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TMI Blog2025 (1) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... of an entity which had ceased to exist. In the facts of the present case, we find that there was a valid disclosure made by the respondent-assessee and the AO being duly apprised of the factum of merger. Despite the above, it chose to make the draft assessment order in the name of a party which no longer existed on that date. This was, therefore, not a case where the factum of merger had either been suppressed or where the respondent had held out that Cairn still existed and could be proceeded against. It was the conduct of the assessee in Sky Light [ 2018 (2) TMI 1093 - DELHI HIGH COURT] which had convinced the Supreme Court to observe that the mistake would not render the order of assessment invalid and that it could be saved under Section 292B of the Act. The facts of the present case are clearly not akin to what prevailed in Sky Light. Regard must also be had to the fact that Section 154 enables an authority under the Act to rectify and correct an accidental slip or omission. It pertains to a power to rectify a mistake apparent from the record. Section 292B seeks to save orders which may suffer from similar mistakes provided they be otherwise compliant with the letter and spiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act ] specifically rectifiable in light of decision rendered by the Supreme Court in case of Sky Light Hospitality LLP vs. ACIT [(2018) 13 SCC 147]? 2. The question of law as set out above however came to be rectified in terms of our order dated 13 September 2024 by way of which the expression as well as Assessing Officer came to be deleted. 3. The undisputed facts which emerge from the record are as follows. The respondent-assessee, M/s Vedanta Limited [Vedanta] is the resultant entity which came into existence consequent to M/s Cairn India Limited [Cairn] amalgamating with it from an Effective Date of 01 April 2017. The Appointed Date under the Scheme of Amalgamation was stated to be 01 April 2016. 4. A reference with respect to international transactions pertaining to Assessment Year [AY] 2015-16 came to be made to the Transfer Pricing Officer [TPO] on 21 September 2017. The TPO upon conclusion of those proceedings proceeded to pass an order referable to Section 92CA (3) of the Income Tax Act, 1961 [Act] on 29 October 2018. It however becomes pertinent to note that the order referable to Section 92CA (3) was drawn in the name of Cairn and which entity had ceased to exist in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-assessee to the draft assessment order ultimately came to be disposed of by the Dispute Resolution Panel [DRP] in terms of an order dated 20 September 2019 and the proceedings culminated in the framing of a final assessment order on 28 November 2019. 8. Mr. Rai, learned counsel appearing in support of the appeal has essentially sought to contend that the mistake which had crept into the original order passed under Section 92CA (3) was one which was rectifiable and thus would have been liable to be sustained bearing in mind the decision of this Court in Sky Light Hospitality LLP v. Assistant commissioner of Income-tax 2018 SCC OnLine Del 7155. 9. According to learned counsel, notwithstanding what the Supreme Court has ultimately come to hold in Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki (India) Limited (2020) 18 SCC 331 , the mistake in the present case would fall within the scope of Section 292B read along with Section 154 in light of the facts being similar to those which obtained in Sky Light. 10. Mr. Vohra, learned senior counsel appearing for the respondent-assessee, on the other hand, submitted that the order of the TPO dated 29 October 2018 clearly suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come to be affirmed by the Supreme Court. Dealing with the aforesaid contention, the Supreme Court in Maruti Suzuki observed as follows: 28. The submission, however, which has been urged on behalf of the Revenue is that a contrary position emerges from the decision of the Delhi High Court in Skylight Hospitality LLP [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296] which was affirmed on 6-4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] by a two-Judge Bench of this Court consisting of Hon'ble Mr. Justice A.K. Sikri and Hon'ble Mr. Justice Ashok Bhushan. In assessing the merits of the above submission, it is necessary to extract the order dated 6-4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] of this Court : (Skylight Hospitality case[Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147], SCC p. 147, para 1) 1. In the peculiar facts of this case, we are convinced that wrong name given in the notice was merely a clerical error which could be corrected under Section 292-B of the Income Tax Act. The special leave petition is dismissed. Pending applications stand disposed of. Now, it is evident from the above extract that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s. Skylight Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused. 29. The decision in Spice Entertainment [ Spice Entertainment Ltd. v. Commr. of Service Tax, 2011 SCC OnLine Del 3210 : (2012) 280 ELT 43] was distinguished with the following observations : ( Skylight Hospitality case [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296], SCC OnLine Del para 19) 19. Petitioner relies on Spice Infotainment v. CIT [ This judgment has also been referred to as Spice Infotainment Ltd. v. CIT, (2012) 247 CTR 500 (Del)]. Spice Corp. Ltd., the company that had filed the return, had amalgamated with another company. After notice under Sections 147/148 of the Act was issued and received in the name of Spice Corp. Ltd., the assessing officer was informed about amalgamation but the assessment order was passed in the name of the amalgamated company and not in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, he urged that despite the fact that the notice is of a jurisdictional nature for reopening an assessment, this Court did not find any infirmity in the decision of the Delhi High Court holding that the issuance of a notice to an erstwhile private limited company which had since been dissolved was only a mistake curable under Section 292-B. A close reading of the order of this Court dated 6-4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147], however indicates that what weighed in the dismissal of the special leave petition were the peculiar facts of the case. Those facts have been noted above. What had weighed with the Delhi High Court was that though the notice to reopen had been issued in the name of the erstwhile entity, all the material on record including the tax evasion report suggested that there was no manner of doubt that the notice was always intended to be issued to the successor entity. Hence, while dismissing the special leave petition this Court observed that it was the peculiar facts of the case which led the Court to accept the finding that the wrong name given in the notice was merely a technical error which could be corrected under Section 292-B. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would have been made on the predecessor, and all the provisions of this Act shall, so far as may be, apply accordingly. (3) When any sum payable under this section in respect of the income of such business or profession for the previous year in which the succession took place up to the date of succession or for the previous year preceding that year, assessed on the predecessor, cannot be recovered from him, the assessing officer shall record a finding to that effect and the sum payable by the predecessor shall thereafter be payable by and recoverable from the successor and the successor shall be entitled to recover from the predecessor any sum so paid. (4) Where any business or profession carried on by a Hindu undivided family is succeeded to, and simultaneously with the succession or after the succession there has been a partition of the joint family property between the members or groups of members, the tax due in respect of the income of the business or profession succeeded to, up to the date of succession, shall be assessed and recovered in the manner provided in Section 171, but without prejudice to the provisions of this section. Explanation . For the purposes of this secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court while coming to hold that Section 292B would apply, had pertinently observed that the material on record was indicative of the Revenue having always intended the notice to be addressed to the successor entity. It becomes pertinent to note that the Court in Sky Light Hospitality had alluded to substantial and affirmative material and evidence on record which indicated that the issuance of the notice in the name of the dissolved entity was a mistake. In arriving at that conclusion, it had not only borne in consideration the material which existed on the record as also the tax evasion report which had duly taken note of the conversion of the Private Limited Company into an LLP. It is thus apparent that Sky Light Hospitality came to be rendered in its own peculiar facts. It was in the aforesaid factual backdrop that the Supreme Court in Maruti Suzuki ultimately came to hold that there was no apparent conflict between Spice Entertainment and Sky Light Hospitality with the latter turning upon its individual facts. **** 32. In view of the aforesaid, the position in law appears to be well-settled that a notice or proceedings drawn against a dissolved company or one which no longer ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y after the passing of an order. 41. We also bear in consideration Maruti Suzuki having clearly held that such a mistake would not fall within the ken of Section 292B of the Act. An exercise of rectification as undertaken in the present case, if accorded a judicial imprimatur, would in effect amount to recognising a power to amend, modify or correct in an attempt to overcome a fundamental and jurisdictional error contrary to the principles enunciated in Maruti Suzuki. 42. We also cannot lose sight of the fact that this was not a case where the assessee had attempted to mislead or suppress material facts and which may have warranted the case of the assessee being placed in the genre which was considered in Mahagun Realtors. The mere submission of replies on the letter head of EHSSIL also fails to convince us to hold in favour of the Revenue. In any event, none of the authorities below have held that the appellant was guilty of suppression. We would thus be inclined to allow the instant appeal and answer the question as posed in favour of the appellant and against the Revenue. 14. As is apparent upon a reading of the aforesaid extracts, we had found that the decision of the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observation forming part of the order of assessment which may have been representative of a conscious intent of the AO to frame an assessment in the name of the resultant entity and the order drawn in the name of Cairn being an accidental or inadvertent error. 18. We also bear in mind the indubitable fact that the AO proceeded to draw the order of assessment using the expression formerly known as . The appellant thus failed to acknowledge the merger even at this stage. The usage of the expression formerly known as is indicative of them presuming that the amalgamation was akin to a change to the fa ade of a legal entity as opposed to a fundamental alteration and the merger giving rise to a new being. It was these facts which had weighed upon us when we had amended the question of law on which the appeal was admitted. We thus find no merit in the argument of Mr. Rai that the challenge would be liable to be answered in light of Sky Light. Bearing in mind the fundamental error which beset the order of the TPO, the said decision would clearly not salvage the inherent and patent error which beset the order passed by the TPO. Absent any intent to assess the resultant entity, the order co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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