TAX, (CENTRAL II) vs. MAYANK TRADERS(P) LTD

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ITA/466/2015HC Delhi20 August 20155 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that assessment proceedings initiated against a non-existent entity due to a prior merger are invalid. The court found that the subsequent communication by the assessee without disclosing the merger did not cure this fundamental defect.

What were the facts?

The Revenue appealed against an ITAT order concerning assessment proceedings initiated against Mayank Traders (P) Ltd. after a search. Mayank Traders had merged with another company, Optus Promoters Pvt. Ltd., prior to the assessment proceedings.

What were the issues?

Whether assessment proceedings under Section 153A can be validly initiated against an entity that has ceased to exist due to a merger. Whether the failure to disclose the merger in initial communications cures a fundamental defect in the assessment.

Which sections of the Income-tax Act were involved?

Section 153A

AI-generated summary — verify with the full judgment below

ITA Nos.466, 467, 470, 471 & 477 of 2015 Page 1 of 5 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 6. +

ITA 466/2015

COMMISSIONER OF INCOME TAX, (CENTRAL II)

..... Appellant Through: Ms Suruchi Aggarwal, Senior Standing Counsel with Ms Lakshmi Gurung, Junior Standing Counsel.

versus

MAYANK TRADERS(P) LTD.

..... Respondent

Through

WITH 7. +

ITA 467/2015

COMMISSIONER OF INCOME TAX, (CENTRAL II),

..... Appellant Through: Ms Suruchi Aggarwal, Senior Standing Counsel with Ms Lakshmi Gurung, Junior Standing Counsel.

versus

MAYANK TRADERS(P) LTD.

..... Respondent

Through WITH 8. +

ITA 470/2015

COMMISSIONER OF INCOME TAX, (CENTRAL II)

..... Appellant Through: Ms Suruchi Aggarwal, Senior Standing This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:57:48

ITA Nos.466, 467, 470, 471 & 477 of 2015 Page 2 of 5 Counsel with Ms Lakshmi Gurung, Junior Standing Counsel.

versus

MAYANK TRADERS(P) LTD.

..... Respondent

Through WITH 9. +

ITA 471/2015

COMMISSIONER OF INCOME TAX, (CENTRAL II)

..... Appellant Through: Ms Suruchi Aggarwal, Senior Standing Counsel with Ms Lakshmi Gurung, Junior Standing Counsel.

versus

MAYANK TRADERS(P) LTD.

..... Respondent

Through AND 10. +

ITA 477/2015

PR. COMMISSIONER OF INCOME TAX, (CENTRAL II),

..... Appellant Through: Ms Suruchi Aggarwal, Senior Standing Counsel with Ms Lakshmi Gurung, Junior Standing Counsel.

versus

MAYANK TRADERS(P) LTD.

..... Respondent

Through

CORAM: HON'BLE DR. JUSTICE S.MURALIDHAR This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:57:48

ITA Nos.466, 467, 470, 471 & 477 of 2015 Page 3 of 5 HON'BLE MR. JUSTICE VIBHU BAKHRU

O R D E R %

20.08.2015 1. These appeals by the Revenue are directed against the common order dated 28th November, 2014 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA Nos.5307, 5308/Del/2013 and 2356 & 2357/Del/2014 for the Assessment Years (‘AY’) 2005-06, 2006-07, 2003-04 and 2004-05.

2.

The Respondent in the relevant AYs was engaged in the business of fabrication of cloth and textiles. A search was conducted in the premises of the Respondent on 20th October, 2008 and notices under Section 153A (1) of the Act were issued to it on 29th March, 2010 requiring into to file its return for the AYs previous to the relevant AY in which the search was conducted. One of the grounds urged by the Respondent was that following its merger with Optus Promoters Pvt. Ltd. (‘OPPL’) from 1st April 2008 in terms of the order of this Court dated 18th October 2010, the initiation of proceedings against it under Section 153A by the aforementioned notice was bad in law.

3.

After the Assessing Officer (AO) rejected the above plea, the Respondent appealed to the Commissioner of Income Tax (Appeals) [CIT (A)]. The CIT

(A) also rejected the plea noting that the return of income filed on 18th This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:57:48

ITA Nos.466, 467, 470, 471 & 477 of 2015 Page 4 of 5 November 2010, nearly eight months after the notice dated 29th March 2010under Section 153A (1), was in the name of Mayank Traders P Ltd and that no reference was made to its amalgamation with OPPL. The CIT (A) further noted that the Respondent was corresponding with the AO by letter dated 18th November, 2010 in its own name without referring to its amalgamation with OPPL and it was only in the month of December, 2010 when the limitation period for assessment was nearing an end that the AO was informed about the amalgamation with OPPL.

4.

The ITAT in the impugned order has referred to the decision dated 17th September, 2009 of this Court in ITA No.273/2009 (CIT v. Vived Marketing Services Pvt. Ltd.) which held that an assessment could not be validly framed on a non-existent entity.

5.

Recently this Court has in an order dated 19th August 2015 in ITA No. 582 of 2015 (PCIT v. Images Credit and Portfolio Pvt. Ltd ) held that proceedings under Section 153C could not be initiated against an entity that had ceased to exist at the relevant time. Similarly, by order dated 3rd August 2015 in ITA No. 475/2000 (Spice Enfotainment Ltd. v. CIT) it was held by this Court that the defect of passing an assessment order in respect of an This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:57:48

ITA Nos.466, 467, 470, 471 & 477 of 2015 Page 5 of 5 entity that had ceased to exist on the date of such order, could not be treated as a mere procedural defect. The mere fact that the Respondent communicated to the AO, prior to the Assessment order and subsequent notice, in its name without disclosing the fact of amalgamation with OPPL, will not cure the fundamental defect of the assessment having been framed against an entity that had ceased to exist in the eye of law.

6.

Consequently, the impugned common order of the ITAT following the decision of this Court in Vived Marketing Services Pvt. Ltd. (supra) does not call for interference. No substantial question of law arises. The appeals are dismissed.

S.MURALIDHAR, J

VIBHU BAKHRU, J AUGUST 20, 2015 MK This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:57:48

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