DCIT Vs State Bank of India (ITAT Mumbai)
Mumbai ITAT Quashes Assessment Framed in Name of Amalgamated State Bank of Mysore
State Bank of Mysore amalgamated with State Bank of India with effect from 1 April 2017 pursuant to a Government notification. Nevertheless, the AO issued the notice under section 143(2) on 3 July 2017 and passed the assessment order under section 143(3) on 27 March 2018 in the name of the erstwhile State Bank of Mysore.
The Mumbai ITAT noted that the assessment order itself expressly acknowledged the amalgamation. Thus, the AO was fully aware that State Bank of Mysore had ceased to exist both when the statutory notice was issued and when the assessment was completed.
Following the Supreme Court’s decision in PCIT v. Maruti Suzuki India Ltd., the Tribunal held that an assessment framed in the name of a non-existent entity suffers from an inherent jurisdictional defect and is void ab initio. It is a substantive illegality and not a procedural error curable under section 292B.
The participation of State Bank of India in the assessment proceedings could not validate an assessment framed against the extinguished entity. Further, the Revenue could not plead ignorance because the amalgamation was effected through an Official Gazette notification and was expressly recorded by the AO himself.
