Dell International Services India Private Limited Vs DCIT (ITAT Bangalore)
Department Was Told of the Merger, Yet Passed the TDS Order on the Vanished Company: ITAT Quashes Section 201 Order
The Income Tax Department had been informed that EMC IT Solutions India Pvt. Ltd. had merged into Dell International Services India Pvt. Ltd. It even issued a show-cause notice to Dell. Yet the final order under section 201 was addressed to EMC, used EMC’s TAN and was uploaded to EMC’s account. The Bengaluru Tribunal held that the order had been passed on a non-existent entity and quashed it.
The ruling turned on more than an incorrect name appearing in one place. The successor company had notified the TDS office of the merger before the proceedings began and repeated that information during the proceedings. Despite those intimations, the authority concluded the case in the former company’s name.
The Merger and the TDS Proceedings
The National Company Law Tribunal, Bengaluru, approved EMC’s amalgamation into Dell by order dated 16 March 2023, with an appointed date of 1 April 2022. On 10 May 2023, Dell informed the office of the Assistant Commissioner of Income Tax, TDS Circle 1(1), Bengaluru, of the amalgamation and furnished the NCLT order. It asked that future communications concerning EMC be addressed to Dell and explained that future TDS compliance would be undertaken through Dell’s TAN.
The TDS authority later examined EMC’s tax audit report for assessment year 2018–19. Certain expenses reported in the audit material had not suffered TDS, leading to disallowance under section 40(a)(ia). Proceedings under section 201 were initiated by a notice dated 26 June 2024, issued in EMC’s name.
Dell replied on 12 July 2024, again drawing attention to the completed merger and objecting to proceedings in the former company’s name. The TDS authority subsequently issued a show-cause notice dated 8 October 2024 to Dell. In response, Dell furnished a reconciliation of the relevant expenses and details of subsequent deduction and payment of TDS.
The Final Order Returned to EMC’s Name
Despite issuing the later show-cause notice to the successor, the TDS authority passed its order dated 5 March 2025 under section 201 in EMC’s name. The order treated the matter as a default concerning TDS on year-end expense provisions and levied ₹11,30,211 as interest under section 201(1A), after taking account of submissions concerning later TDS deduction and disallowance under section 40(a)(ia).
Dell appealed on the threshold ground that an order could not validly be passed against EMC after its amalgamation. The Commissioner (Appeals) rejected that objection. Relying on Sky Light Hospitality LLP and Mahagun Realtors Pvt. Ltd., the Commissioner considered the reference to EMC’s TAN a procedural error and viewed the order as one concerning the correct amalgamated company.
Before the Tribunal, the Revenue also pointed out that Dell’s name and address appeared within the body of the order. It argued that the remaining references to EMC were clerical and could be cured under section 292B.
Why This Was More Than a Wrong TAN
The Tribunal examined how the order was actually made and served. The order was addressed to EMC, carried EMC’s TAN, and was served and uploaded on EMC’s income-tax portal account. Dell’s name appearing in its body did not change the entity against which the operative order had been issued.
The timing of the department’s knowledge was equally important. Dell’s May 2023 intimation and NCLT order were on record well before the June 2024 section 201 notice. Its July 2024 response repeated the merger objection. The later show-cause notice in Dell’s name showed that the authority had the successor’s identity before it. The Tribunal therefore rejected the suggestion that the final order merely contained an inconsequential reference to an old TAN.
Supreme Court Decisions Distinguished
The Tribunal applied the Supreme Court’s decision in PCIT v. Maruti Suzuki India Ltd., under which an amalgamating company ceases to exist following amalgamation and an order subsequently made in its name suffers from a jurisdictional defect.
It found the Commissioner (Appeals)’s reliance on Sky Light Hospitality LLP misplaced, noting that the Supreme Court had treated that case as turning on its particular facts. The Tribunal also distinguished Mahagun Realtors Pvt. Ltd.: in that case, the taxpayer had not intimated the amalgamation to the authorities and had continued to represent itself as the former entity. Dell had done the opposite, giving prompt and repeated notice of the merger.
On the facts before it, the Tribunal held that section 292B could not cure an order ultimately passed in the name of a company that no longer existed. It quashed the section 201 order as void from inception and allowed Dell’s appeal.
Author’s Comments
The decisive feature is the clear trail of merger intimation followed by a final order addressed and served to the dissolved entity. A reference to the successor in the narrative of an order did not repair its operative identity. For merger cases, the order demonstrates the value of placing the NCLT scheme, the intimation to the relevant tax office and subsequent responses on record.
The Tribunal granted relief solely on this jurisdictional ground. It did not decide Dell’s alternative arguments concerning the year-end provisions, subsequent TDS payments, section 40(a)(ia) disallowance or the period used to calculate interest under section 201(1A). Those merits grounds were left open.
Cases Discussed
- PCIT v. Maruti Suzuki India Ltd., (2019) 416 ITR 613 (Supreme Court) — followed for the principle that after amalgamation the amalgamating entity ceases to exist and an order subsequently passed in the name of that non-existing entity is without jurisdiction. The Tribunal applied this principle to quash the section 201 order.
- Sky Light Hospitality LLP v. ACIT, (2018) 92 taxmann.com 903 (Supreme Court); Sky Light Hospitality LLP v. ACIT, (2018) 405 ITR 296 (Delhi High Court) — relied upon by the CIT(A) but distinguished by the Tribunal. The Tribunal noted that Maruti Suzuki India Ltd. had specifically treated the Sky Light ruling as one rendered on its peculiar facts.
- PCIT v. Mahagun Realtors Pvt. Ltd., (2022) 440 ITR 1 (Supreme Court) — distinguished because in that case no amalgamation intimation had been furnished to the Revenue and the taxpayer continued to represent itself as the assessee, unlike Dell’s repeated pre-proceeding intimations.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The assessee has filed the present appeal against the impugned order dated 11.11.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Additional/Joint Commissioner of Income Tax (Appeals) – 2, Mumbai [“learned Addl./Joint CIT(A)”], which in turn arose from the order passed under section 201 of the Act, for the assessment year 2018-19.
2. In this appeal, the assessee has raised the following grounds: –
1:0 Re.: Validity of the Order passed u/s. 201(1)/201(1A) of the Income-tax Act, 1961 (“Act”):
1:1 The Assessing Officer has erred in passing the impugned Order dated 05 March 2025 u/s. 201(1)/201(1A) of the Act on a non-existent entity.
1:2 The CIT(A) failed to appreciate that the Assessing Officer has framed the impugned Order on ‘EMC IT Solutions India Private Limited’ u/s. 201(1)/201(1A) of the Act without appreciating that the erstwhile ‘EMC IT Solutions India Private Limited’ merged into Dell International Services India Private Limited w.e.f. 01 April 2022 and hence, is no longer in existence.
1:3 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the impugned Order framed by the TDS Officer on a non-existent entity is illegal, null and void ab-initio and hence, ought to be set aside and the Commissioner of Income-tax (Appeals) (“CIT(A)”] ought to have held as such.
1:4 The Appellant submits that the impugned Order be held as null and void and be struck down as such.
Without prejudice to the foregoing:
2:0 Re.: Erroneous levy of interest u/s. 201(1A) of the Act:
2.1 The Appellant submits that the TDS Officer/ CIT(A) erred in concluding that the Appellant is an ‘assessee-in-default’ for non-deduction of tax at source [‘TDS’] without appreciating the fact that the Appellant had duly deducted and deposited appropriate taxes in the subsequent year.
2.2 The Appellant submits that considering the facts and circumstances of its case, the TDS Officer erred in levying interest u/s. 201(1A) of the Act despite the fact that the Appellant had already disallowed corresponding expenses u/s. 40(a)(ia) of the Act while filing its return of income and thereby fastening dual liability/disallowance on the same expenses.
2.3 The Appellant submits that that considering the facts and circumstances of its case, the TDS Officer erred in not considering the judgment of the Hon’ble Karnataka High Court in Appellant’s own case in the previous years.
2:4 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the computation of interest u/s. 201(1A) of the Act made by the TDS Officer is arbitrary, misconceived, incorrect, erroneous and not in accordance with the law and the CIT(A) ought to have held as such.
2:5 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the TDS Officer erred in computing interest u/s. 201(1A) on year-end provisions for a period of eighteen months on an adhoc basis without considering the reconciliation of subsequent remittance of taxes furnished by the Appellant during the proceedings, with respect to the year-end provisions which were reversed at the beginning of the next month.
That the TDS Officer erred in computing interest under Section 201(1A) of the Act on year-end provisions for a period of eighteen months instead of computing up to the actual date of deduction of TDS.
2:6 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the TDS Officer erred in computing interest u/s. 201(1A) of the Act, on year-end provisions without appreciating that the provisions were subsequently reversed without receipt of corresponding invoices.
2:7 The Appellant submits that the TDS Officer be directed to delete the interest u/s. 201(1A) of the Act so levied by him.
3:0 Re.: General:
3:1 The Appellant craves leave to add, alter, amend, substitute and/or modify in any manner whatsoever all or any of the foregoing grounds of appeal at or before the hearing of the appeal.
3. In Ground No. 1, the assessee has challenged the validity of the order passed under section 201 of the Act on the basis that it was passed on a non-existent entity, and therefore is void ab initio.
4. The brief facts of the case pertaining to this issue, as emanating from the record, are: Upon perusal of the Tax Audit Report filed by the assessee, it was observed that the assessee has failed to deduct tax on certain expenses that were subject to TDS, leading to disallowance under section 40(a)(ia) of the Act. Consequently, proceedings under section 201 of the Act were initiated vide notice dated 26.06.2024. In response to the said notice, the assessee filed a letter on 12.07.2024 intimating the Deputy Commissioner of Income Tax, TDS, Circle – 1(1), Bengaluru (“AO-TDS”) that the notice dated 26.06.2024 was issued in the name of EMC IT Solutions India Pvt. Ltd. (hereinafter referred to as “erstwhile entity”), which has been amalgamated with Dell International Services India Pvt. Ltd. (hereinafter referred to as ”existing entity/amalgamated company”) with effect from appointed date 01.04.2022, vide order dated 16.03.2023 passed by the Hon’ble National Company Law Tribunal, Bengaluru, approving Scheme of Amalgamation under section 230 – 232 of the Companies Act, 2013. In this letter, the assessee also drew attention to its earlier letter dated 10.05.2023, intimating the fact of merger to the office of the Assistant Commissioner of Income Tax, TDS, Circle – 1 (1), Bengaluru. The assessee further submitted that the notice now issued on 26.06.2024 in the name of the erstwhile entity, after its merger with the existing entity, with an appointed date of 01.04.2022, is null and void. Accordingly, the assessee requested that the proceedings initiated under section 201 of the Act be dropped. Thereafter, the AO-TDS issued a notice dated 08.10.2024 in the name of the existing entity asking it to show cause as to why it should not be considered as “assessee in default” for non-deduction of TDS and be charged with tax and interest under section 201(1) and section 201(1A) of the Act. In response to the show cause notice, the assessee filed a reconciliation of expenses for the line items reported in clause 21 of Form 3CD for the subject year, with details of subsequent deduction and payment of withholding tax. In this regard, the assessee also filed its submission on 15.11.2024.
5. The AO-TDS, vide its order dated 05.03.2025 passed under section 201 of the Act in the name of the erstwhile entity, treated the assessee as “assessee in default” for non-deduction of TDS in respect of provision created for the year-end expenses. Considering the assessee’s submissions that it deducted TDS on some expenses and also made a disallowance under section 40(a)(ia) of the Act, the AO-TDS levied total interest of Rs. 11,30,211/- under section 201(1A) of the Act.
6. In its appeal before the learned CIT(A), the assessee specifically raised a ground challenging the validity of the order passed under section 201 of the Act, in the name of the erstwhile entity despite specific intimation regarding the amalgamation. The learned CIT(A), vide impugned order, placing reliance upon the decisions of Hon’ble Supreme Court in Sky Light Hospitality LLP vs. ACIT, reported in (2018) 92 taxmann.com 903 (SC) and PCIT vs. Mahagun Realtors Pvt. Ltd., reported in (2022) 440 ITR 1 (SC) held that the order under section 201 of the Act is passed in the name of correct amalgamated company and the reference to the erstwhile TAN is only a procedural matter, which does not vitiate the order. The learned CIT(A) further held that the present case is distinguishable from the decision of the Hon’ble Supreme Court in PCIT vs. Maruti Suzuki India Ltd., reported in (2019) 416 ITR 613 (SC). Accordingly, the learned CIT(A) dismissed the specific ground raised by the assessee challenging the validity of the order passed under section 201 of the Act on a non-existent entity. Being aggrieved, the assessee is in appeal before us.
7. During the hearing, the learned Senior Counsel submitted that even before the initiation of proceedings under section 201 of the Act vide notice dated 26.06.2024, the assessee vide its letter dated 10.05.2023 intimated the AO-TDS regarding the merger of the erstwhile entity. It was submitted that despite the specific intimation, the AO-TDS issued a notice in the name of the erstwhile entity. It was further submitted that even in the reply to the said notice, the assessee again brought to the attention of the AO-TDS the fact of amalgamation of the erstwhile entity with the amalgamated company. However, despite the assessee’s repeated intimations, the AO-TDS passed the assessment order in the name of the erstwhile entity. The learned AR, by placing reliance upon the decision of the Hon’ble Supreme Court in Maruti Suzuki India Ltd. (supra), submitted that after the amalgamation, the erstwhile entity lost its existence and therefore the order passed under section 201 of the Act in the name of the non-existent entity is a jurisdictional defect, which cannot be cured under section 292B of the Act. Thus, it was submitted that the said order is void ab initio. As regards the reliance placed by the learned CIT(A) on the decision of the Hon’ble Supreme Court in Sky Light Hospitality LLP (supra), the learned Senior Counsel submitted that in the said case, re-assessment notice issued in the name of the erstwhile entity was challenged and the same was held to be a curable error under section 292B of the Act. Insofar as the decision of the Hon’ble Supreme Court in Mahagun Realtors Pvt. Ltd. (supra), the learned Senior Counsel submitted that in the said case there was no intimation on the part of the assessee, unlike the present case, where the assessee in all its replies has intimated the fact of amalgamation and merger of the erstwhile entity with the amalgamated company.
8. On the other hand, the learned Department Representative (“learned DR”) submitted that the learned CIT(A) has dealt with this issue in detail. It was further submitted that the show cause notice was issued in the name of the existing entity and even the name and address of the existing entity were mentioned by the AO-TDS in the body of the order passed under section 201 of the Act. The learned DR submitted that the mentioning of the erstwhile TAN in the order passed under section 201 of the Act is a clerical error which is curable under section 292B of the Act. As regards the decision of the Hon’ble Supreme Court in Maruti Suzuki India Ltd. (supra), the learned DR submitted that the learned CIT(A) has already distinguished it. Thus, the learned DR vehemently relied upon the findings of the learned CIT(A) on this issue.
9. We have considered the submissions and judicial pronouncements relied upon by both sides, as well as perused the material available on record. Vide order dated 16.03.2023 passed by the Hon’ble National Company Law Tribunal, Bengaluru, EMC IT Solutions India Pvt. Ltd., i.e. the erstwhile entity, was amalgamated with Dell International Services India Pvt. Ltd., i.e. the amalgamated company, with effect from the appointed date 01.04.2022. In the present case, there is no dispute on this fact, as the order passed under section 201 duly notes it in the first paragraph. We find that on 10.05.2023, i.e. well before the initiation of any proceedings under section 201 of the Act for the year under consideration, the assessee filed a letter with the office of the Assistant Commissioner of Income Tax, TDS, Circle – 1 (1), Bengaluru intimating the amalgamation of the erstwhile entity. The assessee also furnished a copy of the order passed by the Hon’ble National Company Law Tribunal, Bengaluru, approving the Scheme of Amalgamation. From the perusal of the said letter, which forms part of the paper book on Page 15, we find that the assessee requested that the TDS compliance on the erstwhile entity would henceforth be undertaken through the TAN of the amalgamated company. Accordingly, the assessee requested that these developments be taken on record and that all future communications concerning the erstwhile entity be made with the amalgamated company. We find that despite specific intimation regarding the fact of merger, the AO-TDS initiated proceedings under section 201 of the Act in the name of the erstwhile entity vide its notice dated 26.06.2024. In its reply to the said notice, the assessee, vide its response dated 12.07.2024, again intimated the AO-TDS regarding the fact of amalgamation of the erstwhile entity and submitted that the notice issued in the name of the erstwhile entity is null and void. We find that thereafter, the AO-TDS issued a show cause notice in the name of the amalgamated company. However, after considering the response of the assessee to the show cause notice, the AO-TDS passed the order under section 201 of the Act in the name of the erstwhile entity. On perusal of the said order passed under section 201 of the Act, we find that it mentions the Tax Deduction and Collection Account Number (“TAN”) of the erstwhile entity. It is pertinent to note that in all its replies/communications, the assessee specifically mentioned the aspect of amalgamation of the erstwhile entity. However, despite specific information regarding the amalgamation of the erstwhile entity into the amalgamated company, the proceedings under section 201 of the Act were concluded in the name of the erstwhile entity, and the order under section 201 of the Act was also passed in the name of the erstwhile entity instead of the amalgamated company.
10. From the perusal of the impugned order passed by the learned CIT(A), it is evident that a specific ground was raised by the assessee challenging the validity of the order passed under section 201 of the Act in the name of the non-existing entity. However, the same was dismissed, placing reliance upon the decision of the Hon’ble Supreme Court in Sky Light Hospitality LLP (supra) and Mahagun Realtors Pvt. Ltd. (supra). We find that the Hon’ble Supreme Court in Maruti Suzuki India Ltd. (supra), in Para 27 of the judgment, specifically noted the fact that the decision in Sky Light Hospitality LLP (supra) was rendered in its own peculiar facts. The said aspect was further elaborated by the Hon’ble Supreme Court in Maruti Suzuki India Ltd. (supra) by taking into consideration facts noted by the Hon’ble Delhi High Court in Sky Light Hospitality LLP vs. ACIT, reported in (2018) 405 ITR 296 (Delhi). Therefore, we are of the considered view that the reliance placed by the learned CIT(A) on the decision of the Hon’ble Supreme Court in Sky Light Hospitality LLP (supra) for distinguishing the present case from Maruti Suzuki India Ltd. (supra) is completely misplaced. It is further pertinent to note that in Sky Light Hospitality LLP (supra), the validity of the notice issued under section 148 of the Act on the non-existing entity was challenged. However, in the present case, the assessee is challenging the validity of the order passed under section 201 of the Act in the name of the non-existing entity.
11. Insofar as the decision of the Hon’ble Supreme Court in Mahagun Realtors Pvt. Ltd. (supra), placed reliance upon by the learned CIT(A), we find that in the facts of that case, no intimation regarding the fact of amalgamation was filed before the Revenue authorities and the taxpayer in that case also suppressed the fact of amalgamation in the return filed under section 153A of the Act post-amalgamation. From the careful perusal of the aforesaid decision, we find that the Hon’ble Supreme Court also took into consideration the conduct of a taxpayer before all forums, commencing from the date of the search, consistently representing itself as the assessee. Thus, in the peculiar facts, the Hon’ble Supreme Court in Mahagun Realtors Pvt. Ltd. (supra) decided the issue against the taxpayer. However, in the present case, as noted in the foregoing paragraphs, soon after amalgamation of the erstwhile entity with the amalgamated company vide order dated 16.03.2023, the assessee filed a letter on 10.05.2023, intimating the fact of amalgamation of the erstwhile entity with the amalgamated company. At this stage, it is pertinent to reiterate that the assessee gave the said intimation before initiation of proceedings under section 201 of the Act in the name of the erstwhile entity, vide notice dated 26.04.2024, which culminated in the order passed under section 201 of the Act also in the name of the erstwhile entity.
12. During the hearing, the learned Senior Counsel also placed on record the details from the Income Tax Portal in respect of the erstwhile entity to show that the order under section 201 of the Act was served and uploaded on the erstwhile entity. Thus, from the perusal of the said details, which are placed on record, we are of the considered view that the order under section 201 of the Act, for all intents and purposes, was passed in the name of the erstwhile entity, as the same was also served on the erstwhile entity, despite multiple intimations highlighting the amalgamation of the erstwhile entity. In the present case, no material has been brought on record to controvert the aforesaid factual position. Thus, we are of the considered view that the decision of the Hon’ble Supreme Court in Mahagun Realtors Pvt. Ltd. (supra) is distinguishable on facts and therefore is not applicable to the present case.
13. During the hearing, the learned DR submitted that the name of the amalgamated company is mentioned in the order passed under section 201 of the Act. On perusal of the said order, it is evident that the name of the amalgamated company appears in the body of the order. However, the order is addressed to the erstwhile entity and, as noted in the foregoing paragraphs, was also served on the erstwhile entity. Therefore, we are of the considered view that merely mentioning the name of the amalgamated company in the body of the order does not fulfil the legal requirement.
14. The Hon’ble Supreme Court in Maruti Suzuki India Ltd. (supra) held that after the amalgamation, the amalgamating entity ceased to exist and therefore any order passed subsequently in the name of the non-existing entity would be without jurisdiction. Thus, respectfully following the decision of the Hon’ble Supreme Court in Maruti Suzuki India Ltd. (supra), we are of the considered view that the order passed by the AO-TDS under section 201 of the Act in the name of the non-existing entity, despite specific intimation regarding the fact of amalgamation, is void ab initio. Accordingly, the same is quashed. As a result, Ground No. 1 raised in assessee’s appeal is allowed.
15. Since the relief has been granted to the assessee on this short issue and the order passed under section 201 of the Act has been quashed, the other grounds raised by the assessee on the merits of the interest levied under section 201(1A) of the Act are rendered academic, and therefore, are kept open.
16. In the result, the appeal by the assessee is allowed.
Order pronounced in the open court on 25-Sept-2026.
