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TMI Blog2025 (2) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order with regard to amalgamating company should be assessed in the name of amalgamating company or amalgamated company post the amalgamation order ? - HELD THAT:- The facts of the present appellant-assessee before us are similar to the significant facts in the case of Maruti Suzuki India Ltd. [2019 (7) TMI 1449 - SUPREME COURT] on the basis of which the Supreme Court has held that inspite of the fact of the AO being informed of the amalgamating company having ceased to exist as a result of the scheme of amalgamation, if the proceedings are initiated against the non-existing companies, then such proceedings are void ab initio although the amalgamated company participated in the proceedings.
In our view, in the present case also although RIL-amalgamated company participated in the proceedings, the respondent-revenue having knowledge of the amalgamation still passed an order in the name of the amalgamating companies which would make the assessment order dated 27 March 1997 void ab initio. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... he six appeals for the assessment years 1993-94 to 1995-96 are filed by the appellant-assessee M/s. Reliance Industries Ltd. (RIL) and the revenue has filed two appeals for the assessment years 1994-95 being cross-appeals. 5. All the assessee's appeals were admitted in the year 2008 and the revenue's appeals were admitted in the year 2013 on the questions of law set out in the respective orders of admission. However, we do not propose to reproduce the questions of law admitted by this Court in the years 2008 and 2013 since these questions were on merits of the additions. However, when these appeals were taken up for final hearing in the year 2025, the appellant raised a preliminary jurisdictional ground on whether the assessment orders for these years could at all have been passed in the name of M/s. Reliance Polyethylene Limited ('RPEL') and M/s. Reliance Polypropylene Limited ('RPPL') non-existing companies on account of amalgamation order by which these companies were merged with Reliance Industries Limited (RIL). 6. This Court on 20 January 2025 in this group of appeals had passed the order permitting the appellant-RIL to raise the jurisdictional ground since same goes to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Reliance Polyethylene Limited were merged with Reliance Industries Limited (RIL). He submitted that this material may not be on record. Still, the Appellant proposes to file an application under Order 41, Rule 27 of the Code of Civil Procedure, 1908, to bring such material on record since such material is unimpeachable. 5. Mr. Mistri submitted that insofar as the assessment years 1994-1995 and 1995-1996 are concerned, clear material on record establishes that the Assessing Officer was aware of the merger orders. He pointed out that the assessment order for the year 1995-1996 refers explicitly to this merger order. He pointed out that for the assessment year 1994-1995, the assessment order of RIL on page Nos.56/87 of the paper book in Writ Petition No. 772 of 1999 shows that refunds of RIL were adjusted against the outstanding demand of not only RIL but also the merged companies. The said adjustment order is before the date of the assessment order for the assessment year 1994-1995. 6. Mr. Mistri submitted that the Hon'ble Supreme Court, in the case of PCIT vs. Maruti Suzuki India Limited, was very clear that issuance of a jurisdictional notice and assessment order in the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there is no necessity to investigate new facts or if there is no serious dispute on facts. In that case, such a question can be framed even though the same may not have been raised in the earlier proceedings before the original or appellate authority. Consent, per se, cannot confer jurisdiction upon an authority where such jurisdiction is inherently lacking. 10. In Ashish Estates & Properties (P.) Ltd. vs. Commissioner of Income-tax, the Co-ordinate Bench of this Court held that a question which was not raised before Tribunal should not ordinarily be allowed to be raised in an appeal under Section 260A unless it was a question on the issue of jurisdiction or question, which went to the root of the jurisdiction. 11. In Santosh Hazari vs. Purshottam Tiwai (Dead) by L.Rs. the Hon'ble Supreme Court held that an entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. It will, therefore, depend on the facts and circumstances of each case whether a question of law is a substantial one and involved in the case, or not; the paramount overall consideration being the need for striking judicious b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uzuki India Limited (supra) or whether the exceptions carved out in Mahagun Realtors Pvt. Ltd. (supra) is a question that we will have to decide once the additional substantial question as proposed is framed. Mr. Suresh Kumar and Mr. Vipul Bajpayee tried to contend that the revenue case was covered by the decision of Mahagun Realtors Pvt. Ltd. (supra). We propose to hear them on this issue once the substantial question is framed. 17. For all the above reasons, we are satisfied that the question proposed by Mr. Mistri is involved in these appeals, and therefore, we frame the above question in all these appeals. If answered in favour of the assesses, the question would go to the root of jurisdiction. 18. After framing this question, we defer the hearing to 27 January 2025 so that the counsel for the parties would have sufficient time to address, inter alia, the additional question that we have now framed in these appeals. List the matters on 27 January 2025 at 2:30 p.m. under the caption of part heard. 8. We propose to adjudicate the jurisdictional substantial question of law which was permitted by our order dated 20 January 2025 and which reads as under : "Whether on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted on 10 July 2008 on the substantial questions of law referred to in the said order. 14. As stated above, this Court vide order dated 20 January 2025 permitted the appellant-assessee to raise jurisdictional ground involving substantial question of law, which is reproduced above. Submissions of the Appellant : 15. Mr. Mistri, learned senior counsel for the appellant submits that although the Assessing Officer was aware that RPEL and RPPL are merged with RIL, still the assessment order was passed in the name of the non-existing entities RPEL and RPPL. It is his submission that after 1 January 1995, RPEL and RPPL ceased to exist on account of the merger order and, therefore, any assessment order passed in the name of such a non-existing entity is void. Mr. Mistri submitted that on 17 December 1996, pursuant to an application made by RPEL, the Assessing Officer adjusted the refund of RIL against the demand of RPEL and RPPL and the very same officer on 27 March 1997 passed an assessment order in the name of non-existing entities. He, therefore, submitted that since the Assessing Officer was made aware about the amalgamation/merger, he ought not to have passed the order against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff its obligation by taking such a belated plea. He further submits that the appellant-assessee itself has in Form No.35 and 36 in the appeal memo mentioned the name of the amalgamating company as the appellant. He further submits application for adjustment of refund of RIL is also on the letter head of the amalgamating company RPEL. He places reliance on the decision of the Supreme Court in the case of PCIT (Central)-2 Vs. M/s. Mahagun Realtors (P) Ltd. 2022 443 ITR 194 (SC) and contends that since the appellant never raised this objection and conducted itself before all the authorities as representing RPEL and RPPL, the appellant cannot contend otherwise and submit that the assessment orders passed are void. He further submitted that this Court should follow the decision in the case of M/s. Mahagun Realtors (P) Ltd. (supra) being latter decision and on a reading of various paragraphs of the said decision, Maruti Suzuki's case should not be followed. He, therefore, prayed that this question should be answered against the appellant-assessee. 19. Mr. Suresh Kumar, learned counsel for the respondents strongly objected to the interim applications being taken out by the appellant-asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments which are sought to be produced are inter-parte documents and communications exchanged between the appellant-assessee and the respondent-revenue. There is no dispute that these documents were filed with the Assessing Officer or are generated by the revenue. Under clause (b) of Order XLI Rule 27, the Appellate Court may allow additional evidence if it requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause. In the instant case, the issue which requires to be examined is whether in light of the Supreme Court's decision in the case of Maruti Suzuki India Ltd. (supra) and Mahagun Realtors (P) Ltd. (supra), the Assessing Officer had knowledge and was intimated about the fact of amalgamation of RPEL and RPPL with RIL before the assessment order was passed. If the answer is 'yes', then the assessment order passed in the name of RPEL and RPPL is void. To enable this Court to ascertain whether the Assessing Officer had knowledge of the amalgamation prior to passing of the assessment order, the documents which are sought to be produced as additional evidence would enable this Court to pronounce its jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no dispute that these documents are on record of the respondent-revenue and the contents are also not disputed. There is also no dispute about the fact of amalgamation and merger having taken place between RPEL and RPPL with RIL. These documents would be relevant for adjudicating upon the jurisdictional ground with which we are concerned. Therefore, the interim applications filed in ITXA Nos. 971 of 2007 and 970 of 2007 are allowed and the appellant-assessee is justified on relying upon the same in support of its submissions. 25. As stated by us above, the Assessing Officer who has passed the assessment orders for the assessment year 1994-95 on 27 March 1997 had knowledge that RPEL and RPPL have merged with RIL. The dates are not disputed by the respondent-revenue of intimation and notes to accounts and computation of income which are referred to hereinabove. The existence and contents of these documents are also not disputed. The dates of these documents are prior to the assessment orders. Therefore, it can be safely concluded that the assessment orders have been passed in the name of RPEL and RPPL (non-existing entities), although the respondent-revenue had full knowle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income to a specific query "Business Reorganization (a)....... (b) In case of amalgamated company, write the name of amalgamating company" the reply mentioned was "NOT APPLICABLE". The appeal before the Tribunal was also filed in the name of amalgamating company. It was on these facts that the Supreme Court observed that since the amalgamating company did not inform the revenue about the amalgamation but held out to the revenue as if the amalgamating company is in existence, the Supreme Court did not accept the submission made by the assessee that the proceedings were taken against the non-existing company. In the present case before us, the respondent-revenue has not pointed out how the facts in the present case are identical to the facts of Mahagun Realtors (P) Ltd. (supra) which was the basis of the decision of the Supreme Court. These facts are absent in the present matter before us, but on the contrary the respondent-revenue had knowledge about the amalgamation/merger as observed by us above and, therefore, the decision of Mahagun Realtors (P) Ltd. (supra) is not applicable to the facts before us. 29. We may observe that the Supreme Court in the case of Mahagun Real ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Ltd. (supra) to the facts before them which we have already observed above. The subsequent decision of the Supreme Court in the case of Mahagun Realtors (P) Ltd. (supra) does not dissent from the decision in the case of Maruti Suzuki India Ltd. (supra) but the observations made from paragraphs 18 to 32 do give an indication in that direction. However, the decision of various High Courts and the decision of the Supreme Court in the case of Maruti Suzuki India Ltd. (supra) holds the field today and therefore we have to consider the effect of the decision in the case of Maruti Suzuki India Ltd. (supra) to the facts of the present case. 32. The Supreme Court in the case of Maruti Suzuki India Ltd. (supra) in paragraph 19 has adverted to various facts of the assessee before them, which we propose to advert here for deciding whether the case of the appellant falls within the facts of Maruti Suzuki India Ltd. (supra). (i) The income which was sought to be subjected to tax was of the erstwhile entity prior to amalgamation. In the instant case before us also the assessment order by which the demand is raised is in the name of the erstwhile entity. (ii) Under the scheme of amalgamati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the High Courts of Gujarat, Calcutta, Delhi and Madras, which are referred to in the paragraph dealing with the submissions made on behalf of the appellant-assessee. These have considered the decisions in the cases of Maruti Suzuki India Ltd. (supra) and Mahagun Realtors Pvt. Ltd. (Supra), and have come to a conclusion that proceedings against non-existing entities are bad in law. In our view, the reliance placed on these decisions by the appellant-assessee supports the submissions made by them on the proposition that 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. 35. In view of above, assessment orders dated 27 March 1997 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. In view of above, question of law framed by our order dated 20 January 2025 is answered in favor of the appellant-assessee and against the respondent-revenue and the appeals filed by the appellant-assessee for assessment year 1994-95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s answered in favour of the appellant-assessee and against the respondent-revenue. Assessment year 1993-94 44. Income Tax Appeal No. 1313 of 2007 and Income Tax Appeal No.1380 of 2007 have been filed by the appellant-assessee for the assessment year 1993-94. In these appeals, the appellant-assessee has also taken out Interim Application Nos.2614 of 2025 and 2290 of 2025 respectively. Income Tax Appeal No.1380 of 2007 pertains to RPEL and Income Tax Appeal No. 1313 of 2007 pertains to RPPL. 45. In December 1993, RPEL and RPPL filed their returns of income which were subsequently revised by these entities on 30 November 1994. 46. On 11 January 1995, pursuant to an amalgamation / merger order passed by this Court, RPEL and RPPL merged with RIL with effect from 1 January 1995. 47. On 18 March 1996, an assessment order came to be passed in the name of RPEL and RPPL. 48. It is the above assessment orders which are challenged in the present appeal on the ground that the same having been passed in the name of non-existing entities, they are void. 49. In the Interim Application taken out by the appellant-RIL, leave is sought of this Court under Order XLI Rule 27 of the Code of Civil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above statement, Writ Petition No. 772 of 1999 is disposed of as being infructuous. Interim order, if any, passed in Writ Petition No. 772 of 1999 would stand vacated. 55. We may, once again clarify that we have allowed the appellant-assessee's appeal only on the ground that assessment orders have been passed in the name of the amalgamating companies by accepting the submission of the appellant-assessee that the orders could not have been made against the non-existing companies post amalgamation / merger, but result of this submission is that assessment order ought to have been and shall and should be passed in the name of amalgamated company RIL. We clarify that nothing in this order would preclude the revenue-respondents from initiating fresh proceedings against the amalgamated company-RIL in accordance with law for assessing income in the hands of the amalgamated company. We further clarify that since we have quashed the assessment orders, the questions of law admitted by this Court in the years 2008 and 2013 in various appeals on merits is not adjudicated upon. 56. To conclude, the appeals and interim applications filed by the appellant-assessee for assessment year 1993-1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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