LEGAL ISSUE: Whether an assessment order issued in the name of an amalgamated company, which ceased to exist, is valid under the Income Tax Act, 1961.
CASE TYPE: Income Tax Law
Case Name: Pr. Commissioner of Income Tax, New Delhi vs. Maruti Suzuki India Limited
[Judgment Date]: 25 July 2019
Introduction
Date of the Judgment: 25 July 2019
Citation: 2019 INSC 713
Judges: Dr Dhananjaya Y Chandrachud, J and Indira Banerjee, J.
Can a tax assessment order issued in the name of a company that no longer exists be considered valid? The Supreme Court of India addressed this critical question in a case involving the Principal Commissioner of Income Tax and Maruti Suzuki India Limited. The core issue revolved around whether an assessment order issued to a company that had been amalgamated with another entity was legally sound. This judgment clarifies the position on assessment orders issued to non-existent entities.
The judgment was delivered by a two-judge bench comprising Dr. Dhananjaya Y Chandrachud, J, who authored the opinion, and Indira Banerjee, J.
Case Background
The case involves a dispute between the Principal Commissioner of Income Tax (appellant) and Maruti Suzuki India Limited (respondent) concerning an assessment order for the Assessment Year 2012-13. The core issue arose after the amalgamation of Suzuki Powertrain India Limited (SPIL) with Maruti Suzuki India Limited (MSIL).
Suzuki Metal India Limited was incorporated as a joint venture between Suzuki Motor Corporation and MSIL, with shareholdings of 70% and 30%, respectively. It was later renamed SPIL effective from June 8, 2005. On November 28, 2012, SPIL filed its income tax return, declaring an income of ₹2,12,51,51,156.
A scheme for the amalgamation of SPIL and MSIL was approved by the High Court on January 29, 2013, with effect from April 1, 2012. According to the scheme, all liabilities and duties of SPIL were transferred to MSIL, and SPIL was to be dissolved without winding up.
On April 2, 2013, MSIL informed the assessing officer about the amalgamation. Subsequently, the case was selected for scrutiny, and notices were issued under Section 143(2) and Section 142(1) of the Income Tax Act, 1961. The Transfer Pricing Officer (TPO) passed an order on January 22, 2016, determining the Arm’s Length Price of royalty and making an adjustment of ₹78.97 crores.
A draft assessment order was passed on March 11, 2016, in the name of “Suzuki Powertrain India Limited (amalgamated with Maruti Suzuki India Limited),” increasing the total income by ₹78.97 crores. MSIL participated in the assessment proceedings. The final assessment order was passed on October 31, 2016, in the name of SPIL (amalgamated with MSIL), adding ₹78.97 crores to the total income.
MSIL appealed before the Tribunal, arguing that the assessment proceedings were invalid since they were continued in the name of a non-existent entity, SPIL. The Tribunal set aside the assessment order, a decision affirmed by the Delhi High Court, leading to the present appeal before the Supreme Court.
Timeline:
| Date | Event |
|---|---|
| 8 June 2005 | Suzuki Metal India Limited changed its name to Suzuki Powertrain India Limited (SPIL). |
| 28 November 2012 | SPIL filed its return of income, declaring an income of ₹2,12,51,51,156. |
| 29 January 2013 | The High Court approved the scheme for the amalgamation of SPIL and MSIL, effective from April 1, 2012. |
| 1 April 2012 | Effective date of the amalgamation of SPIL and MSIL. |
| 2 April 2013 | MSIL informed the assessing officer of the amalgamation. |
| 26 September 2013 | Notice under Section 143(2) of the Income Tax Act, 1961 issued to SPIL. |
| 22 January 2016 | The Transfer Pricing Officer (TPO) passed an order determining the Arm’s Length Price of royalty. |
| 11 March 2016 | A draft assessment order was passed in the name of “Suzuki Powertrain India Limited (amalgamated with Maruti Suzuki India Limited)”. |
| 12 April 2016 | MSIL filed an appeal before the Dispute Resolution Panel (DRP) as successor in interest of SPIL. |
| 14 October 2016 | The DRP issued its order in the name of MSIL. |
| 31 October 2016 | Final assessment order was passed in the name of SPIL (amalgamated with MSIL). |
| 6 April 2017 | The Tribunal set aside the final assessment order. |
| 9 January 2018 | The Delhi High Court affirmed the Tribunal’s decision. |
| 16 July 2018 | The Supreme Court dismissed the Special Leave Petition in relation to AY 2011-12. |
| 25 July 2019 | The Supreme Court dismissed the appeal. |
Course of Proceedings
The Income Tax Appellate Tribunal set aside the final assessment order, holding it void ab initio because it was passed in the name of a non-existent entity. The Delhi High Court upheld the Tribunal’s decision, following its earlier ruling for AY 2011-12 in the case of Principal Commissioner of Income Tax – 6, New Delhi v Maruti Suzuki India Limited. The High Court dismissed the appeal under Section 260A of the Income Tax Act, 1961, stating that no question of law arose. The Revenue then appealed to the Supreme Court.
Legal Framework
The case primarily revolves around the interpretation and application of the following legal provisions:
- Section 2(31) of the Income Tax Act, 1961: Defines “person” for the purposes of the Act.
- Section 143(2) of the Income Tax Act, 1961: Pertains to the issuance of notice for scrutiny assessment.
- Section 142(1) of the Income Tax Act, 1961: Deals with the power of assessing officer to make inquiries.
- Section 144C of the Income Tax Act, 1961: Concerns the procedure for transfer pricing adjustments.
- Section 153 of the Income Tax Act, 1961: Specifies the time limit for completion of assessments.
- Section 170 of the Income Tax Act, 1961: Addresses succession to business otherwise than on death.
- Section 260A of the Income Tax Act, 1961: Provides for appeals to the High Court on questions of law.
- Section 292B of the Income Tax Act, 1961: States that no assessment shall be invalid due to any mistake, defect or omission if it is in substance and effect in conformity with the intent and purpose of the Act.
- Section 394 of the Companies Act, 1956: Deals with the provisions for amalgamation of companies.
The Supreme Court also considered the interplay between these provisions and the constitutional mandate under Article 141, which stipulates that the law declared by the Supreme Court is binding on all courts within the territory of India.
The court noted that upon a scheme of amalgamation being sanctioned under Section 394 of the Companies Act, 1956, the amalgamating company ceases to exist in the eyes of law.
Arguments
Appellant’s Arguments (Principal Commissioner of Income Tax):
- The High Court erred in quashing the assessment order solely because it was framed in the name of the amalgamating company, especially since both the amalgamated and amalgamating companies were mentioned in the order.
- Any error in framing the assessment order in the name of the amalgamating company is a curable “mistake, defect, or omission” under Section 292B of the Income Tax Act, 1961, as the assessment was substantially in line with the Act’s intent.
- The amalgamated company effectively represented the amalgamating company during assessment and appeal proceedings, causing no prejudice; thus, invalidating the order on a technicality is incorrect.
- Unlike the case in Spice Entertainment Ltd. v Commissioner of Service Tax, where only the name of the non-existent entity was mentioned, here, both the amalgamating and amalgamated companies’ names were included in the assessment orders.
- The decision in Skylight Hospitality LLP v Assistant Commissioner of Income Tax, which was upheld by the Supreme Court, supports the view that a notice issued to a non-existent company can be a procedural defect curable under Section 292B.
- Given the conflicting views in Skylight Hospitality LLP and Spice Enfotainment Ltd., there is a need to clarify whether a notice to a non-existent company is a jurisdictional error or a curable defect.
- The order of the TPO was not challenged by the assessee, and the directions of the TPO were implemented by the assessing officer in the draft assessment order in accordance with Section 144C(1) of the Income Tax Act, 1961.
- Relying on the decision of the Supreme Court in Kunhayammed v State of Kerala, the law stated in the order rejecting the Special Leave Petition will attract Article 141 of the Constitution.
Respondent’s Arguments (Maruti Suzuki India Limited):
- Upon amalgamation, the amalgamating company is dissolved without winding up and ceases to exist legally, as per Section 394 of the Companies Act, 1956 and the decision in Saraswati Industrial Syndicate Ltd. v CIT.
- The amalgamating company cannot be considered a “person” under Section 2(31) of the Income Tax Act, 1961, against whom assessment proceedings can be initiated.
- The jurisdictional notice under Section 143(2) of the Income Tax Act, 1961, was issued to SPIL, a non-existent entity, making the assessment proceedings void ab initio, as held in CIT v Intel Technology India (P) Ltd, PCIT v Nokia Solutions & Network India (P) Ltd. and Spice Entertainment.
- A notice to the amalgamating company after the amalgamation is void ab initio, despite the assessing officer being informed of the amalgamation, as per BDR Builders and Developers Pvt. Ltd. v ACIT, Rustagi Engineering Udyog (P .) Ltd. v DCIT, Khurana Engineering Ltd. v DCIT, Takshashila Realties (P) Ltd. v DCIT, and Alamelu Veerappan v ITO.
- The TPO’s order in the name of SPIL was invalid, as SPIL was no longer an “eligible assessee” under Section 144C(15)(b) of the Income Tax Act, 1961.
- The final assessment order was beyond the limitation period under Section 153(1) read with Section 153(4) of the Income Tax Act, 1961.
- According to Section 170(2) of the Income Tax Act, 1961, post-amalgamation assessments should be in the name of the amalgamated company.
- The Delhi High Court’s decision in Spice Entertainment held that an assessment in the name of a non-existent company is invalid and not curable under Section 292B. This decision has been affirmed by the Supreme Court in Civil Appeal No. 285 of 2014 and other connected matters.
- The respondent’s case is covered by the Supreme Court’s dismissal of the Special Leave Petition for AY 2011-12, following the judgment in Spice Entertainment.
- The judgment in Skylight Hospitality LLP is distinguishable as it involved a clerical error in a notice under Section 148, while this case involves an assessment order in the name of a non-existent entity.
Submissions of Parties
| Main Submission | Appellant’s Sub-submissions | Respondent’s Sub-submissions |
|---|---|---|
| Validity of Assessment Order |
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| Applicability of Section 292B |
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| Precedent and Legal Position |
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Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issue that the court addressed is:
- Whether an assessment order issued in the name of an amalgamating company, which had ceased to exist due to amalgamation, is valid under the Income Tax Act, 1961, or whether it is a nullity.
Treatment of the Issue by the Court
| Issue | How the Court Dealt with It |
|---|---|
| Whether an assessment order issued in the name of an amalgamating company, which had ceased to exist due to amalgamation, is valid under the Income Tax Act, 1961, or whether it is a nullity. | The court held that the assessment order issued in the name of the amalgamating company was invalid. The court reasoned that upon amalgamation, the amalgamating company ceases to exist, and therefore, any assessment order in its name is void ab initio. The court distinguished its earlier decision in Skylight Hospitality LLP, emphasizing that the facts of that case were peculiar and the error was merely clerical. The court also relied on its earlier decision in Spice Entertainment, which held that an assessment order in the name of a non-existent entity is a substantive illegality and not a procedural defect that can be cured under Section 292B of the Income Tax Act, 1961. |
Authorities
The Supreme Court considered the following authorities:
On the effect of amalgamation:
- Saraswati Industrial Syndicate Ltd. v CIT [(1990) 186 ITR 278 (SC)]: The court relied on this case to establish that upon amalgamation, the amalgamating company loses its entity.
On the validity of assessment orders issued to non-existent entities:
- Spice Entertainment Ltd. v Commissioner of Service Tax [2012 (280) ELT 43 (Del.)]: The Delhi High Court held that an assessment order in the name of a non-existent company is void.
- CIT v Dimension Apparels Pvt. Ltd [2015] 370 ITR 288 (Del): The Delhi High Court quashed an assessment order in the name of a non-existent company.
- CIT v Micron Steels P. Ltd [2015] 372 ITR 386 (Del.): The Delhi High Court held that an assessment in the name of a non-existent company due to amalgamation is a nullity.
- CIT v Micra India (P) Ltd [2015] 231 Taxman 809 (Del.): The Delhi High Court held that an assessment against a non-existent company is contrary to law.
- CIT v Intel Technology India (P) Ltd [2016] 380 ITR 272 (Kar.): Held that if a statutory notice is issued in the name of a non-existent entity, the entire assessment would be a nullity.
- PCIT v Nokia Solutions & Network India (P) Ltd [2018] 402 ITR 21 (Del): Held that if a statutory notice is issued in the name of a non-existent entity, the entire assessment would be a nullity.
- BDR Builders and Developers Pvt. Ltd. v ACIT [2017] 397 ITR 529 (Del): Held that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
- Rustagi Engineering Udyog (P .) Ltd. v DCIT [2016] 382 ITR 443 (Del): Held that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
- Khurana Engineering Ltd. v DCIT [2014] 364 ITR 600 (Guj): Held that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
- Takshashila Realties (P) Ltd. v DCIT [2017] 77 taxmann.com 160 (Guj.): Held that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
- Alamelu Veerappan v ITO [2018] 257 Taxman 72 (Madras): Held that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
- CIT v BMA Capfin Ltd [2018] 100 taxmann.com 329 (Del.): Assessments framed in the case of a non-existent entity (the amalgamating company) have been held to be non-est in the eyes of law.
On the curability of defects in notices:
- Skylight Hospitality LLP v Assistant Commissioner of Income Tax [(2018) 405 ITR 296 (Delhi)]: The Delhi High Court held that a mistake in the name of the assessee in a notice under Section 148 is a procedural defect curable under Section 292B. This decision was affirmed by the Supreme Court in [(2018) 13 SCC 147].
- Rajender Kumar Sehgal v ITO [2019] 260 Taxman 412 (Del.): Distinguished the judgment in Skylight Hospitality LLP and quashed the notice/assessment framed in the name of a non-existent entity.
- Chandreshbhai Jayantibhai Patel v ITO (2019) 261 Taxman 137 (Guj): Distinguished the judgment in Skylight Hospitality LLP and quashed the notice/assessment framed in the name of a non-existent entity.
On the doctrine of merger and Article 141:
- Kunhayammed v State of Kerala [(2000) 6 SCC 359]: The Supreme Court clarified that the law stated or declared by the Court in an order rejecting a Special Leave Petition attracts Article 141 of the Constitution.
On the interpretation of Section 292B of the Income Tax Act, 1961:
- The court interpreted Section 292B to mean that the provision is not applicable to substantive illegalities.
On the interpretation of Section 170 of the Income Tax Act, 1961:
- The court interpreted Section 170(2) to mean that assessments in respect of the income of the amalgamating company upto the appointed date has to be in the name of the amalgamated company as successor in interest of the amalgamating company.
On the issue of notices to legal representatives:
- Commissioner of Income Tax, Shillong v Jai Prakash Singh [(1996) 3 SCC 525]: The Supreme Court held that an omission to serve or any defect in the service of notices provided by procedural provisions does not efface or erase the liability to pay tax.
- Maharaja of Patiala v CIT [(1943) 11 ITR 202 (Bombay)]: The Bombay High Court held that a notice served on a legal representative is not bad merely because it omitted to state that it was served in that capacity.
- Chatturam v CIT [(1947) 15 ITR 302 (FC)]: The Federal Court held that the jurisdiction to assess and the liability to pay tax are not conditional on the validity of the notice.
Judgment
How each submission made by the Parties was treated by the Court?
| Submission | Treatment by the Court |
|---|---|
| Appellant’s submission that the assessment order was valid as it mentioned both the amalgamated and amalgamating companies. | Rejected. The court held that an assessment order in the name of a non-existent company is void ab initio. |
| Appellant’s submission that any error was curable under Section 292B of the Income Tax Act, 1961. | Rejected. The court held that the error was a substantive illegality and not a procedural defect curable under Section 292B. |
| Appellant’s submission that no prejudice was caused to the assessee due to participation in proceedings. | Rejected. The court held that participation in proceedings cannot operate as an estoppel against law. |
| Appellant’s submission that the decision in Skylight Hospitality LLP supports their case. | Rejected. The court distinguished the case of Skylight Hospitality LLP, stating that it was based on its peculiar facts and involved a clerical error. |
| Appellant’s submission that there is a conflict of views between Skylight Hospitality LLP and Spice Enfotainment Ltd. | Rejected. The court held that there is no conflict between the judgments and that Skylight Hospitality LLP was based on its peculiar facts. |
| Respondent’s submission that upon amalgamation, the amalgamating company ceases to exist. | Accepted. The court relied on Saraswati Industrial Syndicate Ltd. v CIT and other cases to support this position. |
| Respondent’s submission that the jurisdictional notice to a non-existent company is invalid. | Accepted. The court held that the jurisdictional notice under Section 143(2) issued to SPIL was invalid. |
| Respondent’s submission that the assessment order should be in the name of the amalgamated company under Section 170(2) of the Income Tax Act, 1961. | Accepted. The court noted that Section 170(2) provides that assessments should be in the name of the successor company. |
| Respondent’s submission that the decision in Spice Entertainment is applicable to the present case. | Accepted. The court relied on Spice Entertainment and other cases to hold that an assessment order in the name of a non-existent entity is invalid. |
| Respondent’s submission that the Supreme Court’s dismissal of the Special Leave Petition for AY 2011-12 is a binding precedent. | Accepted. The court held that the decision in the respondent’s case for AY 2011-12 is a binding precedent. |
How each authority was viewed by the Court?
✓ Saraswati Industrial Syndicate Ltd. v CIT [(1990) 186 ITR 278 (SC)]: The court followed this authority to establish that upon amalgamation, the amalgamating company loses its entity.
✓ Spice Entertainment Ltd. v Commissioner of Service Tax [2012 (280) ELT 43 (Del.)]: The court relied on this judgment, affirming that an assessment order in the name of a non-existent company is void.
✓ CIT v Dimension Apparels Pvt. Ltd [2015] 370 ITR 288 (Del): The court followed this authority to affirm that an assessment order in the name of a non-existent company is invalid.
✓ CIT v Micron Steels P. Ltd [2015] 372 ITR 386 (Del.): The court relied on this case to hold that an assessment in the name of a non-existent company due to amalgamation is a nullity.
✓ CITv Micra India (P) Ltd [2015] 231 Taxman 809 (Del.): The court followed this authority to affirm that an assessment against a non-existent company is contrary to law.
✓ CIT v Intel Technology India (P) Ltd [2016] 380 ITR 272 (Kar.): The court relied on this judgment, holding that if a statutory notice is issued in the name of a non-existent entity, the entire assessment would be a nullity.
✓ PCIT v Nokia Solutions & Network India (P) Ltd [2018] 402 ITR 21 (Del): The court relied on this judgment, holding that if a statutory notice is issued in the name of a non-existent entity, the entire assessment would be a nullity.
✓ BDR Builders and Developers Pvt. Ltd. v ACIT [2017] 397 ITR 529 (Del): The court relied on this case to hold that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
✓ Rustagi Engineering Udyog (P .) Ltd. v DCIT [2016] 382 ITR 443 (Del): The court relied on this case to hold that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
✓ Khurana Engineering Ltd. v DCIT [2014] 364 ITR 600 (Guj): The court relied on this case to hold that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
✓ Takshashila Realties (P) Ltd. v DCIT [2017] 77 taxmann.com 160 (Guj.): The court relied on this case to hold that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
✓ Alamelu Veerappan v ITO [2018] 257 Taxman 72 (Madras): The court relied on this case to hold that a notice to the amalgamating company, subsequent to the amalgamation becoming effective is void ab initio.
✓ CIT v BMA Capfin Ltd [2018] 100 taxmann.com 329 (Del.): The court relied on this case to hold that assessments framed in the case of a non-existent entity (the amalgamating company) have been held to be non-est in the eyes of law.
✗ Skylight Hospitality LLP v Assistant Commissioner of Income Tax [(2018) 405 ITR 296 (Delhi)]: The court distinguished this case, stating that it was based on its peculiar facts and involved a clerical error.
✓ Rajender Kumar Sehgal v ITO [2019] 260 Taxman 412 (Del.): The court relied on this case to distinguish the judgment in Skylight Hospitality LLP and quashed the notice/assessment framed in the name of a non-existent entity.
✓ Chandreshbhai Jayantibhai Patel v ITO (2019) 261 Taxman 137 (Guj): The court relied on this case to distinguish the judgment in Skylight Hospitality LLP and quashed the notice/assessment framed in the name of a non-existent entity.
✓ Kunhayammed v State of Kerala [(2000) 6 SCC 359]: The court relied on this authority to clarify that the law stated or declared by the Court in an order rejecting a Special Leave Petition attracts Article 141 of the Constitution.
The court did not specifically discuss the authorities cited on the issue of notices to legal representatives.
Final Decision:
The Supreme Court dismissed the appeal, upholding the decisions of the Tribunal and the High Court. The court held that the assessment order passed in the name of the amalgamating company (SPIL), which had ceased to exist, was invalid.
Ratio Decidendi
The Supreme Court’s ratio decidendi in this case is that an assessment order issued in the name of an amalgamating company that has ceased to exist due to amalgamation is void ab initio. The court held that:
- Upon amalgamation, the amalgamating company ceases to exist legally.
- An assessment order in the name of a non-existent entity is a substantive illegality, not a procedural defect curable under Section 292B of the Income Tax Act, 1961.
- The jurisdictional notice under Section 143(2) of the Income Tax Act, 1961, must be issued to the correct legal entity, and a notice to a non-existent entity is invalid.
- The court distinguished the judgment in Skylight Hospitality LLP, stating that it was based on its peculiar facts and involved a clerical error.
- The court relied on its earlier decision in Spice Entertainment, which held that an assessment order in the name of a non-existent entity is a substantive illegality and not a procedural defect that can be cured under Section 292B of the Income Tax Act, 1961.
The court emphasized that the provisions of Section 292B cannot cure a fundamental defect in jurisdiction. The court also noted that Section 170(2) of the Income Tax Act, 1961, provides that assessments in respect of the income of the amalgamating company upto the appointed date has to be in the name of the amalgamated company as successor in interest of the amalgamating company.
The Supreme Court emphasized that the law declared by the Court in an order rejecting a Special Leave Petition attracts Article 141 of the Constitution.
Ratio of the Judgment
| Ratio | Explanation |
|---|---|
| Amalgamation | Upon amalgamation, the amalgamating company ceases to exist as a legal entity. |
| Assessment Order | An assessment order in the name of a non-existent company is void ab initio. |
| Section 292B | Section 292B of the Income Tax Act, 1961, does not apply to substantive illegalities like assessment in the name of a non-existent entity. |
| Jurisdictional Notice | A jurisdictional notice under Section 143(2) must be issued to the correct legal entity. |
| Section 170(2) | Section 170(2) of the Income Tax Act, 1961, provides that assessments in respect of the income of the amalgamating company upto the appointed date has to be in the name of the amalgamated company as successor in interest of the amalgamating company. |
| Precedent | The law declared by the Court in an order rejecting a Special Leave Petition attracts Article 141 of the Constitution. |
Flowchart of the Case
Implications
The Supreme Court’s judgment in PCIT v. Maruti Suzuki India Limited has significant implications for tax law and practice:
- Invalidity of Assessment Orders: Assessment orders issued in the name of a non-existent company due to amalgamation are invalid and void ab initio.
- Substantive Illegality: The error of issuing an assessment order to a non-existent company is a substantive illegality and not a procedural defect that can be cured under Section 292B of the Income Tax Act, 1961.
- Jurisdictional Requirement: The jurisdictional notice under Section 143(2) must be issued to the correct legal entity.
- Compliance with Section 170(2): Assessments in respect of the income of the amalgamating company upto the appointed date has to be in the name of the amalgamated company as successor in interest of the amalgamating company.
- Precedent: The Supreme Court’s decision establishes a binding precedent for all tax authorities and courts in India.
- Due Diligence: Tax authorities must exercise due diligence to ensure that assessment orders are issued to the correct legal entity, particularly in cases of amalgamation.
- Protection of Taxpayers: The judgment protects taxpayers from being subjected to assessment proceedings in the name of entities that no longer exist.
- Clarity on Amalgamation: The judgment reinforces the legal position that upon amalgamation, the amalgamating company ceases to exist.
- Procedural Compliance: Tax authorities must strictly adhere to procedural requirements in assessment proceedings.
Conclusion
The Supreme Court’s ruling in PCIT v. Maruti Suzuki India Limited provides a clear legal position on the validity of assessment orders issued in the name of non-existent companies. The court held that such orders are void ab initio and cannot be cured under Section 292B of the Income Tax Act, 1961. This judgment reinforces the importance of ensuring that assessment proceedings are initiated against the correct legal entity and that tax authorities must exercise due diligence in cases of amalgamation. The decision provides clarity and protection to taxpayers, ensuring that they are not subjected to assessment proceedings in the name of entities that no longer exist. The ruling emphasizes that substantive illegalities cannot be cured by procedural provisions. The judgment is a significant contribution to tax jurisprudence and clarifies the legal position on assessment orders issued to non-existent entities.
Source: PCIT vs. Maruti Suzuki