OXYGEN BIO-RESEARCH PRIVATE LIMITED (NOW MERGED WITH PIRAMAL FINANCE LTD),MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -5(4), MUMBAI

At the outset, the learned counsel for the assessee raised a preliminary jurisdictional ground challenging the very validity of the reassessment proceedings. It was submitted that the assessment has been framed in the name of Oxygen Bio- Research Private Limited, though the said company had ceased to exist much prior to the initiation of the reassessment proceedings, having been amalgamated with Piramal Enterprises Limited pursuant to the Scheme of Amalgamation sanctioned by the Hon’ble Gujarat High Court vide order dated 10.12.2014, with the appointed date being 01.04.2014. It was thus contended that once the amalgamating company had lost its independent juristic existence, all proceedings initiated thereafter in its name, including the notice issued under section 148 and the consequential assessment framed under section 147 read with section 144, were wholly without jurisdiction and liable to be quashed.

Elaborating the aforesaid contention, the learned counsel invited our attention to the chronology of events placed in the paper book, wherein the dates of issuance of notice under section 148, notices under section 142(1), show-cause notices

The learned counsel further invited our attention to the reassessment proceedings relating to Assessment Year 2017- 18, wherein an identical issue had arisen. It was pointed out that after considering the very same objection regarding amalgamation and upon examining the order of the Hon’ble Gujarat High Court sanctioning the scheme of amalgamation, the National Faceless Assessment Centre accepted the legal position that the reassessment proceedings initiated against Oxygen Bio-Research Private Limited were unsustainable,

Per contra, the learned Departmental Representative relied upon the orders of the Assessing Officer and the learned CIT(A).

We have carefully considered the rival submissions, perused the orders of the authorities below and examined the material placed before us. The foundational facts giving rise to the present controversy are not in dispute. It is an admitted position that Oxygen Bio-Research Private Limited stood amalgamated with Piramal Enterprises Limited pursuant to the Scheme of Amalgamation sanctioned by the Hon’ble Gujarat High Court vide order dated 10.12.2014, with the appointed date being 01.04.2014. Consequently, from the said date, the amalgamating company ceased to have an independent legal existence. Therefore, on the date of issuance of notice under section 148 as well as on the date of completion of reassessment, the entity against whom the

The material placed before us further demonstrates that this was not a case where the Revenue could legitimately claim ignorance of the amalgamation. The chronology of events, coupled with the detailed communication dated 17.03.2022, clearly establishes that before completion of the reassessment proceedings the assessee had specifically informed the Assessing Officer about the amalgamation and had categorically objected to the continuation of reassessment proceedings in the name of Oxygen Bio-Research Private Limited. The assessee had also enclosed the order of the Hon’ble Gujarat High Court sanctioning the scheme of amalgamation and specifically requested that the reassessment proceedings be dropped as the notices had been issued to a non-existent entity. Thus, the Assessing Officer was fully aware of the correct factual and legal position. Nevertheless, he consciously proceeded to complete the reassessment in the very name of the amalgamating company, notwithstanding the fact that such company had ceased to exist years before the initiation of the proceedings.

Another significant circumstance emerging from the record is that in the reassessment proceedings for the immediately succeeding Assessment Year 2017-18, the National Faceless

Once it is found that the Assessing Officer had been specifically informed about the amalgamation and the consequent cessation of the legal existence of the assessee company, there remained no jurisdiction with him to continue the reassessment proceedings in the name of the amalgamating company. The defect is not one of mere procedural irregularity or misdescription of the assessee. It strikes at the very root of the jurisdiction assumed by the Assessing Officer, for the simple reason that the proceedings were continued and culminated in an assessment against an entity which had ceased to exist in the eyes of law. Such a foundational jurisdictional defect cannot be cured by invoking section 292B of the Act.

The issue is no longer res integra. The Hon’ble Supreme Court in PCIT v. Maruti Suzuki India Ltd. [(2019) 416 ITR 613 (SC)], after considering the entire law relating to amalgamation and the legal consequences flowing therefrom, has categorically held that an assessment framed in the name of a company which has ceased to exist on account of amalgamation is void ab initio and unsustainable in law. Their Lordships have further held that once the Revenue is informed of the amalgamation, continuation of proceedings against the amalgamating company constitutes a substantive jurisdictional defect and is not a curable irregularity. The ratio laid down by the Hon’ble Supreme Court squarely governs the facts of the present case.

In the light of the aforesaid undisputed factual matrix and the settled position of law, we are unable to concur with the approach adopted by the learned CIT(A). Once the very assumption of jurisdiction is found to be fundamentally defective, there remains no occasion to restore the matter to the file of the Assessing Officer for framing a fresh assessment. A jurisdictional defect cannot be rectified by way of remand. The appellate authority, having noticed that the assessment had been framed in the name of a non-existent entity, ought to have declared the assessment itself to be void instead of directing the Assessing Officer to undertake a fresh

Accordingly, respectfully following the ratio laid down by the Hon’ble Supreme Court in PCIT v. Maruti Suzuki India Ltd. (supra) and having regard to the undisputed fact that the assessment has been framed in the name of Oxygen Bio- Research Private Limited, which had admittedly ceased to exist pursuant to its amalgamation with Piramal Enterprises Limited, we hold that the impugned assessment order dated 17.03.2022 passed under section 147 read with section 144 is void ab initio, without jurisdiction and liable to be quashed. Consequently, the impugned order passed by the learned CIT(A) dated 09.01.2026 is also set aside. The jurisdictional ground raised by the assessee is accordingly allowed.

In the result, the appeal of the assessee stands allowed.