Assessment Proceedings Against Non-Existent Amalgamated Company Held Void { Inox Wind Energy Ltd. vs. Additional/Joint/Deputy/Assistant Commissioner of Income-tax/Income-tax Officer [2023] 148 taxmann.com 289 (Gujarat)/[2023] 454 ITR 162 (Gujarat)}
Facts
- Assessee company had amalgamated with another company pursuant to a scheme approved by the NCLT/High Court.
- The amalgamated company had duly informed the Assessing Officer about the amalgamation and provided all relevant documents.
- Despite being aware of the amalgamation, the Assessing Officer issued a show cause notice-cum-draft assessment order in the name of the erstwhile amalgamating company, which had ceased to exist.
- Department argued that the defect was merely procedural and curable under Section 292B of the Income-tax Act.
Issue
Whether a show cause notice and draft assessment order issued in the name of a non-existing/amalgamated company is void in law, or whether such defect can be cured under Section 292B of the Income-tax Act.
Held
The Gujarat High Court held that:
- Once a company ceases to exist due to amalgamation, any proceedings initiated in its name are invalid and without jurisdiction.
- Since the Assessing Officer was already informed about the amalgamation, issuance of notice in the name of the non-existent entity was a substantive illegality and not a mere procedural defect.
- Such defect cannot be cured under Section 292B.
- Accordingly, the show cause notice and draft assessment order issued in the name of the non-existent company were quashed.
