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Taxation Lawyer: Assessment order passed against the amalgamating entity, after approval of amalgamation scheme, is void-ab-initio; SC.

Supreme Court of India

Justice D Y Chandrachud and Justice Indira Banerjee

The SC {Principal Commissioner of Income Tax, New Delhi versus Maruti Suzuki India Limited} holds when the assessment order is passed against the amalgamating entity, in spite of the assessing officer being informed - in reply to notice under section 143(2) of the Income Tax Act, of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation - by amalgamated company. The assessment order is void-ab-initio as it is against the non-existent entity; and which is a substantive illegality.

The Supreme Court has put imprimatur to judgment of the Delhi High Court in "Spice Entertainment Limited versus Commissioner of Service Tax", and has held that mere participation in proceedings before the assessing officer by the amalgamated company/ appellant cannot make any difference as there is no estoppel against law. The assessment order passed by the assessing officer against amalgamating company remains void-ab-initio.

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