BHARAT SERUMS AND VACCINES LIMITED (KASIAK RESEARCH PRIVATE LIMITED HAS MERGED WITH BHARAT SERUMS AND VACCINES LIMITED ),MUMBAI vs. DCIT, CIRCLE 3(2)(2), MUMBAI, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “H” BENCH MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 2647/Mum/2023 (Assessment Year: 2016-17) Bharat Serums and DCIT Circle 3(2)(2) Vaccines Limited Aayakar Bhavan, (Kasiak Research Vs. Maharshi Karve Road, Private Limited has Mumbai-400 020 merged with Bharat Serums and Vaccines Limited) 17th Floor, Hoechst House, Nariman Point, Mumbai-400 021 PAN/GIR No. AAJCS2922F (Applicant) (Respondent) Assessee by Shri Dharan Gandhi, Ld. AR Revenue by Shri Pravin Salunkhe, Sr. DR Date of Hearing 07.05.2026 Date of Pronouncement 29.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 26.05.2023 passed by the learned Commissioner of Income

2 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the CIT(A)"], for Assessment Year 2016-17, arising from the assessment order passed under section 143(3) of the Income-tax Act, 1961 [hereinafter referred to as "the Act"] dated 20.12.2018.

Under the Facts and in law, the order passed u/s 143(3) is bad in law as much as the learned A.O. failed to appreciate the fact that Kasiak Research Private Ltd has been merged with the Bharat Serums and Vaccines Ltd vide order dated 02.08.2018 and hence the said order passed u/s 143(3) on 20.12.2018 on non-existent company is bad in law. Facts of the Case

3 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited 4. Briefly stated, the facts are that the assessee filed its return of income for Assessment Year 2016-17 declaring a loss of Rs.1,26,83,613/-. The case was selected for scrutiny assessment and assessment was completed under section 143(3) of the Act vide order dated 20.12.2018. 5. During the course of assessment proceedings, the Assessing Officer observed that the assessee had issued 378 equity shares to Eureka Forbes Limited at a face value of Rs.10/- per share and at a premium of Rs.32,990/- per share. Consequently, the assessee had received aggregate share premium of Rs.1,24,70,220/- during the relevant previous year. 6. The Assessing Officer called upon the assessee to furnish complete details regarding the issue of shares, valuation report, basis of valuation and justification for charging share premium. A specific show cause notice dated 11.12.2018 was also issued requiring the assessee to explain the basis for issue of shares at substantial premium. According to the Assessing Officer, though certain details including valuation report were furnished, the assessee failed to satisfactorily justify the premium charged. The Assessing Officer further observed that the assessee had incurred losses and had negative reserves and surplus. He therefore concluded that the assessee had failed to substantiate the fair market value of shares as contemplated under section 56(2)(viib) of the Act.

4 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited 7. Accordingly, the Assessing Officer treated the share premium of Rs.1,24,70,220/- received from Eureka Forbes Limited as liable for addition under section 56(2)(viib) of the Act and completed the assessment determining the assessed loss at Rs.2,13,393/- as against the returned loss of Rs.1,26,83,613/-. 8. Aggrieved, the assessee preferred an appeal before the learned CIT(A). The learned CIT(A) noted that notices were issued on various dates during appellate proceedings. However, according to the learned CIT(A), there was no compliance from the side of the assessee. The appeal was therefore disposed of ex parte. On merits, the learned CIT(A) upheld the addition of Rs.1,24,70,220/- made under section 56(2)(viib) of the Act and dismissed the appeal. 9. At the time of hearing before us, the learned Authorised Representative (AR) pressed the additional legal ground challenging the validity of the assessment itself. The learned AR submitted that Kasiak Research Private Limited stood amalgamated with Bharat Serums and Vaccines Limited pursuant to the order passed by the National Company Law Tribunal in C.P. (CAA)/2106/MB/2018 dated 02.08.2018. He submitted that despite the amalgamation having attained finality, the Assessing Officer passed the assessment order under section 143(3) on 20.12.2018 in the name of Kasiak Research Private Limited, which had ceased to exist.

5 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited 10. The learned AR further invited our attention to the Statement of Facts filed before the learned CIT(A), wherein the assessee had specifically disclosed as under: "The Appeal is for the order passed in the name of the Appellant Company, which is amalgamated with Bharat Serums and Vaccines Limited pursuant to the order passed by the NCLT vide order no. C.P. (CAA)/2106/MB/2018 dated August 2, 2018. The merger is dated April 01, 2017." 11. It was submitted that despite the aforesaid specific disclosure, the learned CIT(A) also proceeded to pass the appellate order in the name of Kasiak Research Private Limited, which was a non-existent entity.

6 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited that the order of the learned CIT(A) was passed ex parte and the additional ground had not been specifically urged before the learned CIT(A).The learned DR further submitted that the Assessing Officer had issued a show cause notice dated 11.12.2018 calling upon the assessee to justify the receipt of share premium. However, the assessee failed to furnish a satisfactory reply. He therefore submitted that the assessee should not be permitted to raise a fresh plea at this stage and relied upon the orders of the lower authorities. 15. We have carefully considered the rival submissions and perused the material available on record. The first issue which arises for consideration is whether the additional ground raised by the assessee deserves admission. 16. We find that the additional ground challenges the very validity of the assessment proceedings on the ground that the assessment order was passed in the name of a non-existent entity. The relevant facts concerning amalgamation and the assessment order are already available on record. No fresh investigation of facts is required. The Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT (229 ITR 383) held that the Tribunal has jurisdiction to examine a question of law arising from facts already available on record even if such question had not been raised before the lower authorities. The Hon'ble Supreme Court observed that where determination of the question is necessary for correctly assessing the tax liability,

7 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited the Tribunal is competent to entertain such ground. The relevant paras are reproduced for the sake of brevity:

"The power of the Tribunal in dealing with appeals is expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item." (para 5) "The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) takes too narrow a view of the powers of the Tribunal... where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings there is no reason why such a question should not be allowed to be raised..." (para 7) "The Tribunal has, therefore, jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee." (para 8) 17. The Hon'ble Bombay High Court in the case of Pruthvi Brokers & Shareholders Pvt. Ltd. (349 ITR 336) further held that an assessee is entitled to raise additional grounds and additional claims before the appellate authorities and that the appellate authorities possess jurisdiction to entertain such claims. Similar view has been taken by the Hon'ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society (397 ITR 344), wherein the Tribunal was held justified in permitting a jurisdictional ground to be raised for the first time before it since the issue arose from facts already on record.

8 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited 18. Respectfully following the aforesaid judicial precedents, we admit the additional ground raised by the assessee. Having admitted the additional ground, we now proceed to examine the same on merits. 19. It is not disputed before us that Kasiak Research Private Limited stood amalgamated with Bharat Serums and Vaccines Limited pursuant to the order passed by the National Company Law Tribunal dated 02.08.2018.It is further not disputed that the assessment order under section 143(3) was passed subsequently on 20.12.2018 in the name of Kasiak Research Private Limited. We also find from the Statement of Facts filed before the learned CIT(A) that the assessee had specifically brought to the notice of the first appellate authority the factum of amalgamation. Notwithstanding the same, the learned CIT(A) passed the impugned appellate order in the name of the amalgamating company. 20. The legal position governing such cases is now well settled. In New Age Buildtech (P.) Ltd. vs. National Faceless Assessment Centre (151 taxmann.com 66), the Hon'ble Bombay High Court held that where the fact of amalgamation had been brought to the notice of the Department, issuance of notices and passing of assessment orders in the name of the amalgamating company which had ceased to exist would be without jurisdiction and liable to be quashed. The Hon'ble High Court followed the decisions in Saraswati Industrial Syndicate Ltd., Spice Entertainment Ltd. and Maruti Suzuki India Ltd.

9 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited and held that participation in proceedings by the amalgamated entity cannot operate as an estoppel against law. The relevant paras are reproduced below for the sake of brevity:

"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." (para 5) "If despite informing the assessing officer if the jurisdictional notice was issued in the name of erstwhile company, then the basis on which the jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation and the participation in the proceedings by the assessee cannot operate as an estoppel against law." (para 5) "Considering the facts of the present case on the touchstone of the aforestated well settled propositions of law therefore, the Order of assessment u/s 143(3)... issued in the name of a non-existent entity are void." (para 6) 21. The Hon'ble Bombay High Court in Reliance Industries Ltd. vs. P.L. Roongta (171 taxmann.com 467) has recently reiterated that where the Revenue had knowledge of the amalgamation and still proceeded to frame assessment in the name of a non-existent entity, such assessment would be void ab initio. The Hon'ble High Court further held that all consequential proceedings would also stand vitiated. The relevant paras are reproduced below for the sake of brevity:

"The assessment orders have been passed in the name of RPEL and RPPL (non-existing entities), although the respondent-revenue had full knowledge that such entities did not exist." (para 25) "Although RIL-amalgamated company participated in the proceedings, the respondent-revenue having knowledge of the amalgamation still

10 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited passed an order in the name of the amalgamating companies which would make the assessment order ... void ab initio."(para 33) "The proceedings against an amalgamating company post the amalgamation orders are void ab initio if the revenue had knowledge of the amalgamation prior to the proceedings." (para 34) "The assessment order passed by the Assessing Officer in the name of RPEL and RPPL is held to be bad in law and quashed and set aside and consequently all the proceedings before the appellate authorities would also stand quashed." (para 35) 22. The ratio emerging from the aforesaid judicial precedents is that upon amalgamation, the amalgamating company ceases to exist in the eyes of law and an assessment framed thereafter in its name is not a mere procedural irregularity but a substantive jurisdictional defect rendering the assessment void. In the present case, the assessment order dated 20.12.2018 was admittedly passed after the order of amalgamation dated 02.08.2018. Therefore, on the date on which the assessment order came to be passed, Kasiak Research Private Limited had already ceased to exist. Once this foundational fact is accepted, the assessment order passed in the name of the non-existent amalgamating company cannot be sustained in law. Consequently, the appellate order passed by the learned CIT(A) in the name of the same non-existent entity also cannot survive.

11 ITA No. 2647/Mum/2023 Bharat Serums and Vaccines Limited 24. Since we have quashed the assessment itself on the jurisdictional ground, adjudication on Ground Nos. 2 and 2.1 challenging the addition of Rs.1,24,70,220/- under section 56(2)(viib) of the Act becomes purely academic and is therefore not considered necessary.

Order pronounced on29/06/2026 as per Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963.

Sd/- Sd/- (KAVITHA RAJAGOPAL) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 29/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai