The central legal point established in the judgment is that issuing a notice and passing an order of assessment in the name of a non-existent entity, despite knowledge of its amalgamation, renders the order of assessment void.

JUDGMENT

Dhiraj Singh Thakurf, J. - The Petitioner challenges the notice dated 31st MarchF 2021 issued under Section 14 of the Income Tax ActF 1961 ('the Act') as also the order of assessment passed under Section 147 r8w Sections 144 and 144B of the Act dated 31st MarchF 2022F for the assessment year 2017-1 F on the ground that the notice under Section 14 of Act was issued in the name of a non-existent company.

2. Briefly stated the material facts are as under:

A notice dated 31st MarchF 2021 under Section 14 of the Act for the assessment year 2017-1 was issued in the name of Laysin BPO Pvt. Ltd. proposing to reopen the assessment on the ground that income had escaped assessment within the meaning of Section 147 of the Act.

In response to the said noticeF the Petitioner herein CLSA India Private Limited informed the Respondents about the non- existence of the assessee Laysin BPO Pvt. Ltd. on account of its amalgamation with the Petitioner CLSA India Private Limited. The Respondents stood informed that the merger had taken place with effect from 01st AprilF 2015 vide order of this Court dated 16th AprilF 2016 andF thereforeF sought the dropping of the proceedings initiated against the said non-existent entity.

3. It is stated that the factum of the amalgamation was already within the knowledge of the revenue as is reflected from the order of assessment dated 16th DecemberF 2017 for the assessment year 2015-16 which show M8s CLSA India Pvt. Ltd. as the successor of M8s Laysin BPO Pvt. Ltd.. It is further stated that even for the assessment year 2016-17F return was fled by the Petitioner in which the factum of the amalgamation of Laysin BPO Pvt. Ltd. was reflected. For the assessment year 2017-1 F the Petitioner states that it fled a response to e-verifcationF informing the Respondents yet again regarding the non-existence of the entity on account of its merger with the Petitioner herein.

4. Be that as it mayF it is thus clear that the notice under Section 14 of the Act which forms the basis for reassessment proceedings was issued in the name of a non-existent entity and despite the fact that the Respondents had the knowledge regarding the non-existence of the said entity and despite having been informedF the order of assessment was passed in the name of the Petitioner while at the same timeF mentioning the name of the assessee as Laysin BPO Pvt. Ltd.

5. This is clearly untenable in view of the Apex Court judgment in Saraswati Industrial Syndicate Ltd. v8s. CIT 186 ITR 278 (SC).F wherein the following principles were formulated:

'5. GenerallyF where only one company is involved in change and the rights of the shareholders and creditors are variedF it amounts to reconstruction or reorganisation or 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. The amalgamation is a blending of two or more existing undertakings into one undertakingF the shareholders of each blending company become substantially the shareholders in the company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more undertakings to a new companyF or by the transfer of one or more undertakings to an existing company. Strictly 'amalgamation' does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition. See: Halsbury's Laws of England (4th edition volume 7 para 1539). Two companies may join to form a new companyF but there may be absorption or blending of one by the otherF both amount to amalgamation. When two companies are merged and are so joinedF as to form a third company or one is absorbed into one or blended with anotherF the amalgamating company loses its entity.'

In the case of Spice Entertainment Ltd.