Tribunal Holds Orders Void Ab Initio Where Department Ignored Repeated Intimations of Merger
Meetu Kumari | Apr 15, 2026 |
ITAT Quashes Assessment Passed in Name of Non-Existent Amalgamated Company
Fairfield Atlas Limited (FAL) filed its return for AY 2021–22 declaring income of Rs. 37.33 crore. During the pendency of scrutiny and transfer pricing proceedings, the NCLT approved a scheme of amalgamation on 30.05.2023, merging FAL into Graziano Transmission India Pvt. Ltd. (GTIPL) with effect from 01.04.2022. As a result, FAL ceased to exist in law.
The assessee duly informed the Assessing Officer and Transfer Pricing Officer across jurisdictions about the amalgamation by submitting the NCLT order, scheme of merger, RoC filings, and PAN details of the successor entity. Despite these repeated disclosures and participation in proceedings under the successor’s name, the department proceeded to pass the transfer pricing order, draft assessment order, and final assessment order dated 30.10.2024 in the name of the dissolved entity FAL.
Issue Raised: Whether assessment and transfer pricing orders passed in the name of a non-existent entity remain valid when the tax authorities were duly informed of the amalgamation.
Tribunal Held: The ITAT Delhi held that the assessment framed in the name of a non-existent entity is a jurisdictional defect and void ab initio. It noted that the assessee had placed sufficient material on record to demonstrate that the department was repeatedly informed about the amalgamation and the consequent dissolution of FAL.
Relying on the Supreme Court ruling in PCIT v. Maruti Suzuki India Ltd., the Tribunal held that initiating or continuing proceedings against a non-existent entity strikes at the root of jurisdiction and is not a mere procedural irregularity. The Revenue’s reliance on PCIT v. Mahagun Realtors (P) Ltd. was rejected as distinguishable on facts, since in that case the amalgamation was not disclosed to the department. Accordingly, the Tribunal quashed the transfer pricing order, draft assessment order, and final assessment order without going into the merits of the additions.
To Read Full Order, Download PDF Given Below
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