PCIT-8 Vs Sony Mobile Communications India Pvt ltd
Forum- Deli High Court
Date-18th May 2021

Sub-Whether when a company is merged with another company after the filing of return but before original assessment order is passed and the original order and subsequent order in pursuance of remand from high court, in passed in the old name, is it a curable defect u/s 292B of the Income-tax Act,1961. Matter referred to larger bench of Delhi high court on a difference of opinion.

The matter related to the appellant who had merged with another company after the return was filed and even though the notice u/s 143(2) was issued in the correct name but by the time the assessment order was passed, the company having been merged, it was contended by the appellant that the assessment was a nullify and defect was not curable.

Ironically, this was second round of litigation as in the 1st round, the matter went upto the high court and was remanded to ITAT for fresh adjudication and till that time the appeals were filed by the Company itself in old name.

The Delhi High Court was confronted of two substantial question of law i) whether on a remand from high court, the ITAT could have considered the question of nullify of assessment order as an additional ground since during original ITAT proceedings, no such ground was taken and ii) whether in a situation like this the notice having been issued correctly, the defect was curable. The assessee relied on plethora of decision including the decision of Maruti Suzuki of Supreme Court.

Justice Rajiv Sahai Endlaw noted that Delhi High Court in Savita Kapila’s(426 ITR 502) case had noted that issuance of notice in a correct name is a sine qua non and in this case notice was issued in correct name. The court also noted that if the order was held to be nullity then even the 1st appeal was also bad in law.

However, Justice Narula heavily relied on the decision of Maruti Suzuki and held that even though the company may have filed appeal itself in old name, that could not have revived the procedural defect.

Thus, on a difference of opinion, the matter has been referred to larger bench.

When the companies are merged/amalgamated, observance of procedural law is very important and the outcome will be keenly awaited.

Ramesh Patodia
07-6-2021