RELIGARE ENTERPRISES LTD. (AS SUCCESSOR-IN-INTEREST OF RGAM INVESTMENT ADVISERS PRIVATE LIMITED) vs ASSISTANT COMMISSIONER OF INCOME TAX & ANR.

2024-09-26 Information

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment reserved on: September 11, 2024

Judgment pronounced on September 26, 2024

+ ITA 116/2023

INTERNATIONAL HOSPITAL LIMITED …..Appellant

Through: Mr. Simran Mehta, Advocate.

versus

DCIT CIRCLE 12 (2) …..Respondent

Through: Mr. Gaurav Gupta, SSC along
with Mr. Shivendra Singh and
Mr. Yojit Pareek, JSCs.

+ W.P.(C) 13807/2022

RELIGARE ENTERPRISES LIMITED (AS SUCCESSOR-IN-
INTEREST OF RELIGARE SECURITIES LTD) …..Petitioner

Through: Mr. Rohit Jain, Mr. Aniket D.
Agrawal Ms. Manisha Sharma
and Ms. Somya Jain, Advocates

versus

ASSISTANT COMMISSIONER OF

INCOME TAX & ORS. …..Respondents

Through: Mr. Sunil Kumar Agarwal, SSC
along with Mr. Shivansh B.
Pandya, Mr. Viplav Acharya,
JSCs and Mr. Utkarsh Tiwari,
Adv.

+ W.P.(C) 11498/2019

BABA LEASE & INVESTMENT PVT LTD …..Petitioner

Through: Mr. Prakash Sinha, Adv.

versus

INCOME TAX OFFICER, WARD NO.
15(1), DELHI …..Respondent

Through: Mr. Siddhartha Sinha, SSC along

with Ms. Dacchita Shahi and Ms.
Anjuja Pethia, JSCs, Mr. Nring
Chamwibo Zeliang and Ms. Anu
Priya Minz, Advs.

+ W.P.(C) 1894/2020

M/S BABA LEASE & INVESTMENT PVT LTD …..Petitioner

Through: Mr. Prakash Sinha, Adv.

versus

INCOME TAX OFFICER WARD NO

16(1), DELHI …..Respondent

Through: Mr. Anurag Ojha, SSC along
with Ms. Hemlata Rawat and Mr.
V.K. Saksena, JSCs.

+ W.P.(C) 10882/2021

GARTNER INDIA RESEARCH AND ADVISORY SERVICES
PRIVATE LIMITED …..Petitioner

Through: Mr. Vishal Kalra, Ms. Singdha
Gautam, Mr. S.S. Tomar and Mr.
Ankit Sahni, Advs.

versus

THE ASSESSING OFFICER NATIONAL FACELESS
ASSESSMENT CENTRE DELHI & ANR. …..Respondents

Through: Mr. Abhishek Maratha, SSC
with Mr. Parth Semiwal, Mr.
Apoorv Agarwal, Jr SCs, Ms.
Nupur Sharma, Mr. Gaurav
Singh, Ms. Muskan Goel, Mr.
Bhanukaran Singh, Ms. Surabhi
Jain and Mr. Himanshu Gaur,
Advocates.

+ W.P.(C) 13862/2021

BSBK ENGINEERS PRIVATE LIMITED (RESULTING
COMPANY OF VOGUE LEASING AND FINANCE PVT.
LTD.) …..Petitioner

Through: Mr. Amol Sinha, Mr. Kshitij

Garg and Mr. Sourav Verma,
Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL
CIR-13 DELHI …..Respondent

Through: Mr. Sanjay Kumar, SSC along
with Ms. Easha Kadian, JSC.

+ W.P.(C) 13883/2021

BSBK ENGINEERS PRIVATE LIMITED (RESULTING
COMPANY OF MADHULIKA FINANCE COMPANY

LTD.) …..Petitioner

Through: Mr. Amol Sinha, Mr. Kshitij
Garg and Mr. Sourav Verma,
Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL
CIR-13 DELHI …..Respondent

Through: Mr. Sanjay Kumar, SSC along
with Ms. Easha Kadian, JSC.

+ W.P.(C) 13930/2021

RELIGARE ENTERPRISES LTD. (AS SUCCESSOR-IN-
INTEREST OF RGAM INVESTMENT ADVISERS PRIVATE
LIMITED) …..Petitioner

Through: Mr. Rohit Jain, Mr. Aniket D.
Agrawal Ms. Manisha Sharma
and Ms. Somya Jain, Advocates

versus

ASSISTANT COMMISSIONER OF INCOME

TAX & ANR. …..Respondents

Through: Mr. Sunil Kumar Agarwal, SSC
along with Mr. Shivansh B.
Pandya, Mr. Viplav Acharya,
JSCs and Mr. Utkarsh Tiwari,

Adv.

+ W.P.(C) 14005/2021

RELIGARE ENTERPRISES LTD. (AS SUCCESSOR-IN-
INTEREST OF RELIGARE CAPITAL MARKETS (INDIA)
PVT. LTD.) …..Petitioner

Through: Mr. Rohit Jain, Mr. Aniket D.
Agrawal Ms. Manisha Sharma
and Ms. Somya Jain, Advocates

versus

ASSISTANT COMMISSIONER OF INCOME

TAX & ANR. …..Respondents

Through: Mr. Sunil Kumar Agarwal, SSC
along with Mr. Shivansh B.
Pandya, Mr. Viplav Acharya,
JSCs and Mr. Utkarsh Tiwari,
Adv.

+ W.P.(C) 14061/2021

RELIGARE ENTERPRISES LTD. (AS SUCCESSOR-IN-
INTEREST OF RELIGARE ARTS INVESTMENT
MANAGEMENT LIMITED) …..Petitioner

Through: Mr. Rohit Jain, Mr. Aniket D.
Agrawal Ms. Manisha Sharma
and Ms. Somya Jain, Advocates

versus

ASSISTANT COMMISSIONER OF INCOME

TAX & ANR. …..Respondents

Through: Mr. Sunil Kumar Agarwal, SSC
along with Mr. Shivansh B.
Pandya, Mr. Viplav Acharya,
JSCs and Mr. Utkarsh Tiwari,
Adv.

+ W.P.(C) 14062/2021

RELIGARE ENTERPRISES LTD (AS SUCCESSOR-IN-
INTEREST OF RGAM CAPITAL INDIA LTD.) …..Petitioner

Through: Mr. Rohit Jain, Mr. Aniket D.

Agrawal Ms. Manisha Sharma
and Ms. Somya Jain, Advocates

versus

ASSISTANT COMMISSIONER OF INCOME

TAX & ANR. …..Respondents

Through: Mr. Sunil Kumar Agarwal, SSC
along with Mr. Shivansh B.
Pandya, Mr. Viplav Acharya,
JSCs and Mr. Utkarsh Tiwari,
Adv.

+ W.P.(C) 14296/2021

BSBK ENGINEERS PRIVATE LIMITED (RESULTING
COMPANY OF PARISHUDH FINANCE COMPANY PVT.
LTD.) …..Petitioner

Through: Mr. Amol Sinha, Mr. Kshitij
Garg and Mr. Sourav Verma,
Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL
CIR-13 DELHI …..Respondent

Through: Mr. Sanjay Kumar, SSC along
with Ms. Easha Kadian, JSC.

+ W.P.(C) 14306/2021

RANGOLI RESORTS PVT LTD (AS SUCCESSOR IN
INTEREST OF POLYFLEX MARKETING PVT LTD)

…..Petitioner

Through: Mr. Rohit Jain, Mr. Aniket D.
Agrawal, Ms. Manisha Sharma,
Mr. Saksham Singhal and Mr.
Samarth Chaudhari, Advocates

versus

ASSISTANT COMMISSIONER OF INCOME

TAX & ANR. …..Respondents

Through: Mr. Ruchir Bhatia, SSC along
with Mr. Anant Mann, JSC, Mr.
Abhishek Anand and Mr. Pranjal
Singh, Advs.

+ W.P.(C) 14798/2021

MADHU VINIYOG PRIVATE LIMITED (MARIGOLD
NIRMAN PVT. LTD. MERGED WITH PETITIONER)

…..Petitioner

Through: Mr. Rohit Bansal, Adv.

versus

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE
16(1), DELHI & ANR. …..Respondents

+ W.P.(C) 4035/2022

QUALCOMM INDIA PVT. LTD. AFTER MERGER OF CSR
TECHNOLOGY INDIA- PRIVATE LIMITED. …..Petitioner

Through: Ms. Ananya Kapoor, Adv.

versus

ASSISTANT COMMISSIONER OF INCOME

TAX CIRCLE 19-1 & ORS. …..Respondents

Through: Mr. Puneet Rai, SSC along with
Mr. Ashvini Kumar and Mr.
Rishabh Nangia, SCs.

+ W.P.(C) 4038/2022

QUALCOMM INDIA PVT. LTD. -AFTER MERGER OF
IKANOS COMMUNICATIONS INDIA PVT. LTD.

…..Petitioner

Through: Ms. Ananya Kapoor, Adv.

versus

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE
19 (1), DELHI AND ORS. …..Respondents

Through: Mr. Puneet Rai, SSC along with
Mr. Ashvini Kumar and Mr.
Rishabh Nangia, SCs.

+ W.P.(C) 4103/2022

QUALCOMM INDIA PVT. LTD. -AFTER MERGER OF CSR
INDIA PRIVATE LIMITED. …..Petitioner

Through: Ms. Ananya Kapoor, Adv.

versus

ASSISTANT COMMISSIONER OF INCOME TAX

CIRCLE 19-1 & ORS. …..Respondents

Through: Mr. Puneet Rai, SSC along with
Mr. Ashvini Kumar and Mr.
Rishabh Nangia, SCs.

+ W.P.(C) 5021/2022

NOKIA SOLUTIONS AND NETWORKS INDIA PVT LTD

(SUCCESSOR OF NOKIA SIEMENS NETWORK INDIA
PRIVATE LIMITED) …..Petitioner

Through: Mr. Deepak Chopra, Mr. Ankul
Goyal and Mr. Priyam
Bhatnagar, Advs.

versus

DEPUTY COMMISSIONER OF INCOME

TAX & ANR. …..Respondents

Through: Mr. Abhishek Maratha, SSC
with Mr. Parth Semiwal, Mr.
Apoorv Agarwal, Jr SCs, Ms.
Nupur Sharma, Mr. Gaurav
Singh, Ms. Muskan Goel, Mr.
Bhanukaran Singh, Ms. Surabhi

Jain and Mr. Himanshu Gaur,
Advocates.

+ W.P.(C) 5022/2022

M/S NOKIA SOLUTIONS AND NETWORKS INDIA PVT
LTD (SUCCESSOR OF NOKIA SIEMENS NETWORKS
INDIA PRIVATE LIMITED) …..Petitioner

Through: Mr. Deepak Chopra, Mr. Ankul
Goyal and Mr. Priyam
Bhatnagar, Advs.

versus

DEPUTY COMMISSIONER OF INCOME TAX,

CIRCLE 16 (1) AND ANR. …..Respondents

+ W.P.(C) 5118/2022

M/S NOKIA SOLUTIONS AND NETWORKS INDIA
PRIVATE LIMITED (SUCCESSOR OF NOKIA SIEMENS
NETWORKS INDIA PRIVATE LIMITED) …..Petitioner

Through: Mr. Deepak Chopra, Mr. Ankul
Goyal and Mr. Priyam
Bhatnagar, Advs.

versus

DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE
16(1) AND ANR …..Respondents

Through: Mr. Abhishek Maratha, SSC
with Mr. Parth Semiwal, Mr.
Apoorv Agarwal, Jr SCs, Ms.
Nupur Sharma, Mr. Gaurav

Singh, Ms. Muskan Goel, Mr.
Bhanukaran Singh, Ms. Surabhi
Jain and Mr. Himanshu Gaur,
Advocates.

+ W.P.(C) 5134/2022

PAYTM MOBILE SOLUTIONS PRIVATE LIMITED ( NOW
MERGED INTO ONE 97 COMMUNICATIONS LIMITED)

…..Petitioner

Through: Mr. Deepak Chopra, Mr. Ankul
Goyal and Mr. Priyam
Bhatnagar, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE
19(1), DELHI AND ORS. …..Respondents

Through: Mr. Indruj Rai, SSC with Mr.
Sanjeev Menon and Mr. Rahul
Singh, JSCs

+ W.P.(C) 5161/2022

PAYTM MOBILE SOLUTIONS PRIVATE LIMITED (N0W
MERGED INTO ONE 97 COMMUNICATIONS LIMITED)

…..Petitioner

Through: Mr. Deepak Chopra, Mr. Ankul
Goyal and Mr. Priyam
Bhatnagar, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE
19(1), DELHI AND OTHERS …..Respondents

Through: Mr. Indruj Rai, SSC with Mr.
Sanjeev Menon and Mr. Rahul
Singh, JSC

+ W.P.(C) 5165/2022

PAYTM MOBILE SOLUTIONS PRIVATE LIMITED (NOW
MERDED INTO ONE 97 COMMUNICATIONS LTD.)

…..Petitioner

Through: Mr. Deepak Chopra, Mr. Ankul
Goyal and Mr. Priyam
Bhatnagar, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE
19(1), DELHI AND ORS. …..Respondents

Through: Mr. Indruj Rai, SSC with Mr.
Sanjeev Menon and Mr. Rahul
Singh, JSC

+ W.P.(C) 5166/2022

PAYTM MOBILE SOLUTIONS PRIVATE LIMITED (NOW
MERGED INTO ONE 97 COMMUNICATIONS LTD.)

…..Petitioner

Through: Mr. Deepak Chopra, Mr. Ankul
Goyal and Mr. Priyam
Bhatnagar, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE
19(1), DELHI AND ORS. …..Respondents

Through: Mr. Indruj Rai, SSC with Mr.
Sanjeev Menon and Mr. Rahul
Singh, JSC

+ W.P.(C) 5171/2022

PAYTM MOBILE SOLUTIONS PRIVATE LIMITED (NOW
MERGED INTO ONE 97 COMMUNICATIONS LIMITED)

…..Petitioner

Through: Mr. Deepak Chopra, Mr. Ankul
Goyal and Mr. Priyam
Bhatnagar, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME

TAX & ORS. …..Respondents

Through: Mr. Indruj Rai, SSC with Mr.
Sanjeev Menon and Mr. Rahul
Singh, JSC

+ W.P.(C) 5475/2022

SHAKUNTLAM SOFTECH PRIVATE LIMITED (NOW
AMALGAMATED WITH SHAKUNTLAM SECURITIES
PRIVATE LIMITED) …..Petitioner

Through: Mr. Ruchesh Sinha and Ms.
Monalisa Maity, Advs.

versus

INCOME TAX OFFICER WARD 23(1)

DELHI & ANR. …..Respondents

Through: Mr. Puneet Rai, SSC along with
Mr. Ashvini Kumar and Mr.
Rishabh Nangia, SCs.

+ W.P.(C) 7151/2022

MERCER CONSULTING (INDIA) PRIVATE

LIMITED …..Petitioner

Through: Mr. Manuj Sabharwal and Mr.
Drona Negi, Advocates

versus

DEPUTY COMMISSIONER OF INCOME-

TAX & ORS. …..Respondents

Through: Mr. Siddhartha Sinha, SSC along
with Ms. Dacchita Shahi and Ms.
Anjuja Pethia, JSCs, Mr. Nring
Chamwibo Zeliang and Ms. Anu
Priya Minz, Advs.

+ W.P.(C) 7217/2022

MERCER CONSULTING (INDIA) PRIVATE

LIMITED …..Petitioner

Through: Mr. Manuj Sabharwal and Mr.
Drona Negi, Advocates

versus

DEPUTY COMMISSIONER OF INCOME-TAX

CIRCLE 16(1), DELHI & ORS. …..Respondents

Through: Mr. Siddhartha Sinha, SSC along
with Ms. Dacchita Shahi and Ms.
Anjuja Pethia, JSCs, Mr. Nring
Chamwibo Zeliang and Ms. Anu
Priya Minz, Advs.

+ W.P.(C) 13991/2022

EKUM DESIGN PRIVATE LIMITED …..Petitioner

Through: Mr. Vikas Jain, Mr. Aviral
Saxena, Ms. Shrawani, Mr.
Piyush Thavi and Mr. Hardik
Jayal, Advs.;

versus

INCOME TAX OFFICER AND ORS. …..Respondents

Through: Mr. Sanjay Kumar, SSC along
with Ms. Easha Kadian, JSC.

+ W.P.(C) 14034/2022

SIDDHESHWARI TRADEX

PRIVATE LIMITED …..Petitioner

Through: Ms. Shreya Jain and Adv. Mr.
Gaurav Tanwar, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME

TAX & ANR. …..Respondents

Through: Mr. Sanjay Kumar, SSC along
with Ms. Easha Kadian, JSC.

+ W.P.(C) 17290/2022

RANJITGARH FINANCE CO. PRIVATE LIMITED
(TRANSFEREE COMPANY OF AASTHA PROFESSIONAL
CONSULTANTS PRIVATE LIMITED) THROUGH ITS
DIRECTOR SH. MANAN NARANG …..Petitioner

Through: Mr. Mukesh Sukhija, Mr. Milind
Gautam, Mr. Priyeranjan
Ambashtha and Ms. Archana
Biala, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME

TAX CIRCLE 19(1) …..Respondent

Through: Mr. Aseem Chawla, SSC with
Ms. Priya Sarkar, JSC & Ms.
Pratishtha Chaudhary, Adv.

+ W.P.(C) 17329/2022 & CM APPL. 57045/2023 (Direction)

RANJITGARH FINANCE CO. PRIVATE LIMITED
(TRANSFEREE COMPANY OF OMANSH PROPERTIES
PRIVATE LIMITED) THROUGH ITS DIRECTOR SH.
MANAN NARANG …..Petitioner

Through: Mr. Mukesh Sukhija, Mr. Milind
Gautam, Mr. Priyeranjan
Ambashtha and Ms. Archana
Biala, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME

TAX CIRCLE 19(1) …..Respondent

Through: Mr. Aseem Chawla, SSC with
Ms. Priya Sarkar, JSC & Ms.
Pratishtha Chaudhary, Adv.

+ W.P.(C) 3885/2023

NCUBATE INDIA SERVICES PRIVATE

LIMITED …..Petitioner

Through: Mr. Sumit K. Batra, Mr. Manish
Khurana, Ms. Priyanka Jindal &
Mr. Nikhin Alex, Advs.

versus

DEPUTY COMMISSIONER OF INCOME TAX,

CIRCLE 16 (1), DELHI & ANR. …..Respondents

Through: Mr. Gaurav Gupta, SSC along
with Mr. Shivendra Singh and
Mr. Yojit Pareek, JSCs.

+ W.P.(C) 4558/2023

SUNCITY HI-TECH INFRASTRUCTURE PRIVATE
LIMITED – AFTER MERGER OF M/S SUPER BUILT REAL
ESTATES AND LAND DEVELOPERS PVT. LTD

…..Petitioner

Through: Mr. Salil Kapoor, Mr. Sumit
Lalchandani and Ms. Ananya
Kapoor, Advs.

versus

INCOME TAX OFFICER, WARD 24-1,

DELHI & ANR. …..Respondents

Through: Mr. Sunil Kumar Agarwal, SSC
along with Mr. Shivansh B.
Pandya, Mr. Viplav Acharya,
JSCs and Mr. Utkarsh Tiwari,
Adv.

+ W.P.(C) 5868/2023 & CM APPL. 23019/2023 (Interim Stay)

ELITE WEALTH LIMITED …..Petitioner

Through: Mr. Amol Sinha, Mr. Kshitij
Garg and Mr. Sourav Verma,
Advs.

versus

INCOME TAX OFFICER, WARD8(1),

DELHI & ANR. …..Respondents

Through: Mr. Debesh Panda, SSC with
Mr. Vikramaditya Singh, Ms.
Zehra Khan, JSCs and Mr. Ishan
Puri, Adv.

+ W.P.(C) 7775/2023 & CM APPL. 30016/2023 (Stay)

LECOANET HEMANT INDIA PVT. LTD. (SUCCESSOR /
TRANSFEREE COMPANY OF IP SUPPORT SERVICES
(INDIA) PVT. LTD.) …..Petitioner

Through: Mr. Piyush Kaushik and Mr.
Tanveer Zaki, Advs.

versus

PRINCIPAL COMMISSIONER OF INCOME TAX-4
N.DELHI & ANR. …..Respondents

Through: Mr. Gaurav Gupta, SSC along
with Mr. Shivendra Singh and
Mr. Yojit Pareek, JSCs.

+ W.P.(C) 7487/2024 & CM APPL. 31188/2024 (Interim Stay)

LECOANET HEMANT INDIA PVT. LTD. …..Petitioner

Through: Mr. Piyush Kaushik and Mr.
Tanveer Zaki, Advs.

versus

PRINCIPAL COMMISSIONER OF INCOME

TAX-4 & ANR. …..Respondents

Through: Mr. Gaurav Gupta, SSC along
with Mr. Shivendra Singh and
Mr. Yojit Pareek, JSCs.

CORAM:

HON’BLE MR. JUSTICE YASHWANT VARMA

HON’BLE MR. JUSTICE RAVINDER DUDEJA

J U D G M E N T

YASHWANT VARMA, J.

1. This batch of writ petitions and a connected Income Tax Appeal
impugn orders of assessment as well as reassessment action initiated by
the respondents on the ground of the amalgamated entity having never
been placed on notice. The petitioners would contend that despite the
respondents having been duly apprised of the factum of amalgamation,
no notices were served upon the amalgamated entity and orders of
assessment as well as notices of reassessment were maintained in the
name of the amalgamating entity. This, according to the writ
petitioners, would amount to a fatal defect rendering the final orders
and notices as framed being null and void. It was their submission that
the impugned action of the respondents would not sustain in light of the
decision rendered by the Supreme Court in Principal Commissioner of
Income Tax, New Delhi vs Maruti Suzuki (India) Limited1.
2. The respondents, on the other hand, would urge us to hold that a
failure to place the amalgamated entity on notice is curable and one
which would fall within the ambit of Section 292B of the Income Tax
Act, 19612. Additionally, the respondents rest their case on a
subsequent decision of the Supreme Court in Principal Commissioner
of Income Tax (Central)-2 vs. Mahagun Realtors (P) Ltd.3. It is the
aforesaid rival contentions which fall for our consideration in this
batch.
3. For facilitating disposal of the present matters, the petitioners had

1 (2020) 18 SCC 331

2 Act

3 2022 SCC OnLine SC 407

circulated a detailed chart pertaining to each individual writ petitioner
encapsulating relevant details pertaining the Scheme of Arrangement as
sanctioned by the National Company Law Tribunal4 or the concerned
High Court, the dates when the factum of merger may have been
intimated to the respondents as well as details pertaining to orders of
assessment as made or notices issued under Section 148. That chart
which was presented for our consideration is appended to the judgment
as Appendix A.
4. From the facts which have been set forth in the lead writ petition
being W.P.(C) 13807/2022, we find that Religare Securities Ltd5. was
a company incorporated under the Companies Act, 19566 and was
regularly assessed to tax under the provisions of the Act. It is also
stated to be a company which was duly listed on the National Stock
Exchange as well as the Bombay Stock Exchange and engaged in
providing security, brokering and depository services to its retail
clients. For Assessment Year7 2015-16, RSL is stated to have filed its
return of income on 31 March 2017. An assessment order under Section
143(3) thereafter came to be framed on 10 December 2018. Although
that assessment formed subject matter of cross appeals preferred by
respective sides before the Income Tax Appellate Tribunal8, the
dispute forming part of assessees appeal ultimately came to be settled
under the Direct Tax Vivad se Vishwas Act, 20209. The appeal of the
Revenue, however, continues to remain pending before the Tribunal.

4 NCLT

5 RSL

6 1956 Act

7 AY

8 Tribunal

9 The 2020 Act

5. Eleven entities of the Religare Group including RSL are stated to
have filed a petition before the NCLT for approval of a composite
Scheme of Arrangement. It is the case of the writ petitioner that the
Assessing Officer10 of RSL had submitted its No Objection to the
proposed Scheme before the NCLT on 28 September 2017. That
Scheme ultimately came to be approved by the NCLT on 08 December
2017, pursuant to which the brokering business of RSL was demerged
and vested in Religare Broking Ltd. as a going concern while the
remaining balances and undertaking of RSL stood amalgamated with
the petitioner, Religare Enterprises Ltd. The appointed date under the
aforesaid Scheme was prescribed to be 01 April 2016.
6. It is the case of the writ petitioner that the factum of merger was
duly intimated to the Assessing Officer on 29 December 2017. The
petitioner is also stated to have submitted merged financial statements
along with a revised Return of Income on 29 March 2019.
7. On 15 April 2021, a notice under Section 148 came to be issued
in the name of RSL. The aforesaid notice was assailed by the writ
petitioner by way of W.P.(C) 7132/2021 before this Court and which
ultimately came to be allowed along with a batch of writ petitions
which formed subject matter of Mon Mohan Kohli v. Assistant
Commissioner of Income-tax and Another11.
8. In terms of the judgment rendered by the Court on that batch, the
reassessment notice of 15 April 2021 came to be quashed. The decision
in Mon Mohan Kohli as well as judgments rendered on similar lines by
different High Courts ultimately travelled up to the Supreme Court and

10 AO

11 2021 SCC OnLine Del 5250

where the controversy with respect to the reassessment regime which
would be applicable in respect of notices issued post 01 April 2021
ultimately came to be clarified in terms of the judgment rendered in
Union of India and Ors. vs. Ashish Agarwal12. Shorn of unnecessary
details, suffice it to note that the decisions of different High Courts
came to be modified with liberty being accorded to the Revenue to treat
the notices originally issued under Section 148 as being referable to
Section 148A(b) as introduced by virtue of Finance Act, 2021 and for
proceedings to be taken forward in accordance with law.
9. Acting in purported compliance of that decision, the respondents
on 25 May 2022 issued a communication in the name of RSL and
provided a copy of the information on the basis of which the notice of
15 April 2021 had been initially issued. It is further alleged by the writ
petitioner that without granting any right of personal hearing, a final
order referable to Section 148A(d) came to be passed on 28 July 2022
followed by a consequential notice under Section 148. It was the
aforesaid action which ultimately led to the institution of the present
writ petition. It becomes pertinent to note that it was only the Section
148A(d) order and the consequential notice under Section 148 issued
pursuant to the aforesaid determination which for the first time came to
be framed in the name of the resultant entity, Religare Enterprises
Limited. Both the original Section 148 notice as well as the subsequent
notice under Section 148A(b) were in the name of RSL.
10. It becomes pertinent to note that although Instruction No. 1/2022
dated 11 May 2022 issued by the Central Board of Direct Taxes13

12 (2023) 1 SCC 617

13 CBDT

also formed subject matter of challenge in some of the writ petitions
forming part of this batch, no arguments were addressed on that score.
We thus confine our determination to the principal question of whether
the impugned proceedings would sustain when viewed in the context of
the same having been drawn in the name of entities which had ceased to
exist.
11. The writ petitioners essentially contend that in terms of a Scheme
of Arrangement which may ultimately come to be approved by the
jurisdictional High Court or the NCLT, the amalgamating entity comes
to be dissolved by operation of law. It was contended that the
dissolution of the amalgamating corporate entity occurs by virtue of the
NCLT or the High Court sanctioning the compromise or arrangement
and this by virtue of the provisions made in Sections 230 to 232 of the
Companies Act, 201314 and which contemplates a deemed dissolution
of the transferor company without the process of winding up being
resorted to. According to learned counsels who advanced submissions
on the writ petitions, the dissolution of the transferor company would
lead to the Court coming to the irresistible conclusion that it would
have ceased to exist in the eyes of law and thus any notice issued in its
name being a nullity.
12. According to the writ petitioners neither Section 159 nor Section
170 of the Act would save or validate a notice that may be issued in the
name of a transferor company which did not exist on the relevant date.
It was submitted that the Act itself contemplates a charge of tax being
imposed on an entity which is in existence on the date of issuance of
notice. The principal submission was that once that legal personality

14 2013 Act

which otherwise existed had ceased to remain in existence on the date
of issuance of notice, any proceedings drawn in its name or orders
passed would be wholly unsustainable in law and liable to be quashed.
13. According to the writ petitioners, the challenge on grounds
noticed above is no longer res integra and stands conclusively answered
by the Supreme Court in Maruti Suzuki. It becomes pertinent to note
that the judgment of the Supreme Court in Maruti Suzuki had come to
be rendered on an appeal which arose from a judgment of this Court
and which while upholding the decision rendered by the Tribunal had
held that an assessment made in the name of Suzuki Powertrain India
Ltd.15, and which had evidently under an approved Scheme
amalgamated with Maruti Suzuki India Ltd.16, was a nullity. On facts
it emerged that MSIL had duly intimated the AO of the amalgamation
prior to the case being selected for scrutiny assessment.
Notwithstanding that information being available, the AO appears to
have framed a draft assessment order in the name of SPIL.
14. It was in the aforesaid backdrop that the Supreme Court firstly
took note of an earlier decision of this Court in Spice Entertainment
Ltd. vs. Commissioner of Service Tax17, where it had been held that
an assessment made in the name of a transferor company would be void
ab initio and could not possibly be viewed as a procedural defect
curable or rectifiable under Section 292B of the Act. This becomes
evident from the following conclusions which came to be rendered:

15 SPIL

16 MSIL

17 2011 SCC OnLine Del 3210

11. After the sanction of the scheme on 11th April, 2004, the Spice
ceases to exit w.e.f. 1st July, 2003. Even if Spice had filed the

returns, it became incumbent upon the Income tax authorities to
substitute the successor in place of the said dead person. When
notice under Section 143(2) was sent, the appellant/amalgamated
company appeared and brought this fact to the knowledge of the AO.
He, however, did not substitute the name of the appellant on record.
Instead, the Assessing Officer made the assessment in the name of
M/s Spice which was non existing entity on that day. In such
proceedings and assessment order passed in the name of M/s Spice
would clearly be void. Such a defect cannot be treated as procedural
defect. Mere participation by the appellant would be of no effect as
there is no estoppel against law.

15. The Special Leave Petition which was taken against the
judgment in Spice Entertainment came to be dismissed by the Supreme
Court in Commissioner of Income Tax, New Delhi vs. Spice
Enfotainment Ltd.18 in the following terms:

18 (2020) 18 SCC 353

Delay condoned. Heard the learned Senior Counsel appearing for
the parties. We do not find any reason to interfere with the impugned
judgment(s) [Spice Entertainment Ltd. v. Commr. of Service Tax,
2011 SCC OnLine Del 3210 : (2012) 280 ELT
43] , [CIT v. Dimension Apparels (P) Ltd., 2014 SCC OnLine Del
7588 : (2015) 370 ITR 288] , [CIT v. Chanakaya Exports (P) Ltd.,
2014 SCC OnLine Del 7678] , [CIT v. Chanakaya Exports (P) Ltd.,
ITA No. 721 of 2014, order dated 24-11-2014 (Del)] , [CIT v. Radha
Appearals (P) Ltd., 2015 SCC OnLine Del 14568] ,[CIT v. Intel
Technology (India) (P) Ltd., 2015 SCC OnLine Kar
9493] , [CIT v. Chanakaya Exports (P) Ltd., 2015 SCC OnLine Del
14567] , [CIT v. Mayank Traders (P) Ltd., 2015 SCC OnLine Del
14633] , [CIT v. P.D. Associates (P) Ltd., 2015 SCC OnLine Del
14632] , [CIT v. Foryu Overseas (P) Ltd., 2015 SCC OnLine Del
14566] , [CIT v. Sapient Consulting Ltd., 2016 SCC OnLine Del
6615] passed by the High Court. In view of this, we find no merit in
the appeals and special leave petitions. Accordingly, the appeals and
special leave petitions are dismissed.

16. The aspect of an assessment coming to be framed in the name of
a company which stood dissolved consequent to amalgamation appears
to have arisen for consideration of this Court yet again in Sky Light

ITA 116/2023 & other connected matters Page 23 of 52
Hospitality LLP vs. Assistant Commissioner of Income Tax19. The
Sky Light Hospitality Court held that a defect in recording the name of a
non-existent company would constitute a procedural error which could
be cured under Section 292B of the Act. The appeal taken against that
decision to the Supreme Court came to be dismissed in Skylight
Hospitality LLP vs. Assistant Commissioner of Income Tax20
In the peculiar facts of this case, we are convinced that wrong name
given in the notice was merely a clerical error which could be
corrected under Section 292-B of the Income Tax Act. The special
leave petition is dismissed. Pending applications stand disposed of.
in the
following terms:-
17. In Maruti Suzuki it appears to have been urged by and on behalf
of the Revenue that the decision in Spice Entertainment would not hold
good in light of the decision which our High Court had pronounced in
Sky Light Hospitality and which had come to be affirmed by the
Supreme Court. Dealing with the aforesaid contention, the Supreme
Court in Maruti Suzuki observed as follows:
28. The submission, however, which has been urged on behalf of
the Revenue is that a contrary position emerges from the decision of
the Delhi High Court in Skylight Hospitality LLP [Skylight
Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405
ITR 296] which was affirmed on 6-4-2018 [Skylight Hospitality
LLP v. CIT, (2018) 13 SCC 147] by a two-Judge Bench of this Court
consisting of Hon’ble Mr Justice A.K. Sikri and Hon’ble Mr Justice
Ashok Bhushan. In assessing the merits of the above submission, it
is necessary to extract the order dated 6-4-2018 [Skylight Hospitality
LLP v. CIT, (2018) 13 SCC 147] of this Court : (Skylight Hospitality
case[Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] , SCC p.
147, para 1)
1. In the peculiar facts of this case, we are convinced that
wrong name given in the notice was merely a clerical error
which could be corrected under Section 292-B of the
Income Tax Act. The special leave petition is dismissed.
19 2018 SCC OnLine Del 7155
20 (2018) 13 SCC 147

Pending applications stand disposed of.

Now, it is evident from the above extract that it was in the peculiar
facts of the case that this Court indicated its agreement that the
wrong name given in the notice was merely a clerical error, capable
of being corrected under Section 292-B. The peculiar facts of
Skylight Hospitality emerge from the decision of the Delhi High
Court [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155:
(2018) 405 ITR 296]. Skylight Hospitality, an LLP, had taken over
on 13-5-2016 and acquired the rights and liabilities of Skylight
Hospitality Pvt. Ltd. upon conversion under the Limited Liability
Partnership Act, 2008 (the LLP Act, 2008). It instituted writ
proceedings for challenging a notice under Sections 147/148 of the
1961 Act dated 30-3-2017 for AY 2010-2011. The reasons to
believe made a reference to a tax evasion report received from the
investigation unit of the Income Tax Department. The facts were
ascertained by the investigation unit. The reasons to believe referred
to the assessment order for AY 2013-2014 and the findings recorded
in it. Though the notice under Sections 147/148 was issued in the
name of Skylight Hospitality Pvt. Ltd. (which had ceased to exist
upon conversion into an LLP), there was, as the Delhi High Court
held substantial and affirmative material and evidence on record to
show that the issuance of the notice in the name of the dissolved
company was a mistake. The tax evasion report adverted to the
conversion of the private limited company into an LLP. Moreover,
the reasons to believe recorded by the assessing officer adverted to
the approval of the Principal Commissioner. The PAN number of
LLP was also mentioned in some of the documents. The notice under
Sections 147/148 was not in conformity with the reasons to believe
and the approval of the Principal Commissioner. It was in this
background that the Delhi High Court held that the case fell within
the purview of Section 292-B for the following reasons : (Skylight
Hospitality case [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine
Del 7155 : (2018) 405 ITR 296], SCC OnLine Del para 18)

18. There was no doubt and debate that the notice was
meant for the petitioner and no one else. Legal error and
mistake was made in addressing the notice. Noticeably, the
appellant having received the said notice, had filed without
prejudice reply/letter dated 11-4-2017. They had objected to
the notice being issued in the name of the Company, which
had ceased to exist. However, the reading of the said letter
indicates that they had understood and were aware, that the
notice was for them. It was replied and dealt with by them.
The fact that notice was addressed to M/s Skylight
Hospitality Pvt. Ltd., a company which had been dissolved,
was an error and technical lapse on the part of the
respondent. No prejudice was caused.

29. The decision in Spice Entertainment [Spice Entertainment
Ltd. v. Commr. of Service Tax, 2011 SCC OnLine Del 3210 : (2012)
280 ELT 43] was distinguished with the following observations :
(Skylight Hospitality case [Skylight Hospitality LLP v. CIT, 2018
SCC OnLine Del 7155 : (2018) 405 ITR 296] , SCC OnLine Del
para 19)

19. Petitioner relies on Spice Infotainment v. CIT [ This
judgment has also been referred to as Spice Infotainment
Ltd. v. CIT, (2012) 247 CTR (Del) 500] . Spice Corp. Ltd.,
the company that had filed the return, had amalgamated
with another company. After notice under Sections 147/148
of the Act was issued and received in the name of Spice
Corp. Ltd., the assessing officer was informed about
amalgamation but the assessment order was passed in the
name of the amalgamated company and not in the name of
amalgamating company. In the said situation, the
amalgamating company had filed an appeal and issue of
validity of assessment order was raised and examined. It
was held that the assessment order was invalid. This was
not a case wherein notice under Sections 147/148 of the Act
was declared to be void and invalid but a case in which
assessment order was passed in the name of and against a
juristic person which had ceased to exist and stood
dissolved as per provisions of the Companies Act. Order
was in the name of non-existing person and hence void and
illegal.

30. From a reading of the order of this Court dated 6-4-2018
[Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] in the special
leave petition filed by Skylight Hospitality LLP against the judgment
of the Delhi High Court rejecting its challenge, it is evident that the
peculiar facts of the case weighed with this Court in coming to this
conclusion that there was only a clerical mistake within the meaning
of Section 292-B. The decision in Skylight Hospitality LLP [Skylight
Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405
ITR 296] has been distinguished by the Delhi, Gujarat and Madras
High Courts in:

(i) Rajender Kumar Sehgal [Rajender Kumar Sehgal v. CIT, 2018
SCC OnLine Del 12890];

(ii) Chandreshbhai Jayantibhai Patel [Chandreshbhai Jayantibhai
Patel v. CIT, 2018 SCC OnLine Guj 4812]; and

(iii) Alamelu Veerappan [Alamelu Veerappan v. CIT, 2018 SCC
OnLine Mad 13593] .

31. There is no conflict between the decisions of this Court in Spice
Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353]
(dated 2-11-2017) and in Skylight Hospitality LLP v. CIT [Skylight
Hospitality LLP v. CIT, (2018) 13 SCC 147] (dated 6-4-2018).

18. Arguments flowing on lines similar to those which were
addressed before us in this batch appear to have been urged before the
Supreme Court in Maruti Suzuki with it being argued that a notice in
the name of a company which stood dissolved would be a curable
mistake and that in any case, Section 170 of the Act would save those
notices. This becomes apparent from a reading of paragraphs 32 and 33
of the report which are extracted hereinbelow:

32. Mr Zoheb Hossain, learned counsel appearing on behalf of the
Revenue urged during the course of his submissions that the notice
that was in issue in Skylight Hospitality Pvt. Ltd. was under Sections
147 and 148. Hence, he urged that despite the fact that the notice is
of a jurisdictional nature for reopening an assessment, this Court did
not find any infirmity in the decision of the Delhi High Court
holding that the issuance of a notice to an erstwhile private limited
company which had since been dissolved was only a mistake curable
under Section 292-B. A close reading of the order of this Court dated
6-4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] ,
however indicates that what weighed in the dismissal of the special
leave petition were the peculiar facts of the case. Those facts have
been noted above. What had weighed with the Delhi High Court was
that though the notice to reopen had been issued in the name of the
erstwhile entity, all the material on record including the tax evasion
report suggested that there was no manner of doubt that the notice
was always intended to be issued to the successor entity. Hence,
while dismissing the special leave petition this Court observed that it
was the peculiar facts of the case which led the Court to accept the
finding that the wrong name given in the notice was merely a
technical error which could be corrected under Section 292-B. Thus,
there is no conflict between the decisions in Spice
Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353]
on the one hand and Skylight Hospitality LLP [Skylight Hospitality
LLP v. CIT, (2018) 13 SCC 147] on the other hand. It is of relevance
to refer to Section 292-B of the Income Tax Act which reads as
follows:

292-B. Return of income, etc., not to be invalid on certain
grounds.No return of income, assessment, notice,

summons or other proceeding, 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
proceeding if such return of income, assessment, notice,
summons or other proceeding is in substance and effect in
conformity with or according to the intent and purpose of
this Act.

In this case, the notice under Section 143(2) under which jurisdiction
was assumed by the assessing officer was issued to a non-existent
company. The assessment order was issued against the
amalgamating company. This is a substantive illegality and not a
procedural violation of the nature adverted to in Section 292-B.

33. In this context, it is necessary to advert to the provisions of
Section 170 which deal with succession to business otherwise than
on death. Section 170 provides as follows:

170. Succession to business otherwise than on death.

(1) Where a person carrying on any business or profession
(such person hereinafter in this section being referred to as
the predecessor) has been succeeded therein by any other
person (hereinafter in this section referred to as the
successor) who continues to carry on that business or
profession

(a) the predecessor shall be assessed in respect of the
income of the previous year in which the succession took
place up to the date of succession;

(b) the successor shall be assessed in respect of the income
of the previous year after the date of succession.

(2) Notwithstanding anything contained in sub-section (1),
when the predecessor cannot be found, the assessment of
the income of the previous year in which the succession
took place up to the date of succession and of the previous
year preceding that year shall be made on the successor in
like manner and to the same extent as it would have been
made on the predecessor, and all the provisions of this Act
shall, so far as may be, apply accordingly.

(3) When any sum payable under this section in respect of
the income of such business or profession for the previous
year in which the succession took place up to the date of
succession or for the previous year preceding that year,
assessed on the predecessor, cannot be recovered from him,
the assessing officer shall record a finding to that effect and

the sum payable by the predecessor shall thereafter be
payable by and recoverable from the successor and the
successor shall be entitled to recover from the predecessor
any sum so paid.

(4) Where any business or profession carried on by a Hindu
undivided family is succeeded to, and simultaneously with
the succession or after the succession there has been a
partition of the joint family property between the members
or groups of members, the tax due in respect of the income
of the business or profession succeeded to, up to the date of
succession, shall be assessed and recovered in the manner
provided in Section 171, but without prejudice to the
provisions of this section.

Explanation.For the purposes of this section, income
includes any gain accruing from the transfer, in any manner
whatsoever, of the business or profession as a result of the
succession.

19. The Supreme Court in Maruti Suzuki ultimately held:

36. In the present case, despite the fact that the assessing officer
was informed of the amalgamating company having ceased to exist
as a result of the approved scheme of amalgamation, the
jurisdictional notice was issued only in its name. The basis on which
jurisdiction was invoked was fundamentally at odds with the legal
principle that the amalgamating entity ceases to exist upon the
approved scheme of amalgamation. Participation in the proceedings
by the appellant in the circumstances cannot operate as an estoppel
against law. This position now holds the field in view of the
judgment of a coordinate Bench of two learned Judges which
dismissed the appeal of the Revenue in Spice
Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353]
on 2-11-2017. The decision in Spice Enfotainment [CIT v. Spice
Enfotainment Ltd., (2020) 18 SCC 353] has been followed in the
case of the respondent while dismissing the special leave petition for
AY 2011-2012. In doing so, this Court has relied on the decision
in Spice Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18
SCC 353].

37. We find no reason to take a different view. There is a value
which the Court must abide by in promoting the interest of certainty
in tax litigation. The view which has been taken by this Court in
relation to the respondent for AY 2011-2012 must, in our view be
adopted in respect of the present appeal which relates to AY 2012-
2013. Not doing so will only result in uncertainty and displacement
of settled expectations. There is a significant value which must
attach to observing the requirement of consistency and certainty.

Individual affairs are conducted and business decisions are made in
the expectation of consistency, uniformity and certainty. To detract
from those principles is neither expedient nor desirable.

20. As is evident from the above, Maruti Suzuki came to affirm the
view which was expressed by this Court in Spice Entertainment. The
Court in Spice Entertainment had identified the principal question to be
whether the provisions of Section 292B could be invoked to salvage a
situation where an assessment comes to be framed in the name of the
transferor company. The Court was called upon to examine whether
such an order of assessment would be a nullity or one which could be
viewed as suffering from a procedural defect which could be validated
by invoking Section 292B. Dealing with this aspect, the Court in Spice
Entertainment had observed as follows:-

8. A company incorporated under the Indian Companies Act is a
juristic person. It takes its birth and gets life with the incorporation.
It dies with the dissolution as per the provisions of the Companies
Act. It is trite law that on amalgamation, the amalgamating company
ceases to exist in the eyes of law. This position is even accepted by
the Tribunal in para-14 of its order extracted above. Having regard
this consequence provided in law, in number of cases, the Supreme
Court held that assessment upon a dissolved company is
impermissible as there is no provision in Income-Tax to make an
assessment thereupon. In the case of Saraswati Industrial Syndicate
Ltd. v. CIT, 186 ITR 278 the legal position is explained in the
following terms:

The question is whether on the amalgamation of the Indian
Sugar Company with the appellant Company, the Indian
Sugar Company continued to have its entity and was alive
for the purposes of Section 41(1) of the Act. The
amalgamation of the two companies was effected under the
order of the High Court in proceedings under Section 391
read with Section 394 of the Companies Act. The Saraswati
Industrial Syndicate, the trans free Company was a
subsidiary of the Indian Sugar Company, namely, the
transferor Company. Under the scheme of amalgamation the
Indian Sugar Company stood dissolved on 29th October,
1962 and it ceased to be in existence thereafter. Though the
scheme provided that the transferee Company the Saraswati

Industrial Syndicate Ltd. undertook to meet any liability of
the Indian Sugar Company which that Company incurred or
it could incur, any liaiblity, before the dissolution or not
thereafter.

Generally, where only one Company is involved in change
and the rights of the share holders and creditors are varied,
it amounts to reconstruction or reorganisation or scheme of
arrangement. In amalgamation two or more companies are
fused into one by merger or by taking over by another.
Reconstruction or amalgamation has no precise legal
meaning. The amalgamation is a blending of two or more
existing undertakings into one undertaking, the share
holders of each blending Company become substantially the
share holders in the Company which is to carry on the
blended undertakings. There may be amalgamation either
by the transfer of two or more undertakings to a new
Company, or by the transfer of one or more undertakings to
an existing Company. Strictly amalgamation does not cover
the mere acquisition by a Company of the share capital of
other Company which remains in existence and continues
its undertaking but the context in which the term is used
may show that it is intended to include such an acquisition.
See Halsburys Laws of England 4thEdition Vol. 7 Para
1539. Two companies may join to form a new Company,
but there may be absorption or blending of one by the other,
both amount to amalgamation. When two companies are
merged and are so joined, as to form a third Company or
one is absorbed into one or blended with another, the
amalgamating Company loses its entity.

9. The Court referred to its earlier judgment in General Radio and
Appliances Co. Ltd. v. M.A. Khader (1986) 60 Comp Case 1013. In
view of the aforesaid clinching position in law, it is difficult to digest
the circuitous route adopted by the Tribunal holding that the
assessment was in fact in the name of amalgamated company and
there was only a procedural defect.

10. Section 481 of the Companies Act provides for dissolution of the
company. The Company Judge in the High Court can order
dissolution of a company on the grounds stated therein. The effect of
the dissolution is that the company no more survives. The dissolution
puts an end to the existence of the company. It is held in M.H. Smith
(Plant Hire) Ltd. v. D.L. Mainwaring (T/A Inshore), 1986 BCLC 342
(CA) that once a company is dissolved it becomes a non-existent
party and therefore no action can be brought in its name. Thus an
insurance company which was subrogated to the rights of another
insured company was held not to be entitled to maintain an action in

the name of the company after the latter had been dissolved.

11. After the sanction of the scheme on 11th April, 2004, the Spice
ceases to exit w.e.f. 1st July, 2003. Even if Spice had filed the
returns, it became incumbent upon the Income tax authorities to
substitute the successor in place of the said dead person. When
notice under Section 143(2) was sent, the appellant/amalgamated
company appeared and brought this fact to the knowledge of the AO.
He, however, did not substitute the name of the appellant on record.
Instead, the Assessing Officer made the assessment in the name of
M/s Spice which was non existing entity on that day. In such
proceedings and assessment order passed in the name of M/s Spice
would clearly be void. Such a defect cannot be treated as procedural
defect. Mere participation by the appellant would be of no effect as
there is no estoppel against law.

12. Once it is found that assessment is framed in the name of non-
existing entity, it does not remain a procedural irregularity of the
nature which could be cured by invoking the provisions of Section
292B of the Act. Section 292B of the Act reads as under: –

292B. No return of income assessment, notice, summons
or other proceedings furnished or made or issue 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 reasons
of any mistake, defect or omission in such return of income,
assessment, notice, summons or other proceeding 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 this Act.

13. The Punjab & Haryana High Court stated the effect of this
provision in CIT v. Norton Motors, 275 ITR 595 in the following
manner: –

A reading of the above reproduced provision makes it clear
that a mistake, defect or omission in the return of income,
assessment, notice, summons or other proceeding is not
sufficient to invalidate an action taken by the competent
authority, provided that such return of income, assessment,
notice, summons or other proceeding is in substance and
effect in conformity with or according to the provisions of
the Act. To put it differently, Section 292B can be relied
upon for resisting a challenge to the notice, etc., only if
there is a technical defect or omission in it. However, there
is nothing in the plain language of that section from which it
can be inferred that the same can be relied upon for curing a
jurisdictional defect in the assessment notice, summons or
other proceeding. In other words, if the notice, summons or

other proceeding taken by an authority suffers from an
inherent lacuna affecting his/its jurisdiction, the same
cannot be cured by having resort to Section 292B.

14. The issue again cropped up before the Court in CIT v. Harjinder
Kaur (2009) 222 CTR 254 (P&H). That was a case where return in
question filed by the assessee was neither signed by the assessee nor
verified in terms of the mandate of Section 140 of the Act. The Court
was of the opinion that such a return cannot be treated as return even
a return filed by the assessee and this inherent defect could not be
cured inspite of the deeming effect of Section 292B of the Act.
Therefore, the return was absolutely invalid and assessment could
not be made on a invalid return. In the process, the Court observed as
under: –

Having given our thoughtful consideration to the
submission advanced by the learned Counsel for the
appellant, we are of the view that the provisions of Section
292B of the 1961 Act do not authorize the AO to ignore a
defect of a substantive nature and it is, therefore, that the
aforesaid provision categorically records that a return would
not be treated as invalid, if the same in substance and
effect is in conformity with or according to the intent and
purpose of this Act. Insofar as the return under reference is
concerned, in terms of Section 140 of the 1961 Act, the
same cannot be treated to be even a return filed by the
respondent assessee, as the same does not even bear her
signatures and had not even been verified by her. In the
aforesaid view of the matter, it is not possible for us to
accept that the return allegedly filed by the assessee was in
substance and effect in conformity with or according to the
intent and purpose of this Act. Thus viewed, it is not
possible for us to accept the contention advanced by the
learned Counsel for the appellant on the basis of Section
292B of the 1961 Act. The return under reference, which
had been taken into consideration by the Revenue, was an
absolutely invalid return as it had a glaring inherent defect
which could not be cured in spite of the deeming effect of
Section 292B of the 1961 Act.

15. Likewise, in the case of Sri Nath Suresh Chand Ram
Naresh v. CIT (2006) 280 ITR 396, the Allahabad High Court held
that the issue of notice under Section 148 of the Income Tax Act is a
condition precedent to the validity of any assessment order to be
passed under section 147 of the Act and when such a notice is not
issued and assessment made, such a defect cannot be treated as cured
under Section 292B of the Act. The Court observed that this
provisions condones the invalidity which arises merely by mistake,

defect or omission in a notice, if in substance and effect it is in
conformity with or according to the intent and purpose of this Act.
Since no valid notice was served on the assessee to reassess the
income, all the consequent proceedings were null and void and it
was not a case of irregularity. Therefore, Section 292B of the Act
had no application.

16. When we apply the ratio of aforesaid cases to the facts of this
case, the irresistible conclusion would be provisions of Section 292B
of the Act are not applicable in such a case. The framing of
assessment against a non-existing entity/person goes to the root of
the matter which is not a procedural irregularity but a jurisdictional
defect as there cannot be any assessment against a dead person.

17. The order of the Tribunal is, therefore, clearly unsustainable. We,
thus, decide the questions of law in favour of the assessee and
against the Revenue and allow these appeals.

21. A few years after Spice Entertainment, a similar question arose
yet again in Sky Light Hospitality. Our Court on that occasion came to
the conclusion that the mistake in that particular case was a technical
error which could be attended to and saved by virtue of Section 292B of
the Act. However, and as the Supreme Court itself had an occasion to
note in Maruti Suzuki, the Court while coming to hold that Section
292B would apply, had pertinently observed that the material on record
was indicative of the Revenue having always intended the notice to be
addressed to the successor entity. It becomes pertinent to note that the
Court in Sky Light Hospitality had alluded to substantial and
affirmative material and evidence on record which indicated that the
issuance of the notice in the name of the dissolved entity was a mistake.
In arriving at that conclusion, it had not only borne in consideration the
material which existed on the record as also the tax evasion report
which had duly taken note of the conversion of the Private Limited
Company into an LLP. It is thus apparent that Sky Light Hospitality
came to be rendered in its own peculiar facts. It was in the aforesaid

factual backdrop that the Supreme Court in Maruti Suzuki ultimately
came to hold that there was no apparent conflict between Spice
Entertainment and Sky Light Hospitality with the latter turning upon its
individual facts.
22. However, the sheet anchor of the submission of the respondents
was, as noticed in the prefatory parts of this decision, the judgment in
Mahagun Realtors. However, and as was noticed by a Division Bench
of our Court in Commissioner of Income Tax vs Sony Mobile
Communications India Pvt. Ltd.21, and which decision we shall
advert to a little later, that decision of the Supreme Court itself turned
upon the facts of that particular case.
23. In Mahagun Realtors, while expounding upon the effect of
merger of two corporate entities consequent to a Scheme of
Arrangement being sanctioned, the Supreme Court pertinently
observed:-

21 2023 SCC OnLine Del 1231

18. Amalgamation, thus, is unlike the winding up of a corporate
entity. In the case of amalgamation, the outer shell of the corporate
entity is undoubtedly destroyed ; it ceases to exist. Yet, in every
other sense of the term, the corporate venture continues – enfolded
within the new or the existing transferee entity. In other words, the
business and the adventure lives on but within a new corporate
residence, i.e., the transferee-company. It is, therefore, essential to
look beyond the mere concept of destruction of corporate entity
which brings to an end or terminates any assessment proceedings.
There are analogies in civil law and procedure where upon
amalgamation, the cause of action or the complaint does not per se
cease- depending of course, upon the structure and objective of
enactment. Broadly, the quest of legal systems and courts has been to
locate if a successor or representative exists in relation to the
particular cause or action, upon whom the assets might have
devolved or upon whom the liability in the event it is adjudicated,
would fall.

24. It also noticed the principles which had been spelt out with
respect to a Scheme of Arrangement and its impact on a transferor
company as was elaborated in Marshall Sons and Co. (India) Ltd. vs.
Income Tax Officer22 as would be evident from paragraph 22 of the
report:-

22 (1997) 2 SCC 302

22. The effect of amalgamation in the context of Income-tax, was
again considered in another earlier decision, i.e., Marshall Sons and
Co. (India) Ltd. v. ITO. There, the court held that:

“14. Every scheme of amalgamation has to necessarily
provide a date with effect from which the
amalgamation/transfer shall take place. The scheme
concerned herein does so provide, viz., January 1, 1982. It
is true that while sanctioning the scheme, it is open to the
court to modify the said date and prescribe such date of
amalgamation/transfer as it thinks appropriate in the facts
and circumstances of the case. If the court so specifies a
date, there is little doubt that such date would be the date of
amalgamation/date of transfer. But where the court does not
prescribe any specific date but merely sanctions the scheme
presented to it – as has happened in this case – it should
follow that the rate of amalgamation/date of transfer is the
date specified in the scheme as ‘the transfer date’. It cannot
be otherwise. It must be remembered that before applying to
the court under section 391(1), a scheme has to be framed
and such scheme has to contain a date of
amalgamation/transfer. The proceedings before the court
may take some time ; indeed, they are bound to take some
time because several steps provided by sections 391 to
394A and the relevant Rules have to be followed and
complied with. During the period the proceedings are
pending before the court, both the amalgamation units, i.e.,
the transferor-company and the transferee-company may
carry on business, as has happened in this case but normally
provision is made for this aspect also in the scheme of
amalgamation. In the present scheme, clause 6(b) does
expressly provide that with effect from the transfer date, the
transferor company (subsidiary company) shall be deemed
to have carried on the business for and on behalf of the
transferee company (holding company) with all attendant
consequences. It is equally relevant to notice that the courts
have not only sanctioned the scheme in this case but have

also not specified any other date as the date of
transfer/amalgamation. In such a situation, it would not be
reasonable to say that the scheme of amalgamation takes
effect on and from the date of the order sanctioning the
scheme. We are, therefore, of the opinion that the notices
issued by the Income-tax Officer (impugned in the writ
petition) were not warranted in law. The business carried on
by the transferor company (subsidiary company) should be
deemed to have been carried on for and on behalf of the
transferee company. This is the necessary and the logical
consequence of the court sanctioning the scheme of
amalgamation as presented to it. The order of the court
sanctioning the scheme, the filing of the certified copies of
the orders of the court before the Registrar of Companies,
the allotment of shares etc. may have all taken place
subsequent to the date of amalgamation/transfer, yet the
date of amalgamation in the circumstances of this case
would be January 1, 1982. This is also the ratio of the
decision of the Privy Council in Raghubar Dayal v. Bank of
Upper India Ltd. AIR 1919 PC 9, relied on.

Counsel for the Revenue contended that if the aforesaid
view is adopted then several complications will ensue in
case the court refuses to sanction the scheme of
amalgamation. We do not see any basis for this
apprehension. Firstly, an assessment can always be made
and is supposed to be made on the transferee company
taking into account the income of both the transferor and
transferee company. Secondly, and probably the more
advisable course from the point of view of the Revenue
would be to make one assessment on the transferee
company taking into account the income of both, of
transferor or transferee companies and also to make separate
protective assessments on both the transferor and transferee
companies separately. There may be a certain practical
difficulty in adopting this course inasmuch as separate
balance-sheets may not be available for the transferor and
transferee companies. But that may not be an insuperable
problem inasmuch as assessment can always be made, on
the available material, even without a balance-sheet. In
certain cases, best-judgment assessment may also be
resorted to. Be that as it may, we need not pursue this line
of enquiry because it does not arise for consideration in
these cases directly.” (emphasis supplied)

23. Many High Courts in recent years, had mostly relied upon
Saraswati Syndicate which was a case where the transferor entity
had claimed a certain relief on the basis of the agreed method of

accounting. The corresponding obligation to recognise the demands
was sought to be disallowed in the subsequent year, in the case of the
then transferee-company. The decision of the Delhi High Court, in
Spice (supra), after discussing the decision in Saraswati Syndicate,
went on to explain why assessing an amalgamating-company,
without framing the order in the name of the transferee company is
fatal:

25. The Supreme Court proceeded to record its conclusions in this
respect in the following terms:-

30. The combined effect, therefore, of section 394(2) of the
Companies Act, 1956, section 2(1A) and various other p