The AO r was directed by the PCIT   to do a de novo assessment by carrying out proper examination of the books of accounts of the assessee and its investors. The AO  on October 28, 2016 framed the assessment order by verifying that all transactions were duly reflected in the bank statement and no adverse inference was to be drawn against the assessee. Subsequently by order of the National Company Law Tribunal dated December 21, 2018, the assessee was amalgamated with N and ceased to exist separately. The same was notified to the Assessing Officer on January 31, 2019. However, the Principal Commissioner of Income Tax issued a show cause notice under S.263 of the Act dated December 31, 2018 in the name of the erstwhile assessee following which an order dated March 12, 2019 was passed.

On appeal it was held that when the Department was aware about the dissolution of the assessee, the erstwhile entity should be substituted by the successor company when the Principal Commissioner passes an order after giving adequate opportunity of being heard as envisaged under S.263 of the Income-tax Act, 1961. Thus, the order of the Principal Commissioner being passed against non-existent entities is void ab initio.

PCIT v. Maruti Suzuki India Ltd. (2019)416 ITR  613 (SC) and CIT  v. Sspice Enfotainment Ltd. [2018] 12 ITR.OI 134 (SC) applied. Sky Light Hospitality LLP  v. ACIT ([2018) 405 ITR 296 (Delhi) (HC) is  distinguished.

Further held that notice to the assessee is not a condition precedent for invoking jurisdiction under S. 263 however, an opportunity to the assessee is a necessity under S. 263 and failure to do so is a violation of natural justice and therefore illegal.  (AY.2012-13)