IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No 5409 of 2019 (Arising out of SLP(C) No 4298 of 2019) Pr. Commissioner of Income Tax, New Delhi Appellant Versus Maruti Suzuki India Limited Respondent JUDGMENT Dr Dhananjaya Y Chandrachud, J 1 This appeal arises from judgment of Division Bench of Delhi High Court dated 9 January 2018 which upheld decision of Income Tax Appellate Signature Not Verified Tribunal1. Tribunal held that assessment made in name of Suzuki Digitally signed by MANISH SETHI Date: 2019.07.25 13:19:58 IST Reason: 1 Tribunal 1 Powertrain India Limited2 for Assessment Year3 2012-13 is nullity since entity had been amalgamated with Maruti Suzuki India Limited4 under approved scheme of amalgamation and was not in existence. High Court, while affirming this view of Tribunal followed its own decision for AY 2011-12 in Principal Commissioner of Income Tax 6, New Delhi v Maruti Suzuki India Limited (successor of SPIL)5 ( Maruti Suzuki ) . Holding that no question of law arose, High Court dismissed appeal under Section 260A of Income Tax Act 1961 6. 2 Revenue is in appeal. 3 Against decision of High Court for AY 2011-12, Special Leave Petition7 was dismissed by two judge Bench of this Court on 16 July 2018 with following observations: Heard learned counsel for parties. Delay condoned. In view of order dated 02.11.2017 passed by this Court in C.I.T., New Delhi Vs. M/s. Spice Enfotainment Ltd. (Civil Appeal No. 285 of 2014 etc. etc.), this special leave petition also stands dismissed. Pending applications, if any, shall stand disposed of. 2 SPIL 3 AY 4 MSIL 5 (2017) 397 ITR 681 (DEL.) 6 Act 1961 7 SLP (C) Diary No. 14106 of 2018 2 On behalf of respondent, it has been urged that in view of dismissal of Special Leave Petition in relation to AY 2011-12, same course of action must follow in present case which deals with assessment for AY 2012-13. 4 We have heard submissions on behalf of appellant by Mr Zoheb Hossain, learned Counsel and for respondents by Mr Ajay Vohra, learned Senior Counsel. In order to appreciate nature of controversy, narration of facts would be instructive. 5 assessee is joint venture between Suzuki Motor Corporation and MSIL. shareholding of two companies in assessee was 70 per cent and 30 per cent. assessee was known upon incorporation as Suzuki Metal India Limited. Subsequently, with effect from 8 June 2005, its name was changed to SPIL. 6 On 28 November 2012, assessee filed its return of income declaring income of Rs. 212,51,51,156/-. return of income was filed in name of SPIL (no amalgamation having taken place on relevant date). 7 On 29 January 2013, scheme for amalgamation of SPIL and MSIL was approved by High Court with effect from 1 April 2012. terms of approved scheme provided that all liabilities and duties of transferor company shall stand transferred to transferee company without any further act or deed. On scheme 3 coming into effect, transferor was to stand dissolved without winding up. scheme stipulated that order of amalgamation will not be construed as order granting exemptions from payment of stamp duty or taxes or any other charges, if payable, in accordance with law. 8 On 2 April 2013, MSIL intimated assessing officer of amalgamation. case was selected for scrutiny by issuance of notice under Section 143(2) on 26 September 2013, followed by notice under Section 142(1) to amalgamating company. 9 On 22 January 2016, Transfer Pricing Officer8 passed order under Section 92CA (3) determining Arm s Length Price of royalty at 3 per cent and making adjustment of Rs. 78.97 crores in respect of royalty paid by assessee for relevant previous year. 10 On 11 March 2016, draft assessment order was passed in name of Suzuki Powertrain India Limited (amalgamated with Maruti Suzuki India Limited). draft assessment order sought to increase total income of assessee by Rs. 78.97 crores in accordance with order of TPO in order to ensure that 8 TPO 4 international transactions with regard to payment of royalty to Associated Enterprises is at Arm s Length. 11 MSIL participated in assessment proceedings of erstwhile amalgamating entity, SPIL, through its authorized representatives and officers. This is evident from copies of order sheets of assessment proceedings before assessing officer for AY 2012-13. Post amalgamation, on 30 September 2013, Chartered Accountants addressed communication to Commissioner of Income Tax, Circle 9(1), pursuant to notice under Section 143(2) for adjournment of assessment proceedings for AY 2012-13 until assessment proceedings for AY 2010-11 and AY 2011-12 were completed. On 27 October 2014, Deputy Commissioner of Income Tax Circle 9 (1) addressed communication to Principal Officer, SPIL seeking response to detailed questionnaire. Thereafter, on 4 September 2015, Deputy Commissioner of Income Tax Circle 16(1) called for disclosure of information in course of assessment for AY 2012-13. communication was addressed to: Principal Officer M/s Suzuki Power Train India Limited (Now known as M/s Maruti Suzuki India Limited). 12 On 8 October 2015, communication was addressed by DGM (Finance) for MSIL in response to notice under Section 142 (1) adverting to case of SPIL for AY 2012-13. 5 13 On 12 April 2016, MSIL filed its appeal before Dispute Resolution Panel9 as successor in interest of erstwhile SPIL, since amalgamated. Form 35A was verified by Mr Kenichi Ayukawa, Managing Director & CEO of MSIL. grounds of appeal before DRP did not allude to objection that draft assessment order was passed in name of SPIL (amalgamated with MSIL) or that this defect would render assessment proceedings invalid. 14 On 14 October 2016, DRP issued its order in name of MSIL (as successor in interest of erstwhile SPIL since amalgamated). 15 final assessment order was passed on 31 October 2016 in name of SPIL (amalgamated with MSIL) making addition of Rs. 78.97 crores to total income of assessee. While preferring appeal before Tribunal, assessee raised objection that assessment proceedings were continued in name of non-existent or merged entity SPIL and that final assessment order which was also issued in name of non-existent entity, would be invalid. 16 By its decision dated 6 April 2017, Tribunal set aside final assessment order on ground that it was void ab initio, having been passed in name of non-existent entity by assessing officer. decision of Tribunal was affirmed in appeal under Section 260A by Delhi High Court on 9 January 2018 following 9 DRP 6 its earlier decision in case of assessee for AY 2011-12. That has given rise to present appeal. 17 Mr Zoheb Hossain, learned Counsel appearing on behalf of appellant submitted that: (i) High Court was not justified in quashing final assessment order under Section 143 (3) only on ground that assessment was framed in name of amalgamating company, which was not in existence, ignoring fact that names of both amalgamated company and amalgamating company were mentioned in assessment order; (ii) Even on hypothesis that assessment order was framed incorrectly in name of amalgamating company, it would amount to mistake, defect or omission which is curable under Section 292B when assessment is, in substance and effect, in conformity with or according to intent and purpose of Act; (iii) During assessment proceedings and subsequent proceedings in appeal, amalgamating company was duly represented by amalgamated company. No prejudice was caused to any of parties by assessment order and hence rendering assessment order invalid on mere technicality would be incorrect in law. There was effective participation of assessee in assessment proceedings and there was no doubt in minds of those who 7 participated about entity in relation to which assessment proceedings took place; (iv) In Spice Entertainment Ltd. v Commissioner of Service Tax10 ( Spice Entertainment )11, final assessment order only referred to name of erstwhile entity which was non-existent and there was no reference to resulting company. In distinction, in present case, in both draft and final assessment orders, names of both amalgamating and amalgamated companies were mentioned; (v) In paragraph 11 of decision of Delhi High Court in Spice Entertainment, it was held that: 11. After sanction of scheme on 11th April, 2004, Spice ceases to exist w.e.f. 1st July, 2003. Even if Spice had filed returns, it became incumbent upon Income tax authorities to substitute successor in place of said dead person . When notice under Section 143(2) was sent, appellant/amalgamated company appeared and brought this fact to knowledge of AO. He, however, did not substitute name of appellant on record. Instead, Assessing Officer made assessment in name of M/s Spice which was non existing entity on that day. In such proceedings and assessment order passed in name of M/s Spice would clearly be void. Such defect cannot be treated as procedural defect. Mere participation by appellant would be of no effect as there is no estoppel against law. 10 2012 (280) ELT 43 (Del.) 11 This judgement has also been referred to as Spice Infotainment v. Commissioner of Income tax in Current Tax Reporter [(2012) 247 CTR (Del) 500] 8 From above extract, it would emerge that if assessment order had been passed on resulting company, it would not be void. Hence, in present case, issuance of notice under Section 143 (2) to SPIL cannot be considered to be jurisdictional effect when assessment order categorically mentions names of amalgamated and amalgamating companies; (vi) decision of Delhi High Court in Skylight Hospitality LLP v Assistant Commissioner of Income Tax, Circle-28(1), New Delhi12 ( Skylight Hospitality LLP ), which was confirmed by this Court on 6 April 201813 dealt with situation where notice under Section 148 was issued in name of non-existent private limited company. Court held that defect in recording name of non-existent company in notice under Section 148 was procedural defect or mistake curable under Section 292B, since no prejudice was caused to assessee. Delhi High Court distinguished decision in Spice Entertainment on ground that in that case even final assessment order was in name of non-existent company; (vii) In present case, both draft assessment order and final assessment order contained names of amalgamated and amalgamating companies and hence it cannot be held that final order is in name of non-existent company. order of TPO is not subject of challenge by assessee before any forum. directions of TPO were implemented by 12 (2018) 405 ITR 296 (Delhi) 13 (2018) 13 SCC 147 9 assessing officer in draft assessment order in accordance with Section 144C(1) which was then challenged by assessee before DRP under Section 144C(2). Since names of both amalgamated and amalgamating companies were mentioned in draft assessment order and final assessment order, there is no jurisdictional defect; (viii) In view decision of this Court in Kunhayammed v State of Kerala14 ( Kunhayammed ), though doctrine of merger does not apply when Special Leave Petition is dismissed before grant of leave to appeal, where order rejecting Special Leave Petition is speaking order and reasons have been assigned for rejecting petition, law stated or declared in such order will attract Article 141; and (ix) Consequently, in alternative, in view of order passed by this Court on 6 April 2018 in Skylight Hospitality LLP on one hand and order dated 16 July 2018 in case of present assessee for AY 2011-12 and earlier order dated 2 November 2017 in CIT, New Delhi v Spice Enfotainment Ltd.15 ( Spice Enfotainment Ltd ), there appears to be direct conflict of views on principle whether notice issued to non-existent company would suffer from jurisdictional error or whether it is mere defect or mistake which would be governed by Section 292B. 14 (2000) 6 SCC 359 15 Civil Appeal No. 285 of 2014 10 18 On other hand, Mr Ajay Vohra, learned Senior Counsel appearing on behalf of respondents submitted that: (i) Upon scheme of amalgamation being sanctioned, amalgamated company is dissolved without winding up, in terms of Section 394 of Companies Act 1956. amalgamating company ceases to exist in eyes of law [Saraswati Industrial Syndicate Ltd. v CIT16 ( Saraswati Industrial Syndicate Ltd. )]; (ii) amalgamating company cannot thereafter be regarded as "person" in terms of Section 2(31) of Act 1961 against whom assessment proceedings can be initiated and assessment order passed; (iii) jurisdictional notice under Section 143(2) of Act, pursuant to which assessing officer assumed jurisdiction to make assessment was issued in name of SPIL, non-existent entity, and was invalid. Hence initiation of assessment proceedings against non-existent entity was void ab initio. It has been held in following decisions that, if statutory notice is issued in name of non-existent entity, entire assessment would be nullity in eyes of law: - CIT v Intel Technology India (P) Ltd17 - PCIT v Nokia Solutions & Network India (P) Ltd. ( Nokia Solutions )18 - Spice Entertainment 16 (1990) 186 ITR 278 (SC) 17 [2016] 380 ITR 272 (Kar.) 18 [2018] 402 ITR 21 (Del) 11 - Similarly, notice to amalgamating company, subsequent to amalgamation becoming effective and despite fact of amalgamation having been brought to notice of assessing officer, is void ab initio as held in following decisions: - BDR Builders and Developers Pvt. Ltd. v ACIT19 - Rustagi Engineering Udyog (P.) Ltd. v DCIT20 - Khurana Engineering Ltd. v DCIT21 - Takshashila Realties (P) Ltd. v DCIT22 - Alamelu Veerappan v ITO23 ( Alamelu Veerappan ) (iv) order passed by TPO in name of SPIL, non-existent entity was invalid in eyes of law: SPIL ceased to be "eligible assessee", in terms of section 144C (15) (b) of Act. Consequently, there was no requirement to pass draft assessment order/reference to DRP etc.; and Furthermore, final assessment order dated 31 October 2016 is beyond limitation in terms of Section 153(1) read with Section 153 (4) of Act. (v) assessment framed in name of amalgamating Company is invalid: 19 [2017] 397 ITR 529 (Del) 20 [2016] 382 ITR 443 (Del) 21 [2014] 364 ITR 600 (Guj) 22 [2017] 77 taxmann.com 160 (Guj.) 23 [2018] 257 Taxman 72 (Madras) 12 In terms of Section 170(2) of Act, once amalgamation is effective, assessment in respect of income of amalgamating company upto appointed date has to be in name of amalgamated company as successor in interest of amalgamating company. Delhi High Court has held in Spice Entertainment that assessment framed in name of amalgamating company, which ceased to exist in eyes of law, was invalid and untenable in law. Such defect would not be cured in terms of Section 292B of Act. Further, fact that amalgamated company participated in assessment proceedings would not operate as estoppel. Following aforesaid decision of High Court in case of Spice Entertainment, Delhi High Court quashed assessment orders which were framed in name of amalgamating company, recording also name of amalgamated company, in following cases: -CIT v Dimension Apparels Pvt. Ltd24 ( Dimension Apparels ); affirmed by this Hon'ble Court vide Civil Appeal No. 3125 of 2015; - CIT v Micron Steels P. Ltd. ( Micron Steels )25; and -CIT v Micra India (P) Ltd. ( Micra India )26. 24 [2015] 370 ITR 288 (Del) 25 [2015] 372 ITR 386 (Del.) (MAG.) 26 [2015] 231 Taxman 809 (Del.) 13 aforesaid judgments of Delhi High Court have been approved by this Court in Civil Appeal No.285 of 2014 (& other connected matters). Thus applying doctrine of merger, law laid down by Delhi High Court has become precedent under Article 141. (vi) Respondent's case is squarely covered by decision of this Court in its own case for immediately preceding year: Delhi High Court by its judgment reported in Maruti Suzuki held in favour of Respondent by following judgment in case of Spice Entertainment. Further, Revenue's SLP was dismissed by this Court on 16 July 2018 in SLP(C) D.No.14106/2018, following judgment in Spice Entertainment. Relying on decision of this Hon'ble Court, in following decisions, assessments framed in case of non-existent entity (the amalgamating company) have been held to be non-est in eyes of law: - CIT v BMA Capfin Ltd.27 (Revenue's SLP dismissed against same vide order dated 19 November 201828 passed in SLP(C) Diary No.40486 of 2018). - Nokia Solutions 27 [2018] 100 taxmann.com 329 (Del.) 28 [2018] 100 taxmann.com 330 (SC) 14 (vii) judgment of Delhi High Court in Skylight Hospitality LLP is distinguishable and is not applicable to facts of present case: judgment was rendered on its own peculiar facts. In that case, tax evasion petition mentioned factum of conversion of company into Limited Liability Partnership29, which was also noticed in reasons to believe and approval of Principal Commissioner (before issuance of notice under Section 148 of Act). However, only because of clerical mistake, notice was wrongly issued in name of Skylight Hospitality Pvt. Ltd. instead of Skylight Hospitality LLP. In aforesaid facts, High Court held that this was irregularity and procedural/ technical lapse which was curable under section 292B of Act. decision in case of Spice Enfotainment was not followed on ground that it pertained to passing of assessment order in name of non-existent entity whereas case at hand dealt with notice under Section 148 of Act. SLP filed by assessee against decision of Delhi High Court was dismissed recording: "In peculiar facts of this case, we are convinced that wrong name given in notice was merely clerical error which could be corrected under Section 292B of Act 1961"; Subsequently, various High Courts, including Delhi High Court have in following decisions distinguished judgment in case of Skylight 29 LLP 15 Hospitality LLP and have quashed notice/assessment framed in name of non-existent entity: - Rajender Kumar Sehgal v ITO ( Rajender Kumar Sehgal )30 - Chandreshbhai Jayantibhai Patel v ITO ( Chandreshbhai Jayantibhai Patel )31; and - Alamelu Veerappan 19 While assessing merits of rival submissions, it is necessary at outset to advert to certain significant facets of present case: (i) Firstly, income which is sought to be subjected to charge of tax for AY 2012-13 is income of erstwhile entity (SPIL) prior to amalgamation. This is on account of transfer pricing addition of Rs. 78.97 crores; (ii) Secondly, under approved scheme of amalgamation, transferee has assumed liabilities of transferor company, including tax liabilities; (iii) Thirdly, consequence of scheme of amalgamation approved under Section 394 of Companies Act 1956 is that amalgamating company ceased to exist. In Saraswati Industrial Syndicate Ltd., principle has been formulated by this Court in following observations: 5. Generally, where only one company is involved in change and rights of shareholders and creditors are varied, it amounts to reconstruction or reorganisation of scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or amalgamation has no precise legal meaning. amalgamation is blending of two or more 30 [2019] 260 Taxman 412 (Del.) 31 (2019) 261 Taxman 137 (Guj) 16 existing undertakings into one undertaking, shareholders of each blending company become substantially shareholders in company which is to carry on blended undertakings. There may be amalgamation either by transfer of two or more undertakings to new company, or by transfer of one or more undertakings to existing company. Strictly amalgamation does not cover mere acquisition by company of share capital of other company which remains in existence and continues its undertaking but context in which term is used may show that it is intended to include such acquisition. See: Halsbury's Laws of England (4th edition volume 7 para 1539). Two companies may join to form new company, but there may be absorption or blending of one by other, both amount to amalgamation. When two companies are merged and are so joined, as to form third company or one is absorbed into one or blended with another, amalgamating company loses its entity. (iv) Fourthly, upon amalgamating company ceasing to exist, it cannot be regarded as person under Section 2(31) of Act 1961 against whom assessment proceedings can be initiated or order of assessment passed; (v) Fifthly, notice under Section 143 (2) was issued on 26 September 2013 to amalgamating company, SPIL, which was followed by notice to it under Section 142(1); (vi) Sixthly, prior to date on which jurisdictional notice under Section 143 (2) was issued, scheme of amalgamation had been approved on 29 January 2013 by High Court of Delhi under Companies Act 1956 with effect from 1 April 2012; (vii) Seventhly, assessing officer assumed jurisdiction to make assessment in pursuance of notice under Section 143 (2). notice was issued in name of amalgamating company in spite of fact that on 2 April 2013, 17 amalgamated company MSIL had addressed communication to assessing officer intimating fact of amalgamation. In above conspectus of facts, initiation of assessment proceedings against entity which had ceased to exist was void ab initio. 20 In Spice Entertainment, Division Bench of Delhi High Court dealt with question as to whether assessment in name of company which has been amalgamated and has been dissolved is null and void or, whether framing of assessment in name of such company is merely procedural defect which can be cured. High Court held that upon notice under Section 143 (2) being addressed, amalgamated company had brought fact of amalgamation to notice of assessing officer. Despite this, assessing officer did not substitute name of amalgamated company and proceeded to make assessment in name of non-existent company which renders it void. This, in view of High Court, was not merely procedural defect. Moreover, participation by amalgamated company would have no effect since there could be no estoppel against law : 11. After sanction of scheme on 11th April, 2004, Spice ceases to exit w.e.f. 1st July, 2003. Even if Spice had filed returns, it became incumbent upon Income tax authorities to substitute successor in place of said dead person . When notice under Section 143 (2) was sent, appellant/amalgamated company appeared and brought this fact to knowledge of AO. He, however, did not substitute name of appellant on record. Instead, Assessing Officer made assessment in name of M/s Spice which was non existing entity on that day. In such proceedings assessment order passed in name of M/s Spice would clearly be void. Such defect cannot be treated 18 as procedural defect. Mere participation by appellant would be of no effect as there is no estoppel against law. 12. Once it is found that assessment is framed in name of non-existing entity, it does not remain procedural irregularity of nature which could be cured by invoking provisions of Section 292B of Act. Following decision in Spice Entertainment, Delhi High Court quashed assessment orders which were framed in name of amalgamating company in: (i) Dimension Apparels; (ii) Micron Steels; and (iii) Micra India. 21 In Dimension Apparels, Division Bench of Delhi High Court affirmed quashing of assessment order dated 31 December 2010. Respondent had amalgamated with another company and thus, ceased to exist from 7 December 2009. Court rejected argument of Revenue that assessment was in substance and effect in conformity with Act by reason of fact that assessing officer had used correct nomenclature in addressing Assessee; stated fact that company had amalgamated and mentioned correct address of amalgamated company. It was Revenue s contention that omission on part of assessing officer to mention name of amalgamated company is procedural defect. Delhi High Court rejected this contention. In doing so, it relied on holding in Spice Entertainment, where High Court expressly clarified that framing of assessment against non-existing entity/person is jurisdictional 19 defect. Division Bench also relied on holding in Spice Entertainment that participation by amalgamated company in proceedings does not cure defect as there can be no estoppel in law , to affirm quashing of assessment order. 22 In Micron Steels, notice was issued to Micron Steels Pvt Ltd (original assessee) after it had amalgamated with Lakhanpal Infrastructure Pvt Ltd. Division Bench of Delhi High Court upheld setting aside of assessment orders, noting that Spice Entertainment is authority for proposition that completion of assessment in respect of non-existent company due to amalgamation order, would render assessment nullity. 23 In Micra India, original assessee Micra India Pvt. Ltd had amalgamated with Dynamic Buildmart (P) Ltd. Notice was issued to original assessee by Revenue after fact of amalgamation had been communicated to it. Court noted that though assessee had participated in assessment, original assessee was no longer in existence and assessment officer did not take remedial measure of transposing transferee as company which had to be assessed. Instead, original assessee was described as one in existence and order mentioned transferee s name below that of original assessee. Division Bench adverted to judgment in Dimension Apparels wherein High Court had discussed ruling in Spice Entertainment. It was held that this was 20 case where assessment was contrary to law, having been completed against non-existent company. 24 batch of Civil Appeals was filed before this Court against decisions of Delhi High Court, lead appeal being Spice Enfotainment. On 2 November 2017, Bench of this Court consisting of Hon ble Mr Justice Rohinton Fali Nariman and Hon ble Mr Justice Sanjay Kishan Kaul dismissed Civil Appeals and tagged Special Leave Petitions in terms of following order : Delay condoned. Heard learned Senior Counsel appearing for parties. We do not find any reason to interfere with impugned judgment(s) passed by High Court. In view of this, we find no merit in appeals and special leave petitions. Accordingly, appeals and special leave petitions are dismissed. 25 doctrine of merger results in settled legal position that judgment of Delhi High Court stands affirmed by above decision in Civil Appeals. 26 order of assessment in case of respondent for AY 2011-12 was set aside on same ground. This resulted in Special Leave Petition by Principal 21 Commissioner of Income Tax 6 Delhi32. Special Leave Petition was dismissed by two judge Bench of this Court consisting of Hon ble Mr Justice Rohinton Fali Nariman and Hon ble Ms Justice Indu Malhotra on 16 July 2018 in view of order dated 2 November 2017 governing Civil Appeal No. 285 of 2014 in Spice Enfotainment and connected batch of cases. Though, leave was not granted by this Court, reasons have been assigned by this Court for rejecting Special Leave Petition. law declared would attract applicability of Article 141 of Constitution. For, as this Court has held in Kunhayammed: 40 Where order rejecting SLP is speaking order, that is, where reasons have been assigned by this Court for rejecting petition for special leave and are stated in order still order remains one rejecting prayer for grant of leave to appeal. petitioner has been turned away at threshold without having been allowed to enter in appellate jurisdiction of this Court. Here also doctrine of merger would not apply. But law stated or declared by this Court in its order shall attract applicability of Article 141 of Constitution. reasons assigned by this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from view taken by this Court because permitting to do so would be subversive of judicial discipline and affront to order of this Court. However this would be so not by reference to doctrine of merger. 27 submission however which has been urged on behalf of Revenue is that contrary position emerges from decision of Delhi High Court in Skylight Hospitality LLP which was affirmed on 6 April 2018 by two judge Bench of this 32 Special Leave Petition (C) (D) No. 14106 of 2018 22 Court consisting of Hon ble Mr Justice K Sikri and Hon ble Mr Justice Ashok Bhushan33. In assessing merits of above submission, it is necessary to extract order dated 6 April 2018 of this Court: In peculiar facts of this case, we are convinced that wrong name given in notice was merely clerical error which could be corrected under Section 292B of Income Tax Act. special leave petition is dismissed. Pending applications stand disposed of. Now, it is evident from above extract that it was in peculiar facts of case that this Court indicated its agreement that wrong name given in notice was merely clerical error, capable of being corrected under Section 292B. peculiar facts of Skylight Hospitality emerge from decision of Delhi High Court34. Skylight Hospitality, LLP, had taken over on 13 May 2016 and acquired rights and liabilities of Skylight Hospitality Pvt. Ltd upon conversion under Limited Liability Partnership Act 200835. It instituted writ proceedings for challenging notice under Sections 147/148 of Act 1961 dated 30 March 2017 for AY 2010-2011. reasons to believe made reference to tax evasion report received from investigation unit of income tax department. facts were ascertained by investigation unit. reasons to believe referred to assessment order for AY 2013-2014 and findings recorded in it. Though notice under Sections 147/148 was issued in name of Skylight Hospitality Pvt. Ltd. (which had ceased to exist 33 Special Leave Petition (C) No. 7409 of 2018 34 Sky Light Hospitality LLP v Assistant Commissioner of Income Tax : (2018) 405 ITR 296 (Delhi) 35 LLP Act 2008 23 upon conversion into LLP), there was, as Delhi High Court held substantial and affirmative material and evidence on record to show that issuance of notice in name of dissolved company was mistake. tax evasion report adverted to conversion of private limited company into LLP. Moreover, reasons to believe recorded by assessing officer adverted to approval of Principal Commissioner. PAN number of LLP was also mentioned in some of documents. notice under Sections 147/148 was not in conformity with reasons to believe and approval of Principal Commissioner. It was in this background that Delhi High Court held that case fell within purview of Section 292B for following reasons: 18 There was no doubt and debate that notice was meant for petitioner and no one else. Legal error and mistake was made in addressing notice. Noticeably, appellant having received said notice, had filed without prejudice reply/letter dated 11.04.2017. They had objected to notice being issued in name of Company, which had ceased to exist. However, reading of said letter indicates that they had understood and were aware, that notice was for them. It was replied and dealt with by them. fact that notice was addressed to M/s. Skylight Hospitality Pvt. Ltd., company which had been dissolved, was error and technical lapse on part of respondent. No prejudice was caused. 28 decision in Spice Entertainment was distinguished with following observations: 19. Petitioner relies on Spice Infotainment Ltd. v. Commissioner of Service Tax, (2012) 247 CTR 500. 24 Spice Corp. Ltd., company that had filed return, had amalgamated with another company. After notice under Section 147/148 of Act was issued and received in name of Spice Corp. Ltd., Assessing Officer was informed about amalgamation but Assessment Order was passed in name of amalgamated company and not in name of amalgamating company. In said situation, amalgamating company had filed appeal and issue of validity of Assessment Order was raised and examined. It was held that assessment order was invalid. This was not case wherein notice under Section 147/148 of Act was declared to be void and invalid but case in which assessment order was passed in name of and against juristic person which had ceased to exist and stood dissolved as per provisions of Companies Act. Order was in name of non-existing person and hence void and illegal. 29 From reading of order of this Court dated 6 April 2018 in Special Leave Petition filed by Skylight Hospitality LLP against judgment of Delhi High Court rejecting its challenge, it is evident that peculiar facts of case weighed with this Court in coming to this conclusion that there was only clerical mistake within meaning of Section 292B. decision in Skylight Hospitality LLP has been distinguished by Delhi, Gujarat and Madras High Courts in: (i) Rajender Kumar Sehgal; (ii) Chandreshbhai Jayantibhai Patel; and (iii) Alamelu Veerappan. 25 30 There is no conflict between decisions of this Court in Spice Enfotainment (dated 2 November 2017)36 and in Skylight Hospitality LLP (dated 6 April 201837). 31 Mr Zoheb Hossain, learned Counsel appearing on behalf of Revenue urged during course of his submissions that notice that was in issue in Skylight Hospitality Pvt. Ltd. was under Sections 147 and 148. Hence, he urged that despite fact that notice is of jurisdictional nature for reopening assessment, this Court did not find any infirmity in decision of Delhi High Court holding that issuance of notice to erstwhile private limited company which had since been dissolved was only mistake curable under Section 292B. close reading of order of this Court dated 6 April 2018, however indicates that what weighed in dismissal of Special Leave Petition were peculiar facts of case. Those facts have been noted above. What had weighed with Delhi High Court was that though notice to reopen had been issued in name of erstwhile entity, all material on record including tax evasion report suggested that there was no manner of doubt that notice was always intended to be issued to successor entity. Hence, while dismissing Special Leave Petition this Court observed that it was peculiar facts of case which led court to accept finding that wrong name given in notice was merely technical error which could be corrected 36 Civil Appeal No. 285 of 2014 and connected cases 37 Special Leave Petition No. 7409 of 2018 26 under Section 292B. Thus, there is no conflict between decisions in Spice Enfotainment on one hand and Skylight Hospitality LLP on other hand. It is of relevance to refer to Section 292B of Income Tax Act which reads as follows: 292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to intent and purpose of this Act. In this case, notice under Section 143(2) under which jurisdiction was assumed by assessing officer was issued to non-existent company. assessment order was issued against amalgamating company. This is substantive illegality and not procedural violation of nature adverted to in Section 292B. In this context, it is necessary to advert to provisions of Section 170 which deal with succession to business otherwise than on death. Section 170 provides as follows: 170. (1) Where person carrying on any business or profession (such person hereinafter in this section being referred to as predecessor) has been succeeded therein by any other person (hereinafter in this section referred to as successor) who continues to carry on that business or profession, 27 (a) predecessor shall be assesseed in respect of income of previous year in which succession took place up to date of succession; (b) successor shall be assesseed in respect of income of previous year after date of succession. (2) Notwithstanding anything contained in sub-section (1), when predecessor cannot be found, assessment of income of previous year in which succession took place up to date of succession and of previous year preceding that year shall be made on successor in like manner and to same extent as it would have been made on predecessor, and all provisions of this Act shall, so far as may be, apply accordingly. (3) When any sum payable under this section in respect of income of such business or profession for previous year in which succession took place up to date of succession or for previous year preceding that year, assesseed on predecessor, cannot be recovered from him, 99[Assessing] Officer shall record finding to that effect and sum payable by predecessor shall thereafter be payable by and recoverable from successor and successor shall be entitled to recover from predecessor any sum so paid. (4) Where any business or profession carried on by Hindu undivided family is succeeded to, and simultaneously with succession or after succession there has been partition of joint family property between members or groups of members, tax due in respect of income of business or profession succeeded to, up to date of succession, shall be assesseed and recovered in manner provided in section 171, but without prejudice to provisions of this section. Explanation. For purposes of this section, income includes any gain accruing from transfer, in any manner whatsoever, of business or profession as result of succession Now, in present case, learned Counsel appearing on behalf of respondent submitted that SPIL ceased to be eligible assessee in terms of provisions of Section 144C read with clause (b) of sub section 15. Moreover, it has been urged that 28 in consequence, final assessment order dated 31 October 2016 was beyond limitation in terms of Section 153(1) read with Section 153 (4). For purposes of present proceeding, we do not consider it necessary to delve into that aspect of matter having regard to reasons which have weighed us in earlier part of this judgment. 32 On behalf of Revenue, reliance has been placed on decision of this Court in Commissioner of Income Tax, Shillong v Jai Prakash Singh38 ( Jai Prakash Singh ). That was case where assessee did not file return for three assessment years and died in meantime. His son who was one of legal representatives filed returns upon which assessing officer issued notices under Section 142 (1) and Section 143 (2). These were complied with and no objections were raised to assessment proceedings. assessment order mentioned names of all legal representatives and assessment was made in status of individual. In appeal, it was contended that assessment proceedings were void as all legal representatives were not given notice. In this backdrop, two judge Bench of this Court held that assessment proceedings were not null and void, and at worst, that they were defective. In this context, reliance was placed on decision of Federal Court in Chatturam v CIT39 holding that jurisdiction to assess and liability to pay tax are not conditional on validity of notice : liability to pay tax is founded in charging sections and not in machinery 38 (1996) 3 SCC 525 39 (1947) 15 ITR 302 (FC) 29 provisions to determine amount of tax. Reliance was also placed on decision in Maharaja of Patiala v CIT40 ( Maharaja of Patiala ). That was case where two notices were issued after death of assessee in his name, requiring him to make return of income. notices were served upon successor Maharaja and assessment order was passed describing assessee as His Highness late Maharaja of Patiala . successor appealed against assessment contending that since notices were sent in name of Maharaja of Patiala and not to him as legal representative of Maharaja of Patiala, assessments were illegal. Bombay High Court held that successor Maharaja was legal representative of deceased and while it would have been better to so describe him in notice, notice was not bad merely because it omitted to state that it was served in that capacity. Following these two decisions, this Court in Jai Prakash Singh held that omission to serve or any defect in service of notices provided by procedural provisions does not efface or erase liability to pay tax where liability is created by distinct substantive provision. omission or defect may render order irregular but not void or illegal. Jai Prakash Singh and two decisions that it placed reliance upon were evidently based upon specific facts. Jai Prakash Singh involved situation where return of income had been filed by one of legal representatives to whom notices were issued under Section 142(1) and 143(2). No objection was raised by legal representative who had filed return that notice should also to be served to other legal representatives of deceased assessee. No 40 (1943) 11 ITR 202 (Bombay) 30 objection was raised before assessing officer. Similarly, decision in Maharaja of Patiala was case where notice had been served on legal representative, successor Maharaja and Bombay High Court held that it was not void merely because it omitted to state that it was served in that capacity. 33 In present case, despite fact that assessing officer was informed of amalgamating company having ceased to exist as result of approved scheme of amalgamation, jurisdictional notice was issued only in its name. basis on which jurisdiction was invoked was fundamentally at odds with legal principle that amalgamating entity ceases to exist upon approved scheme of amalgamation. Participation in proceedings by appellant in circumstances cannot operate as estoppel against law. This position now holds field in view of judgment of co-ordinate Bench of two learned judges which dismissed appeal of Revenue in Spice Enfotainment on 2 November 2017. decision in Spice Enfotainment has been followed in case of respondent while dismissing Special Leave Petition for AY 2011-2012. In doing so, this Court has relied on decision in Spice Enfotainment. 34 We find no reason to take different view. There is value which court must abide by in promoting interest of certainty in tax litigation. view which has been taken by this Court in relation to respondent for AY 2011-12 must, in our view be adopted in respect of present appeal which relates to AY 2012-13. Not doing so will only result in uncertainty and displacement of settled expectations. There 31 is significant value which must attach to observing requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable. 35 For above reasons, we find no merit in appeal. appeal is accordingly dismissed. There shall be no order as to costs. J. [DR DHANANJAYA Y CHANDRACHUD] J. [INDIRA BANERJEE] New Delhi; July 25, 2019. 32 Pr. Commissioner of Income-tax, New Delhi v. Maruti Suzuki India Limited