maruti Suzuki that:
Assessment proceedings against a non-existing entity are void ab initio.
Such defect cannot be cured under Section 292B.
Where amalgamation has taken place and the Assessing Officer has been informed, proceedings must be initiated in the name of the transferee company.
Validity of orders made against the non-existing company – notice or order is issued in the name of a nonexisting transferor following merger
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. This Appeal under Section 260A of the Income-Tax Act, 1961, for the Assessment Year 2007-08 is instituted by the Appellant-Revenue, proposing to raise the following substantial questions of law :
i. “Whether on the facts and in the circumstances of the case & in law, The Hon’ble ITAT was right in ignoring the provisions of Section 292B of the Act, which clearly states that no return of income, assessment, notice, summons or other proceedings, 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 proceedings if such return of income, assessment, notice, summons or other proceedings is in substance and effect in conformity with or according to the intent and purpose of the Income-tax Act, 1961?”
ii. Whether on the facts and in the circumstances of the case & in law, The Hon’ble ITAT was right in holding the assessment order as a nullity merely by reason of a technical mistake in the name of the assessee, while passing the assessment order, when the whole assessment proceedings were in substance and effect in conformity with according to the intent and purpose of the Income-tax Act, 1961?”
iii. Whether on the facts and in the circumstances of the case and in the law, the Hon’ble ITAT was right in holding the assessment as a nullity, while the Hon’ble Supreme Court in case of Skylight Hospitality LLP Vs ACIT (Special leave to appeal (c) No. 7409/2018 has held that the object and purpose behind section 292B of the act is to ensure that technical pleas on the ground of mistake, defect or omission should not invalidate the assessment proceedings, when no confusion or prejudice is caused due to non-observance of technical formalities”.
2. The Tribunal permitted the Respondent-Assessee to raise an additional ground that a notice and assessment order has been issued on a non-existing entity namely “Shell Technology India Private Limited” and therefore same is void. The Tribunal decided this ground in favour of the Respondent- Assessee and quashed the assessment order by accepting the submission of the Respondent-Assessee that the notice and order was issued in the name of non existing entity i.e. “Shell Technology India Pvt. Ltd.”, although the fact of the merger of this company into “Shell India Market Limited” was intimated to the officer, prior to the assessment order vide letter 21 September 2010.
3. Mr Suresh Kumar, learned counsel for the Appellant-Revenue, submits that this appeal can be disposed of by following various orders of this Court, wherein the decision of the Hon’ble Supreme Court in the case of Principal Commissioner of Income Tax, New Delhi V/s. Maruti Suzuki India Ltd.1and PCIT (Central)-2 V/s. M/s. Mahagun Realtors (P) Ltd.2 have been considered. He specifically brings to our attention the order and judgment passed by this bench in the case of Reliance Industries Limited V/s. P. L. Roongta And Ors., 3. Mr. Suresh Kumar specifically prayed that the Appeal can be disposed of with similar direction given in para No. 55 of the decision in the case of Reliance Industries Limited (Supra).
4. Mr Bhat, learned counsel for the Respondent-Assessee submits that the issue is now squarely covered by various decisions of the Hon’ble Supreme Court and this Court and has handed over a compilation of the decisions which are under:
Sr. No. Particulars
1. PCIT V/s. Maruti Suzuki India Ltd.: [2019] 416 ITR 613 (SC)
2. Sterlilte Technologies Ltd. V/s. DCIT: [2024] 462 ITR 457 (Bombay) [SLP filed by the Revenue Department before Hon’ble Supreme Court dismissed vide (2024) 462 ITR 462]
3. Spice Enfotainment Ltd. V/s. CIT: [2011] ITA No. 475 and 476 of 2011 (Delhi) [SLP filed by the Revenue Department before Hon’ble Supreme Court dismissed vide Civil Appeal No. 286 of 2014 & ors.]
4. Reliance Industries Limited V/s. P. L. Roongta & Ors.: WP No. 772 of 1992 and ITA No(s). 1313, 1380, 970, 971 of 2007, 6033, 6099 of 2010 (Bombay)
5. City Corporation Ltd. V/s. ACIT: [2025] 171 com301/WP No. 6076-6081 of 2023 (Bombay)
6. Jitendra Chandrala Navlani V/s. Union of India: [2024] 298 Taxman 15 / WP No. 1069/2016 (Bombay)
7. CIT vs Sony Mobile Communication Ind (P.) Ltd.: [2023] 456 ITR 753 (Delhi)
8. CIT vs Dimension Apparels (P.) Ltd.: [2015] 370 ITR 288 (Delhi)
9. CIT vs Micra India (P) Ltd.: [2015] 231 Taxman 809/ITA No. 441, 444-446, 452, 461 of 2013 (Delhi)
Mr Bhatt submits that the notice and order ought to have been issued in the name of the transferee company “Shell India Market Private Limited” and not against the transferor company “Shell Technology India Private Limited”.
5. We agree with the submission made by Mr Bhatt, learned counsel for the Respondent-Assessee that the notice and order should been have issued in the name of the transferee company “Shell India Market Private Limited” and not the transferor company “Shell Technology India Private Limited”. The decisions relied upon by the learned counsel for the Respondent-Assessee supports that if the Assessing Officer has been intimated about the fact of merger, then the notice should have been issued in the name of the transferee company and not the transferor company. Since in the instant case the notice and the assessment order is passed in the name of the transferor company “Shell Technology India Private Limited” and not the transferee company “Shell India Market Private Limited”, same are bad.
6. However, we clarify that the present Appeal is dismissed only on the ground that the notice and assessment order has been passed in the name of the transferor company by accepting the submission of the Respondent-Assessee that the orders could not have been made against the non-existing company. The result and consequence of this submission is that the Assessment order and the notice ought to have been issued in the name of the transferee company and the not the transferor company and contended by the Respondent-Assessee. Accepting the same, we clarify that this order would not preclude the Appellant-Revenue from initiating fresh proceedings against the transferee company, in accordance with law for assessing the income in the hands of the transferee company. We may also observe that the consequence and effect of the submission and the order made herein is that the income should have been assessed in the name of the transferee company and not the transferor company.
7. The Appeal is disposed of in above terms. No order as to costs.
Notes:
1 (2019) 416 ITR 613
2 2022 443 ITR 194
3 WP/ 772 of 1999 a/w Ors.
