Vodafone Mobile Services Limited Vs DCIT (ITAT Mumbai)
Draft Assessment on Non-Existent Entity Void ab Initio — ITAT Quashes Vodafone Assessment under Section 144C
The Mumbai Bench of the ITAT allowed Vodafone Mobile Services Limited’s appeal for AY 2012-13, quashing the entire assessment on the ground of a fatal jurisdictional defect under the special procedure of section 144C.
The Tribunal admitted an additional jurisdictional ground and additional documentary evidence showing that Vodafone West Limited had amalgamated into Vodafone Mobile Services Limited with effect from 01.04.2012, pursuant to a High Court-approved scheme. Crucially, the assessee had formally intimated the Assessing Officer about the amalgamation well before issuance of the draft assessment order in March 2016. Despite this, the AO issued the draft order in the name of the amalgamating (non-existent) entity.
The ITAT held that:
- A legally valid draft assessment order is the jurisdictional foundation for proceedings under section 144C;
- Issuing the draft order on a non-existent entity renders it non est and void ab initio;
- Such a jurisdictional defect is incurable—it cannot be cured by DRP directions, subsequent participation, section 292B, or by passing the final order in the correct name;
- Consequently, the DRP directions and the final assessment order are derivative and equally unsustainable.
Relying on settled precedents (including FedEx Express, Boeing India, and Siemens), the Tribunal quashed the assessment in entirety. All other grounds on merits were left academic. The appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
