STATE BANK OF INDIA,MUMBAI vs. ACIT- 2(2)(1), MUMBAI

आदेश / ORDER PER BENCH:

Present cross appeals are directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-5, Mumbai [hereinafter referred to as "Ld. CIT(A)"] dated 22/03/2019 for A.Y. 2016-17.

“1. The assessment order dated 27 March 2018 issued under section 143(3) of the Act is bad in law and invalid: 1.1 The learned ACIT erred in proceeding to frame an assessment on State Bank of Mysore (PAN AACS155P) under section 143(3) without appreciating that erstwhile State Bank of Mysore is amalgamated into State Bank of India on 1 April 2017 as a result of the Government of India Notification no. 128 dated 22 February 2017. 1.2 The learned ACIT failed to appreciate that there cannot be any assessment against a non-existent assessee and accordingly, the assessment order passed by the ACT on a non-existent entity, viz. State Bank of Mysore, which entity has ceased to exist as on the date of the assessment order, is invalid and thereby rendering the entire assessment proceedings void ab initio and hence ought to be set aside. 2. General:

ITA 3412 & 3413/MUM/2019 STATE BANK OF INDIA (SUCCESSOR TO STATE BANK OF MYSORE) 2.1. 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.” 2.1. The Ld. AR submitted that the additional ground raises a pure question of law challenging the validity of the assessment framed in the name of a non-existent entity and, therefore, deserves to be admitted in terms of the decision of the Hon'ble Supreme Court in National Thermal Power Co. Ltd. vs. CIT reported in (229 ITR 383). 2.1.1. It was submitted that the erstwhile State Bank of Mysore stood amalgamated with State Bank of India with effect from 01/04/2017 pursuant to the Government of India Notification dated 22/02/2017. The assessment order, however, was passed on 27/03/2018 in the name of State Bank of Mysore, which had ceased to exist on the date of the assessment. Referring to the first paragraph of the assessment order, the Ld. AR submitted that the Ld. AO himself had acknowledged the amalgamation and was fully aware of the fact that the assessee had ceased to exist. It was, therefore, contended that the assessment framed in the name of a non-existent entity is void ab initio and suffers from an incurable jurisdictional defect. Reliance was placed on the decision of the Hon'ble Supreme Court in Principal CIT vs. Maruti Suzuki India Ltd. [(2019) 416 ITR 613 (SC)] and various decisions of the Co-ordinate Bench of the ITAT.

2.2. Per contra, the Ld. DR supported the orders of the authorities below. It was submitted that the assessment proceedings were initiated after issuing statutory notices and the amalgamated entity had participated in the assessment proceedings by filing replies and furnishing details from time to time without raising any objection regarding the status of the assessee. It was contended

ITA 3412 & 3413/MUM/2019 STATE BANK OF INDIA (SUCCESSOR TO STATE BANK OF MYSORE) that the assessment was, in substance, made in respect of the business of the amalgamated entity and, therefore, the mere mention of the name of the erstwhile State Bank of Mysore would not invalidate the assessment. The Ld. DR submitted that the defect, if any, was merely procedural and stood cured by the provisions of section 292B of the Act. It was, therefore, prayed that the additional ground raised by the assessee be rejected and the assessment order be upheld.

We have perused the submissions advanced by both sides in light of the records placed before us.

4.1. From the assessment order itself, we note that the Ld. AO has categorically recorded that, pursuant to the Government of India

ITA 3412 & 3413/MUM/2019 STATE BANK OF INDIA (SUCCESSOR TO STATE BANK OF MYSORE) Notification No. GSR 158(E) dated 22/02/2017, published in the Gazette of India No.128 dated 22/02/2017, the erstwhile State Bank of Mysore stood amalgamated with State Bank of India with effect from 01/04/2017. The assessment order further records that the scrutiny proceedings were initiated thereafter by issuance of notice u/s 143(2) dated 03/07/2017, i.e., after the effective date of amalgamation. Thus, it is an admitted position on record that the Assessing Officer was fully aware of the fact that the amalgamating company had ceased to exist on the date of issuance of the statutory notice as well as on the date of passing of the assessment order.

4.2. Despite having such knowledge, the assessment has been framed in the name of State Bank of Mysore, an entity which had ceased to exist in the eyes of law. It is a settled proposition that upon amalgamation, the amalgamating company loses its independent legal existence and ceases to exist. Consequently, any assessment framed in the name of such non-existent entity is without jurisdiction and void ab initio.

4.2.1. We further note that the Government Gazette notification giving effect to the amalgamation was a public notification and was not a document which was required to be specifically furnished by the assessee for the information of the Revenue. It cannot, therefore, be contended that the assessee failed to bring the fact of amalgamation to the notice of the Assessing Officer by not furnishing the relevant Gazette notification before initiation or during the course of the assessment proceedings. At the time of amalgamation, the requisite approvals and No Objection Certificates from the concerned departments were also required to

ITA 3412 & 3413/MUM/2019 STATE BANK OF INDIA (SUCCESSOR TO STATE BANK OF MYSORE) be obtained in the proceedings before the Hon'ble High Court, wherein the Revenue would have been a concerned party and, consequently, the jurisdictional Assessing Officer could not reasonably be said to be unaware of the proposed amalgamation. Further, being public sector nationalised banks, the relevant information pertaining to their amalgamation was duly notified through the Official Gazette and was available in the public domain. The Revenue, therefore, cannot take a plea that the Assessing Officer was unaware of the fact of amalgamation. This position is further fortified by the assessment order itself, wherein, in the opening paragraph, the Assessing Officer has categorically recorded the fact of amalgamation of the erstwhile State Bank of Mysore with State Bank of India pursuant to the aforesaid Government Notification.

4.3. The Hon'ble Supreme Court in Principal CIT vs. Maruti Suzuki India Ltd. [(2019) 416 ITR 613 (SC)] has categorically held that an assessment framed in the name of a non-existent entity after its amalgamation is a substantive illegality which goes to the root of the jurisdiction of the Assessing Officer and is not a mere procedural defect curable u/s 292B of the Act. The Hon'ble Supreme Court, while affirming the decision of the Hon'ble Delhi High Court in Spice Entertainment Ltd. vs. CIT [(2012) 247 CTR 500 (Del.)], held that participation in the assessment proceedings by the amalgamated company would not validate an assessment framed against a non-existent entity. Similar view has also been taken by the Hon'ble Delhi High Court in Dimension Apparels (P.) Ltd. vs. ITO [(2015) 370 ITR 288 (Del.)].

ITA 3412 & 3413/MUM/2019 STATE BANK OF INDIA (SUCCESSOR TO STATE BANK OF MYSORE) Similar is the view taken by the Co-ordiante Bench of ITAT in the case of State Bank of India (Successor to erstwhile State Bank of Indore) vs. DCIT in ITA Nos. 277, 278 & Ors. & ITA Nos. 410 , 411 & Ors. vide order dated 20/09/2022.

4.4. In the present case, the Revenue cannot contend that the Assessing Officer was unaware of the amalgamation. On the contrary, the assessment order itself acknowledges the amalgamation of State Bank of Mysore with State Bank of India with effect from 01/04/2017. Having accepted the fact of amalgamation, the Assessing Officer could not have continued the assessment proceedings in the name of an entity which had ceased to exist. Such an assessment suffers from an inherent jurisdictional defect and is liable to be quashed.

4.5. Respectfully following the ratio laid down by the Hon'ble Supreme Court in Maruti Suzuki India Ltd. (supra) and Spice Entertainment Ltd. (supra) and consistent with the view taken by the Co-ordinate Bench of the ITAT under identical circumstances, we hold that the assessment order dated 27/03/2018 passed u/s 143(3) of the Act in the name of State Bank of Mysore is void ab initio and liable to be quashed.

4.6. Since we have quashed the assessment itself, the remaining grounds raised by the assessee as well as the grounds raised by the Revenue on the merits of the additions have become merely academic and do not call for any adjudication.

Accordingly, the additional ground raised by the assessee is allowed. The assessment order is quashed.

ITA 3412 & 3413/MUM/2019 STATE BANK OF INDIA (SUCCESSOR TO STATE BANK OF MYSORE) In the result, the Revenue's appeal is dismissed as infructuous and the assessee's appeal is allowed.

Order pronounced in the open court on 17/08/2026.

Sd/- Sd/- JAGADISH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai Dated: 17/08/2026 SC, Sr. P.S.

ITA 3412 & 3413/MUM/2019 STATE BANK OF INDIA (SUCCESSOR TO STATE BANK OF MYSORE) Copy to: DCIT CIR 2(2)(1), R.NO. 545, 5TH FLOOR, AAYAKAR 1 BHAVAN, M.K.RD,, -400020, MAHARASHTRA STATE BANK OF INDIA (SUCCESSOR TO STATE BANK OF MYSORE), FINANCIAL REPORTING & TAX 2 DEPARTMENT, 3RD FLOOR, SBI BHAVAN, NARIMAN POINT., -400021, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE