Facts of the Case

  • The Respondent-Assessee, Sony Mobile Communications India Pvt. Ltd., was engaged in importing, selling, and distributing mobile phones in India and providing post-sale support services.
  • For AY 2009-10 and 2010-11, the Assessee entered into international transactions with Associated Enterprises (AEs), leading to reference to the Transfer Pricing Officer (TPO).
  • The TPO proposed an upward adjustment of ₹56.30 crore.
  • The Dispute Resolution Panel (DRP) upheld the adjustment.
  • The Assessee approached ITAT, which granted partial relief.
  • The matter was remanded by the High Court earlier for reconsideration.
  • Meanwhile:
    • Name changed from Sony Ericsson Mobile Communications (India) Pvt. Ltd. to Sony Mobile Communications (India) Pvt. Ltd.
    • Later merged with Sony India Pvt. Ltd.
    • Revenue was informed of merger before assessment order.
  • Despite this, the Assessing Officer passed the final assessment order in the name of the non-existent entity.

Issues Involved

  1. Whether assessment framed in the name of a non-existent/amalgamated company is valid in law.
  2. Whether such defect is curable under Section 292B of the Income Tax Act, 1961.
  3. Whether ITAT was justified in admitting an additional legal ground beyond remand scope.
  4. Applicability of judicial precedents like:
    • Pr. Commissioner of Income Tax vs Maruti Suzuki India Ltd.
    • Spice Entertainment Ltd. vs CIT

Petitioner’s Arguments (Revenue)

  • ITAT exceeded jurisdiction by allowing an additional ground beyond limited remand.
  • The notice under Section 143(2) was issued correctly; hence assessment defect is procedural.
  • Error in name is curable under Section 292B.
  • PAN remained same; identity of assessee was not in dispute.
  • Case distinguishable from Maruti Suzuki India Ltd. since jurisdiction was validly assumed.

Respondent’s Arguments (Assessee)

  • Issue is settled by binding precedent in Maruti Suzuki India Ltd..
  • Assessment on non-existent entity is void ab initio and not curable.
  • Revenue was informed multiple times about amalgamation.
  • Certainty and consistency in tax law must be maintained.

Court Findings / Order

  • On Additional Ground:
    ITAT was justified in admitting the additional ground since it was a pure legal issue arising from existing facts.
  • On Assessment Validity (Divergent Views):
    • One view: Differences from Maruti Suzuki require reconsideration; question of law arises.
    • Other view: Issue is settled; assessment on non-existent entity is void and cannot be cured.
  • Final Position:
    Due to difference of opinion between judges, the matter was directed to be placed before appropriate bench for framing substantial question of law.

Important Clarifications

  • Assessment on a non-existent entity may be treated as:
    • Jurisdictional defect (not procedural)
    • Not curable under Section 292B
  • Intimation of amalgamation is critical; once informed, Revenue must act accordingly.
  • Participation of assessee does not validate a void order.
  • Legal principle: No estoppel against law.

Sections Involved

  • Section 143(3) – Assessment
  • Section 144C – DRP Proceedings
  • Section 292B – Return of income, etc., not to be invalid on technical grounds
  • Section 139A – PAN
  • Companies Act (Section 23 of 1956 Act – effect of change of name)

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:1619-DB/RSE18052021ITA1192019_162625.pdf


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