The Hon’ble Supreme Court, on 25thJuly 2019, in the matter of Pr. Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Limited, pronounced that issuance of an assessment order against an amalgamating company, which has ceased to exist, is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B of the Income Tax Act, 1961.
The Hon’ble Supreme Court observed that:
Upon the amalgamating company ceasing to exist, it cannot be regarded as a person under Section 2(31) of the Income Tax Act, 1961. Therefore, issuance of an assessment order against such amalgamating company is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B of the Income Tax Act, 1961. (This inference has been drawn on the basis of Para 19 and 31)
There is a value which the court must abide by in promoting the interest of certainty in tax litigation. (Para 34)
There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable. (Para 34)
Copy of judgement: Judgement_25th-Jul-2019