Assessment on a company that no longer exists: nullity or curable defect?

A scheme is sanctioned. The transferor company dissolves. Somewhere in the Income-tax Department a file continues to move under the dead company’s name, and eighteen months later an assessment order is signed in that name.

Whether that order is worth anything has been litigated for fifteen years, three times in the Supreme Court, and the answer is now reasonably clear. It is not “amalgamation makes the assessment void”, which is how the proposition is usually stated on both sides. It is narrower and more uncomfortable: the question is almost always whether the Assessing Officer was told, and by whom, and for which assessment year.

That is why Maruti Suzuki and Mahagun Realtors can both be right. It is why section 170(2A) changed less than the Revenue hoped. And it is why the single most valuable thing an adviser does in a merger is not drafting the scheme but papering the intimation.

Key points

• The proposition from Spice and Maruti Suzuki: where the officer knew, an assessment in the dead company’s name is a jurisdictional nullity, not a procedural irregularity, and section 292B cannot cure it.
• Mahagun Realtors did not overrule either. Its ratio, at paragraph 42, is that the answer depends on the terms of the amalgamation and the facts of each case. On its facts the assessee had not intimated for that year, had written “NOT APPLICABLE” against business reorganisation in its return, and had litigated as the predecessor through every forum.
• Section 292B operates on description, not existence. It cures a wrong name for a person who exists; it cannot supply jurisdiction over a person who does not.
• Sky Light Hospitality is a “peculiar facts” order, and the Supreme Court said so in Maruti Suzuki at paragraph 31. What confines it is its record, not that it concerned an LLP conversion: section 58(4)(c) of the LLP Act deems the company dissolved on conversion.
• Section 170(2A) deems proceedings on the predecessor during “pendency” to be on the successor. Pendency ends when the order reaches the Principal Commissioner or Commissioner. A proceeding initiated after that is outside the provision; one initiated during pendency may be completed afterwards and still be covered.
• No High Court has been reported applying section 170(2A) to save such an assessment. The only two engagements, Gujarat in Kunvarji Fincorp and ITAT Bangalore in SKF Engineering, held it inapplicable on dates.
• Filing Form ITR-A under section 170A does not cure the defect: Happy Suppliers (ITAT Kolkata, 12 February 2026).
• The High Courts are not unanimous. On the knew-and-proceeded-anyway case they are uniform. On the never-told case, Madras (Oasys Green Tech), Calcutta (Shaw Wallace) and ITAT Indore (Goutam Medicose) have gone against the assessee.
• A strike-off is different: with an NCLT restoration under section 252(3) of the Companies Act the existence problem is cured retrospectively (Ravinder Kumar Aggarwal). Without one, it is not.
• Reliance Industries (Bombay High Court, 14 February 2025) is reported to be under appeal in the Supreme Court. Check its status before relying on it.
• From 1 April 2026 the provisions are sections 313 and 522 of the Income-tax Act, 2025. Neither the new DIN protection nor the new approvals protection reaches a defect of existence.

What is the defect, exactly?

On an approved amalgamation the transferor ceases to exist. There is no person answering to its name, no legal personality to bear a liability and none to be served. The Income-tax Act contains an express deeming provision for the death of an individual, in section 159, under which proceedings may be taken against the legal representative and the legal representative is deemed to be an assessee. It contains nothing equivalent for a dissolved company, outside the narrow window created in 2022.

That absence is the backbone of the whole line of authority, and it is why the Delhi and Bombay High Courts keep saying, in one form of words or another, that there is no provision in the Income-tax Act to make an assessment upon a dissolved company.

The question that follows is what kind of defect this is. If it is a misdescription, a wrong name on a document intended for a person who exists, then section 292B is available and the proceeding stands. If it is an absence of the person, then there is nothing for section 292B to operate on, and the proceeding is a nullity that no amount of participation, consent or subsequent correction can repair. Fifteen years of litigation has been about which of those two it is, and the answer has turned out to depend on the facts.

What did Spice decide, and what happened to it?

Spice Entertainment Ltd v. Commissioner of Service Tax (ITA 475 and 476 of 2011, Delhi High Court, decided 3 August 2011, A.K. Sikri and M.L. Mehta, JJ.) is the foundation. It is reported as Spice Infotainment Ltd v. CIT (2012) 247 CTR 500 (Del), which is the form in which the Supreme Court cited it in Mahagun Realtors, and the respondent’s description in the Delhi cause title is a registry mis-description: these were appeals under section 260A of the Income-tax Act.

Returns for assessment years 2002-03 and 2003-04 had been filed by Spice Corp Ltd. A scheme of amalgamation was sanctioned, effective from 1 July 2003. A notice under section 143(2) issued, the amalgamated company appeared and brought the amalgamation to the Assessing Officer’s notice, and the officer neither substituted the successor nor stopped: he framed the assessment in March 2005 in the name of Spice Corp Ltd.

The Court’s holdings are short and have been quoted ever since:

The framing of assessment against a non-existing entity/person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a “dead person”.

Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act.

Mere participation by the appellant would be of no effect as there is no estoppel against law.

And, as the Supreme Court later quoted it, that “even if Spice had filed the returns, it became incumbent upon the Income tax authorities to substitute the successor in place of the said ‘dead person’”.

One paragraph of Spice is routinely overlooked, and it matters when a client asks what the Revenue can do next. The Court held that it would be incumbent upon the Assessing Officer to first substitute the name of the appellant in place of the dissolved company and then issue notice, subject to limitation. Spice is not authority that the Revenue is remediless. It is authority that the Revenue must begin again against the right person, within time, and that the passage of time is its own problem.

The Department’s appeal failed. In CIT, New Delhi v. M/s Spice Enfotainment Ltd (Civil Appeal No. 285 of 2014 and connected matters, decided 2 November 2017, R.F. Nariman and Sanjay Kishan Kaul, JJ.) the Supreme Court said: “Delay condoned. Heard the learned Senior Counsel appearing for the parties. We do not find any reason to interfere with the impugned judgment(s) passed by the High Court. In view of this, we find no merit in the appeals and special leave petitions. Accordingly, the appeals and special leave petitions are dismissed.”

Because the Civil Appeals were dismissed, the doctrine of merger applies and the Delhi High Court’s judgment stands affirmed, as Maruti Suzuki records at paragraph 25. A separate point is sometimes run together with that one and should not be. At paragraph 26 Maruti Suzuki deals with a different order, the dismissal on 16 July 2018 of the Revenue’s special leave petition in the assessee’s own case for assessment year 2011-12, and holds that although leave was not granted, reasons had been assigned, so that applying Kunhayammed v. State of Kerala (2000) 6 SCC 359 the law declared would attract Article 141. That reasoning belongs to the 2018 order, not to the 2017 dismissal of the Spice appeals.

Following Spice, the Delhi High Court quashed assessments in Dimension Apparels Pvt Ltd (2015) 370 ITR 288 (Del), which was itself affirmed, and in Micron Steels P. Ltd and Micra India (P) Ltd.

What did Maruti Suzuki hold?

Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Limited (Civil Appeal No. 5409 of 2019, decided 25 July 2019, Dr D.Y. Chandrachud and Indira Banerjee, JJ., reported (2019) 416 ITR 613 and cited by the Delhi High Court as (2020) 18 SCC 331) concerned assessment year 2012-13.

The facts are worth setting out precisely, because the disclosure point is what everything later turned on. Suzuki Powertrain India Limited filed its return on 28 November 2012. The scheme of amalgamation into Maruti Suzuki India Limited was approved by the Delhi High Court on 29 January 2013, effective from 1 April 2012. At paragraph 8 the Supreme Court recorded: “On 2 April 2013, MSIL intimated the assessing officer of the amalgamation.” Notwithstanding that intimation, the jurisdictional notice under section 143(2) issued on 26 September 2013 in the amalgamating company’s name, and the assessment order followed on 31 October 2016, carrying a transfer pricing addition of Rs 78.97 crore.

The operative holdings:

The initiation of assessment proceedings against an entity which had ceased to exist was void ab initio.

In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation.

Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law.

On section 292B, at paragraph 31 of the judgment as delivered, which is paragraph 32 of the report at (2020) 18 SCC 331:

In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B.

There is a fourth holding worth keeping for a different purpose. At paragraph 34 the Court said, having noted that a special leave petition for the earlier year had been dismissed, that not observing the requirement of consistency “will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty.” That is useful wherever a group has a favourable earlier year.

Note two words in the estoppel holding: “in the circumstances”. They were doing work, and three years later the Court showed what work.

What does section 292B do, and what can it not do?

The section reads:

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 the 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 the intent and purpose of this Act.

The test that emerges from the decided cases, and this is a reading rather than a quotation, is that section 292B operates on description and not on existence. It cures a mistake in naming a person who exists and who was intended to be proceeded against. It cannot supply jurisdiction over a person who does not exist, because there is then no person in respect of whom the proceeding can be in substance and effect in conformity with the intent and purpose of the Act.

On that footing the section has been held unavailable in a consistent series: Spice; Maruti Suzuki at paragraph 31; PCIT-7 v. Vedanta Ltd (ITA 88/2022, Delhi High Court, 17 January 2025, Yashwant Varma and Dharmesh Sharma, JJ.), where Cairn India Ltd had amalgamated into Vedanta with effect from 1 April 2017, the Transfer Pricing Officer had been intimated on 13 December 2017 and had nonetheless passed his order on 29 October 2018 in Cairn’s name, the Court holding that proceedings drawn in their name would be a nullity and cannot be validated by resort to section 292B, and that the defect was not curable under section 154 either; PCIT-1 v. Boeing India Pvt Ltd (ITA 586/2025, Delhi High Court, 16 March 2026, V. Kameswar Rao and Vinod Kumar, JJ.), where the Court held that an assessment order in the name of a non-existent entity does not translate to a curable defect under section 292B and that departmental portal or system limitations are no answer; the batch judgment of 26 September 2024 (Delhi High Court, Yashwant Varma and Ravinder Dudeja, JJ.) in International Hospital Ltd v. DCIT (ITA 116/2023) with a long series of connected writ petitions, among them Nokia Solutions and Networks India Pvt Ltd v. DCIT (W.P.(C) 5021/2022) and Religare Enterprises Ltd v. ACIT (W.P.(C) 13807/2022), holding that section 292B cannot cure a lacuna affecting jurisdiction; Inox Wind Energy Limited v. Additional CIT (C/SCA/16641/2021, Gujarat High Court, 31 January 2023, Sonia Gokani and Sandeep N. Bhatt, JJ.), where the assessee had written on four occasions and the Court held that once it is found that assessment is framed in the name of a non-existing entity, it does not remain a procedural irregularity which could be cured by invoking section 292B; and Kunvarji Fincorp Private Limited v. DCIT (SCA Nos. 903, 1110, 1111 and 1113 of 2022, Gujarat High Court, 16 January 2023, Sonia Gokani and Sandeep N. Bhatt, JJ.), which distinguished section 292B as governing a procedural violation from the substantive illegality of a notice to a non-existent entity.

How wide is Sky Light Hospitality?

Narrower than it is usually made to sound, and the Supreme Court has itself said so.

The Supreme Court’s order in Sky Light Hospitality LLP v. ACIT (SLP (C) No. 7409 of 2018, dated 6 April 2018) reads, in its entirety on the point:

In the peculiar facts of this case, we are convinced that wrong name given in the notice was merely a clerical error which could be corrected under Section 292B of the Income Tax Act. The special leave petition is dismissed.

In Maruti Suzuki the Court dealt with the apparent conflict directly. At paragraph 30 it held that there is no conflict between the decisions in Spice Enfotainment and in Skylight Hospitality LLP. At paragraph 31 it explained why: what weighed in the dismissal of the special leave petition were the peculiar facts of the case, and all the material on record including the tax evasion report suggested that there was no manner of doubt that the notice was always intended to be issued to the successor entity.

So Sky Light is authority for a narrow proposition: where the contemporaneous record, made before the notice, demonstrably identifies the successor as the intended addressee, the misdescription is clerical. In the Delhi High Court below, the tax evasion report, the recorded reasons, the approval under section 151 and the transfer order under section 127 had all recorded the conversion, and the LLP’s own permanent account number appeared in some of the documents.

There is one point that should be resisted rather than made. It is sometimes said that Sky Light is confined to LLP conversions because the LLP continues the company. It does not. Section 58(4)(c) of the Limited Liability Partnership Act, 2008 provides that on conversion the company shall be deemed to be dissolved and removed from the records of the Registrar of Companies, and both courts described it that way: Maruti Suzuki at paragraph 27 records that the notice was issued in the name of a company “which had ceased to exist upon conversion into an LLP” and quotes the Delhi High Court’s finding that the notice was addressed to “a company which had been dissolved”. What confines Sky Light is its record, not the form of the reorganisation. The Delhi High Court has since declined to extend it, in Vedanta expressly (“The facts of the present case are clearly not akin to what prevailed in Sky Light”) and in Boeing India.

And the assessee’s side of the conversion fact pattern has also succeeded where the disclosure was made. In DCIT v. Prestige Holiday Resorts Private Limited (ITA Nos. 4161 and 4162/MUM/2025 with cross objections, ITAT Mumbai, 28 October 2025) a private company had converted into an LLP with effect from 2 February 2017, the conversion certificate had been filed with the Assessing Officer by letter of 14 June 2018, and orders were nonetheless passed on 30 December 2018 in the erstwhile company’s name. They were quashed, Mahagun distinguished and Maruti Suzuki applied. The difference between that case and Sky Light is disclosure, not the nature of the reorganisation.

What did Mahagun Realtors decide?

This is the Department’s best case and it should be met at full strength, not minimised.

Principal Commissioner of Income Tax (Central)-2 v. M/s Mahagun Realtors (P) Ltd (decided 5 April 2022, Uday Umesh Lalit and S. Ravindra Bhat, JJ., judgment by Bhat, J., reported (2022) 443 ITR 194 (SC), 2022 SCC OnLine SC 407 and 2022 LiveLaw (SC) 346) concerned assessment year 2006-07, and that single fact drives the judgment. The civil appeal number is commonly given as 2716 of 2022, though the judgment as reported prints it blank, the appeal having arisen from a special leave petition.

Mahagun Realtors Pvt Ltd amalgamated with Mahagun India Pvt Ltd by an order of the Delhi High Court dated 10 September 2007, with effect from 1 April 2006. There was a survey on 20 March 2007, in the course of which a spiral diary of unrecorded receipts was found and the group, through its managing director, surrendered Rs 16.9589 crore for assessment year 2007-08; the merger application had already been filed in the High Court by then. A search under section 132 followed on 27 August 2008. The original return for assessment year 2006-07 had been filed on 30 June 2006 in the predecessor’s name. The return filed in response to notice, on 28 May 2010, was again in the predecessor’s name, under its permanent account number, and in the “Business Reorganization” column of the form the assessee entered “NOT APPLICABLE” against amalgamation. Letters intimating the amalgamation, dated 22 and 27 July 2010, related to assessment year 2007-08 and not to 2006-07. The assessment order named both the amalgamating and the amalgamated company. And the appeals before the CIT(A) and the Tribunal were themselves filed as “M/s Mahagun Realtors (Represented by Mahagun India Pvt Ltd, after amalgamation)”.

The Court began, at paragraph 33, by accepting the premise: there is no doubt that MRPL amalgamated with MIPL and ceased to exist thereafter, an established fact and not in contention. It then distinguished Spice and Maruti Suzuki at paragraph 34:

Firstly, in both the relied upon cases, the assessee had duly informed the authorities about the merger of companies and yet the assessment order was passed in the name of amalgamating/non-existent company.

However, in the present case, for AY 2006-07, there was no intimation by the assessee regarding amalgamation of the company.

On 28.05.2010, the assessee filed its ROI in the name of MRPL, and in the “Business Reorganization” column of the form mentioned “not applicable” in amalgamation section.

At paragraph 35: “However, in the present case, the participation in proceedings was by MRPL, which held out itself as MRPL.”

At paragraph 41: “In the light of the facts, what is overwhelmingly evident is that the amalgamation was known to the assessee, even at the stage when the search and seizure operations took place”; that a return was filed which suppressed the fact of amalgamation; and that “the mere choice of the AO in issuing a separate order in respect of MRPL, in these circumstances, cannot nullify it.”

The much-quoted passage on continuity is this: “In the case of amalgamation, the outer shell of the corporate entity is undoubtedly destroyed; it ceases to exist. Yet, in every other sense of the term, the corporate venture continues, enfolded within the new or the existing transferee entity.”

And the ratio, at paragraph 42:

Whether corporate death of an entity upon amalgamation per se invalidates an assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 … but would depend on the terms of the amalgamation and the facts of each case.

The disposal is worth noting too, because it is sometimes overstated. The High Court’s order was set aside and the matter was restored to the Tribunal to hear the Revenue’s appeal on issues other than the nullity of the assessment order, on merits. The Supreme Court did not decide the additions.

How far does Mahagun actually reach?

Not as far as the Revenue argues, and further than assessees like.

Mahagun did not overrule, doubt or narrow Maruti Suzuki. It is a fact-sensitive decision, and the Court set out thirteen distinguishing circumstances. The ones that matter are these: no intimation for the specific assessment year; a return positively denying reorganisation; a search context with income surrendered while the merger application was already pending; the assessee holding itself out as the predecessor through every forum; and an assessment order that named both entities.

Two further limbs are the Revenue’s sharpest and are usually left out. The first is the terms of the scheme: the Delhi High Court’s order of 10 September 2007 under section 394 transferred all the liabilities and duties of the transferor companies so as to become the liabilities and duties of the transferee. That is the first limb of the paragraph 42 ratio, “the terms of the amalgamation”, and it is doing work. The second is the contrast the assessee itself supplied: for assessment years 2007-08 and 2008-09 separate proceedings were initiated against the transferee, and the proceedings against the transferor were dropped, because the amalgamation had been disclosed for those years. The assessee knew perfectly well how to disclose, and did so for the other years. Anyone arguing against Mahagun has to meet that.

What it changed is the mode of reasoning. Before Mahagun the answer could be given by reflex: the company is dead, so the order is void. After paragraph 42 the answer depends on the terms of the amalgamation and the facts of each case. That is a real shift, and it puts the assessee’s own conduct into the frame.

The practical consequence is that Mahagun is the Revenue’s case wherever the Assessing Officer was not told, and is weak wherever intimation is on the record. Every Tribunal and High Court decision since has drawn the line in exactly that place. ITAT Pune in Barclays Global Service Centre Pvt Ltd v. DCIT (ITA No. 46/PUN/2021 with cross objection, 2 January 2023) distinguished it because the factum of amalgamation was put to notice of the Assessing Officer. ITAT Mumbai in ACIT v. Viacom18 Media Private Limited (ITA No. 5667/MUM/2024 with cross objection, 15 October 2025), where the assessee had written to two Assessing Officers on three dates in late 2016 and the order was nevertheless passed on 30 December 2016 in the merged company’s name with additions of roughly Rs 259 crore, held Mahagun confined to cases of non-intimation and suppression, and also rejected the Revenue’s attempt to rely on Mahagun’s tolerance of an order naming both entities, since no such order had been passed. ITAT Mumbai in Patil Construction and Infrastructure Limited v. DCIT (ITA Nos. 303/Mum/2023 and 98/Mum/2023, 16 April 2024) held that once an intimation has been given to the Assessing Officer that the amalgamating company is not in existence and has been amalgamated much prior to commencement of proceedings, then no order can be passed in the name of a non-existent entity. ITAT Indore applied the principle to a demerger in ACIT v. M/s Keti Construction (India) Ltd (ITA No. 63/Ind/2021, 7 August 2023), where the Assessing Officer’s own recorded reasons acknowledged the demerger.

And the Bombay High Court in Reliance Industries Limited v. Dy CIT (decided 14 February 2025, M.S. Sonak and Jitendra Jain, JJ., neutral citation 2025:BHC-OS:2521-DB) distinguished Mahagun on the ground that there the assessee had said “NOT APPLICABLE” whereas here the Revenue had independent knowledge, from having adjusted the successor’s refund against the predecessors’ demands before the assessments were framed, from one assessment order itself reciting the merger, and from correspondence. Assessments for assessment years 1993-94 to 1995-96 in the predecessors’ names were quashed, with liberty to the Revenue to initiate fresh proceedings against the amalgamated company in accordance with law.

That decision must be cited with a health warning: the Revenue’s appeal against it is understood to be pending before the Supreme Court, on which notice is reported to have been issued in January 2026. Anyone relying on it should check its current status first.

What did section 170(2A) change, and what did it not?

Section 170(2A) was inserted by the Finance Act 2022 with effect from 1 April 2022:

Notwithstanding anything contained in sub-sections (1) and (2), where there is succession, the assessment or reassessment or any other proceedings, made or initiated on the predecessor during the course of pendency of such succession, shall be deemed to have been made or initiated on the successor and all the provisions of this Act shall, so far as may be, apply accordingly.

The Explanation defines “pendency” as the period beginning on the date of filing of the application for succession before the High Court or tribunal, or the date of admission of an insolvency application by the Adjudicating Authority, and ending with the date on which the order is received by the Principal Commissioner or the Commissioner.

Two accuracy points first, because commentary regularly quotes the Finance Bill instead of the Act. The enacted provision says “succession”, not “business reorganisation”, so it is wider than section 170A, which is confined to amalgamation, demerger and merger. And it says “made or initiated”, so both the notice and the order on the predecessor are covered, where the Bill said only “made”.

What it changed is the mid-stream case, and that is a real change. An application is filed before the NCLT. The Assessing Officer, knowing nothing or knowing only that an application is pending, proceeds against the predecessor. The order issues later with an appointed date reaching back over the year. Before 2022 the Revenue lost that case. From 1 April 2022 the assessment stands and the successor is treated as the assessed person.

What it did not change is a proceeding initiated after pendency ends. The deeming operates on proceedings made or initiated during pendency, so a notice issued after the order has reached the Principal Commissioner or the Commissioner is outside the provision. A proceeding initiated during pendency is not: the assessment may be completed afterwards and the deeming still bites, which is precisely the mid-stream case the provision was written for. The distinction is between initiation and completion, and it is easy to state the point too widely.

Whether Maruti Suzuki would now be decided the same way on its own facts cannot be answered from the reported record, and it should not be pitched higher than that. The scheme was approved on 29 January 2013 and the jurisdictional notice issued on 26 September 2013. What the judgment records, at paragraph 8, is an intimation to the Assessing Officer on 2 April 2013. The Explanation keys the end of pendency to receipt of the order by the Principal Commissioner or the Commissioner, a date the judgment does not give. Those are different officers and different events. That is exactly why establishing the date of receipt is the first thing to do in any case where the provision is raised.

Three further limits deserve to be stated. The non-obstante clause overrides only sub-sections (1) and (2) of section 170; it does not purport to override section 292B or to displace the general law. The Explanation’s definition of the triggering event is keyed to an application before a court, tribunal or the Adjudicating Authority, so a strike-off under section 248 of the Companies Act 2013, a dissolved firm, a company dissolved on liquidation and the death of an individual are all untouched. And the provision was inserted with effect from 1 April 2022 with no words giving it retrospective operation, so it does not reach earlier years.

Finally, and this is the point most often assumed away: a modified return under section 170A is not a cure for this defect. ITAT Kolkata quashed assessments as void ab initio in Happy Suppliers Pvt Ltd v. ACIT (ITA Nos. 2577 and 2578/Kol/ 2025, order of 12 February 2026) even though the amalgamation had been brought to the Department’s notice by filing Form ITR-A. The two provisions do different work, and the modified return under section 170A is dealt with separately.

Has any court applied section 170(2A) to save an assessment?

No reported High Court decision has, and that is worth saying plainly because the provision is now four and a half years old.

The Gujarat High Court considered it in Kunvarji Fincorp, noted the insertion with effect from 1 April 2022, held “this is not applicable in case of the present petitioner”, and added the observation that the provision “does not specify the manner of intimation”. That last remark is useful in both directions: it is an invitation to a successor to intimate in a way that cannot be denied, and a warning that a Department relying on not having been told cannot point to a prescribed form it never received.

ITAT Bangalore held it inapplicable in SKF Engineering and Lubrication India Pvt Ltd v. DCIT (IT(TP)A No. 805/Bang/2022, 12 June 2023) because the succession application had been filed on 14 November 2018, before the commencement, and quashed the assessment on Maruti Suzuki.

One Tribunal order reads the provision for the Revenue. M/s Action Tie-Up Pvt Ltd v. DCIT (ITA Nos. 1416, 1200, 1731 and 1732/KOL/2025, ITAT Kolkata, 20 May 2026) reasons that section 170(2A) expands successor liability rather than restricting the Revenue’s power under section 170(1). It does not cite Maruti Suzuki, Mahagun or section 292B, and appears to misdescribe the amending Act as the Finance Act 2021, so its weight as authority is low. Note also that the assessee’s appeals were allowed and the Revenue’s dismissed, so the passage is reasoning on the way to a result against the Revenue. It should be known about rather than relied on.

Where does each High Court stand?

Do not tell a client the High Courts are unanimous, because they are not. The honest position has two halves.

On the core proposition, that an assessment framed on an entity the Assessing Officer knew had ceased to exist is a jurisdictional nullity not curable under section 292B, the High Courts are, with the single exception of Sky Light on its own record, uniform, and the Supreme Court is behind them. Sky Light is the reminder that even knowledge is not decisive if the Department’s contemporaneous record shows the successor was the intended addressee.

On the converse, what happens where the assessee never told the officer, the position is genuinely open, Mahagun governs, and several forums have gone against the assessee.

Delhi is the most developed. Spice is its own decision, affirmed by the Supreme Court, and the batch judgment of 26 September 2024, Vedanta (2025) and Boeing India (2026) are Division Bench judgments against the Revenue, rejecting both section 292B and section 154. But Delhi also produced Sky Light (2018), Ravinder Kumar Aggarwal (2022, on a restored strike-off) and the reasoning in Sonansh Creations (2025) on which notice carries the defect. The dividing line in Delhi is disclosure and which notice was defective.

Bombay is with Maruti Suzuki. Reliance Industries (2025) is the flagship, subject to the appeal reported to be pending. J M Mhatre Infra Pvt Ltd v. Union of India (Writ Petition (L) No. 16514 of 2023, decided 16 December 2025, B.P. Colabawalla and Amit S. Jamsandekar, JJ., with a companion matter the same day in Writ Petition No. 11915 of 2024) extends it to a partnership firm that had merged into a company, and holds that section 189 “would have absolutely no application in a case like the present one”.

Gujarat, which matters most for an Ahmedabad practice, is with Maruti Suzuki and is the only High Court to have engaged with section 170(2A). Kunvarji Fincorp (16 January 2023) is its leading post-Mahagun statement; Anokhi Realty Private Limited v. ITO (SCA No. 17613 of 2021, decided 7 August 2023, Biren Vaishnav and Devan M. Desai, JJ.) quashed section 148 notices for four years issued to an amalgamated-away predecessor despite intimation; and Inox Wind Energy (31 January 2023) did the same in a section 143(3) assessment.

Madras is the most Revenue-friendly of the majors on the non-disclosure case, because of Oasys Green Tech.

Calcutta is adverse on the duty to inform, because of Shaw Wallace Distilleries. No verified post-2022 Calcutta High Court decision on the point was traced, and its Tribunal decisions pull in opposite directions.

Karnataka is with Maruti Suzuki: CIT v. Intel Technology India (P) Ltd [2016] 380 ITR 272 (Kar) is among the authorities cited to the Supreme Court in Maruti Suzuki for the proposition that a statutory notice issued in the name of a non-existent entity makes the whole assessment a nullity, and ITAT Bangalore is consistently pro-assessee.

Allahabad has no income tax authority on the point that was traced, but it has applied the principle. In Max Estates Limited v. Union of India (Writ Tax No. 701 of 2025, decided 5 March 2025, Arun Bhansali, CJ and Kshitij Shailendra, J.) the Court followed Maruti Suzuki and quashed orders passed in the name of a company that had merged into the petitioner, holding that the issuance of notice to a non-existent entity was fundamentally at odds with the principle that the amalgamating entity ceases to exist upon the approved scheme. The proceedings there were under the GST Act rather than the Income-tax Act.

What happens when the company has been struck off?

A different analysis applies, and the Revenue has an answer it often does not use.

In Ravinder Kumar Aggarwal v. ITO (W.P.(C) 7122/2019, Delhi High Court, decided 17 November 2022, Manmohan and Manmeet Pritam Singh Arora, JJ.) a company had been struck off by the Registrar on 30 June 2017 under section 248 of the Companies Act 2013. A section 148 notice issued on 28 March 2019 for assessment year 2012-13. The Department then obtained an NCLT restoration order dated 25 September 2019.

The Court upheld the notice. Under section 252(3) of the Companies Act, on restoration the company is placed in the same position as if the name had not been struck off, so upon restoration the company is deemed not to have been struck off from the register. The Court also relied on section 250, under which a struck-off company continues to exist for the purpose of realising amounts due to it and discharging its liabilities, and on section 248(7), under which the liability of directors and members continues and may be enforced as if the company had not been dissolved. The petition was dismissed with costs of Rs 50,000, partly for want of locus.

So in a strike-off matter the first question is not Maruti Suzuki but whether the Revenue has moved the Tribunal under section 252. If it has, the fiction in section 252(3) repairs the existence problem retrospectively. If it has not, the ordinary principle applies. Section 170(2A) is no help to the Department here, because a strike-off is not an amalgamation, demerger or merger.

What about a dissolved firm, or a firm that merged into a company?

Section 189 of the Income-tax Act provides its own machinery where a firm’s business is discontinued or the firm is dissolved: the assessment is to be made as if no such discontinuance or dissolution had taken place; every person who was a partner at dissolution, and the legal representative of a deceased partner, is jointly and severally liable; and where dissolution occurs after proceedings have commenced, the proceedings may be continued against those persons from the stage at which they stood.

The Bombay High Court held in J M Mhatre Infra that section 189 does not answer the problem where the firm had merged into a company years before the year in question, because section 189 taxes income earned before dissolution and does not authorise reopening against a firm that has ceased to exist.

The contrary case is M/s Goutam Medicose, Dhar v. ITO (ITA Nos. 709 and 710/Ind/2024, ITAT Indore, 21 February 2025), and it is the cleanest post-Mahagun decision in the Revenue’s favour that has been reported. A partnership firm was dissolved on 31 March 2007 and a partner continued the business as a proprietorship, retaining the old bank account and the firm’s permanent account number. Notices under sections 147 and 148 issued in the firm’s name in respect of unexplained cash deposits of Rs 2,08,81,600. The Tribunal upheld the validity of the proceedings, holding expressly that if the Assessing Officer is not at all aware of non-existence of assessee, the officer’s action is protected, and that the decision applicable was Mahagun Realtors and not those cited for the assessee. Quantum and penalty were remanded to avoid double taxation in the proprietor’s hands.

Two features of that decision travel beyond firms. It applies Mahagun outside amalgamation altogether. And it treats the continued use of the old permanent account number as an operative fact against the assessee.

A company in liquidation is not a dissolved company

These are regularly conflated and they should not be.

Liquidation is a process. Dissolution is the end of legal personality. The Maruti Suzuki line operates only after dissolution. During liquidation the questions are different ones: the moratorium under the Insolvency and Bankruptcy Code, the liquidator’s obligations under section 178 of the Income-tax Act, and who is competent to represent the company. Those are dealt with in what happens to a tax demand when a resolution plan is approved.

There is also an asymmetry worth noticing. Because section 250 of the Companies Act keeps a struck-off company alive for the limited purposes of realising amounts due and discharging liabilities, an appeal by the company is on a different footing from an assessment on it. A shell that survives for the purpose of recovering what it is owed is not thereby a person on whom a fresh assessment may be framed.

Does the surviving PAN matter?

Legally it should not. A permanent account number is an administrative artefact and does not confer or preserve legal personality. Evidentially it is close to decisive, because it is the mechanism by which the Assessing Officer remains ignorant.

In Mahagun the return of 28 May 2010 was filed under the predecessor’s number, and that was part of the conduct on which the case turned. In Goutam Medicose the continued use of the dissolved firm’s number and bank account was treated as supporting the Revenue. In Oasys Green Tech Pvt Ltd v. ITO (W.P. Nos. 21858 and 1759 of 2018, Madras High Court, decided 21 January 2020, Dr Anita Sumanth, J.) the Court upheld a section 148 notice issued to an amalgamated-away company, holding that the assessee “has not only omitted to bring to the notice of the revenue the factum of amalgamation, but, has by its conduct of filing a return of income post amalgamation in the name of OAS furthered the illusion that OAS continues to exist even after amalgamation”, and recording that the Department was wholly unaware of the amalgamation proceedings. In fairness, although the notice survived, the assessment order of 30 December 2017 was set aside as passed ex parte in breach of natural justice, so the case is authority on the notice rather than a clean win.

The Calcutta High Court made the duty explicit in CIT, Central-I v. M/s Shaw Wallace Distilleries Ltd (ITA 32/2008, decided 6 June 2016, Girish Chandra Gupta and Asha Arora, JJ.): “The assessee maintained a studied silence and did not bring to the notice of the revenue, in particular the assessing officer, about the amalgamation sanctioned by the High Court at Mumbai on March 26, 2003.” The Revenue’s appeal was allowed.

The advisory conclusion is unglamorous and cheap. Surrender or cancel the amalgamating company’s permanent account number, and do it on the record, with an acknowledgement. It costs an afternoon and it removes the single strongest fact the Department has in a Mahagun argument.

Is participation a waiver?

Not where the successor participates as the successor. Spice held that mere participation would be of no effect as there is no estoppel against law, and Maruti Suzuki held at paragraph 33 that participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law.

Mahagun qualified it, and the qualification is precise. The distinction is between a successor appearing as successor, where there is no estoppel, and an assessee holding itself out as the predecessor while concealing the amalgamation, where the conduct defeats the plea. At paragraph 35 the Court recorded that the participation in proceedings was by the predecessor, which held itself out as the predecessor, and it treated the form in which the appeals before the CIT(A) and the Tribunal had been filed as part of the same pattern.

What follows for practice is that every appearance after the scheme should be in the successor’s name, describing itself as successor, and every appeal memorandum should say so on its face. The cost of getting this wrong is not the loss of a technical point; it is that the technical point is no longer available.

Section 292BB, which deals with waiver of the objection that a notice was not served, is sometimes raised in this context and cannot assist the Revenue, for the obvious reason that the objection is not that the notice was not served but that it was addressed to a person who did not exist. Neither Maruti Suzuki nor Mahagun Realtors had occasion to decide the point; both discuss only section 292B.

Which notice has to carry the defect?

Under the post-2021 reassessment machinery this has become the most practically important question in the field, and the answer favours the Revenue at the enquiry stage.

In Sonansh Creations Pvt Ltd v. ACIT (W.P.(C) 12316/2022, Delhi High Court, decided 10 January 2025, Vibhu Bakhru, ACJ and Swarana Kanta Sharma, J.) the show cause notice under section 148A(b) had been issued in the name of a company that had merged into the petitioner. The Court rejected the Maruti Suzuki objection, reasoning that proceedings under section 148A are to enable the Assessing Officer to form an opinion whether it is a fit case for issuance of notice under section 148, and that the notice to commence reassessment proceedings, the notice under section 148, was issued in the name of the petitioner and not in the name of the merged entity.

The case must be cited carefully, because the petition was allowed. The Court went on to quash the notices and the section 148A(d) order on the separate substantive ground that the Assessing Officer had no credible material. So it is authority that a defect confined to the section 148A(b) stage was not fatal on those facts. It is not authority that a reassessment was upheld, and anyone who pulls the judgment will see that the assessee won.

The analytical point stands on its own. Maruti Suzuki is a decision about the jurisdictional notice. Under the current regime that is the section 148 notice. A misdescription in a section 148 or section 143(2) notice is therefore the weakest candidate in this entire field for cure under section 292B; a misdescription confined to the section 148A(b) enquiry notice is the strongest. The reassessment machinery itself is set out on the provision page for section 148A.

Does the same rule apply to section 153C and search assessments?

It does, and the search context is where the Revenue is strongest.

Mahagun is itself a search case. The search under section 132 took place on 27 August 2008 and the assessment was framed under section 153A read with section 143(3). The Supreme Court found it overwhelmingly evident that the amalgamation was known to the assessee even at the stage when the search and seizure operations took place. So in any search or requisition matter the Department will lead with Mahagun, and a submission that does not meet it head on will not be read twice.

On the assessee’s side, the Delhi High Court in CIT v. Indu Surveyors and Loss Assessors Pvt Ltd (15 October 2015, S. Muralidhar and Vibhu Bakhru, JJ.) dealt with a company that had merged with effect from 1 April 2008, a search on 20 October 2008 and a section 153C notice on 10 September 2010, and held the proceedings null and void ab initio. The decision is often quoted for a wider proposition, that the search itself is a nullity. That wording comes from the reporter’s headnote rather than the Court’s own language, and it is over-broad: a search is an action against premises and persons rather than an assessment on an entity. Cite the case for the notice and the assessment, and attribute the wider formulation to the reporter. Note also that the judgment does not appear on the free databases, so the particulars above rest on the reports rather than on the Court’s own text, and should be checked before the case is used in a submission.

Micra India (P) Ltd and Micron Steels P. Ltd, both Delhi decisions following Spice, are commonly cited in the same context.

The interaction with the block period and the satisfaction note is a separate subject, dealt with on the provision page for section 153C and in the section 153C satisfaction note and block period.

Can the point be taken for the first time before the Tribunal?

As a matter of principle, yes. It is a pure question of law arising on the facts on record, which National Thermal Power Co Ltd v. CIT (1998) 229 ITR 383 permits to be raised before the Tribunal for the first time, and a jurisdictional defect is not cured by acquiescence.

In practice the route most used is a cross objection to the Revenue’s appeal. That is how the plea succeeded in Viacom18 Media (cross objection 07/MUM/2025), Barclays Global Service Centre (cross objection 8/PUN/2021) and Prestige Holiday Resorts (cross objections 204 and 205/Mum/2025). The practical significance is considerable: an assessee who did not appeal can still raise the nullity when the Revenue does.

Mahagun cuts the other way on conduct, not on admissibility. It does not hold that the plea cannot be taken late; it holds that where the assessee held itself out as the predecessor through every forum the plea fails on the merits. Those are different objections and the distinction should be drawn expressly, because the Departmental Representative will run them together.

One caution. No decision was traced squarely holding that the plea may be taken for the first time in second appeal where it was never taken before the CIT(A) at all. That step should be grounded on National Thermal Power and on the nature of the defect, not on a specific authority.

What is the position under the Income-tax Act, 2025?

Section 313 is the successor to section 170, under the marginal note “Succession to business or profession otherwise than on death”. Sub-section (3) reproduces section 170(2A) almost exactly:

Irrespective of anything contained in sub-sections (1) and (2), where there is succession, the assessment or reassessment or any other proceedings, made or initiated on the predecessor during the course of pendency of such succession, shall be deemed to have been made or initiated on the successor and all the provisions of this Act shall, so far as may be, apply accordingly.

Note the drafting convention: the 2025 Act says “irrespective of anything contained in” where the 1961 Act said “notwithstanding anything contained in”. Secondary sources routinely misquote the new Act’s non-obstante clauses, and a quotation that begins “Notwithstanding” is a misquotation.

The definition of “pendency” moves from the Explanation into section 313(6)(b) and is otherwise unchanged, save for one word: receipt must now be by the jurisdictional Principal Commissioner or the Commissioner. That word is litigable. Receipt by a Principal Commissioner who is not the jurisdictional one would not, on the new text, stop the clock.

Section 522 replaces section 292B. Sub-section (1) reproduces it. Two further protections were added, and the attribution matters: they were inserted not by the 2025 Act as passed but by the Finance Act 2026 (Act No. 4 of 2026), which substituted section 522 with effect from 1 April 2026.

Sub-section (2) provides that no assessment shall be invalid on the ground of any mistake, defect or omission in respect of quoting of a computer generated Document Identification Number, if the assessment order is referenced by such number in any manner. Sub-section (3) deems an approval given by an income-tax authority in relation to assessment, reassessment or recomputation proceedings to be administrative and supervisory in nature, and provides that it shall not be invalid by reason of any insufficiency of the reasons recorded or by reason of any defect in the form or manner of its authentication or communication.

The same Finance Act put both protections into the 1961 Act as well, and made both retrospective, which matters far more in practice because the 1961 Act will govern this field for years. Section 292BA, inserted with effect from 1 October 2019, reads:

Notwithstanding anything contained in any judgment, order or decree of any court, for the removal of doubts, it is hereby clarified for the purposes of section 292B that no assessment under any of the provisions of this Act shall be invalid or shall be deemed to have been invalid on the ground of any mistake, defect or omission in respect of quoting of a computer generated Document Identification Number, if the assessment order is referenced by such number in any manner.

The date is not accidental: 1 October 2019 is when the Board’s earlier circular on Document Identification Numbers took effect. Section 292BC, inserted by the same Act with effect from 1 April 2021, is the approvals counterpart:

Notwithstanding anything contained in this Act or in any judgment, order or decree of any Court, for the removal of doubts, it is hereby clarified that any approval given by an income-tax authority in relation to any assessment, reassessment or re-computation proceedings under this Act shall be deemed to be administrative and supervisory in nature and shall not be invalid or shall not be deemed to be invalid by reason of any insufficiency of the reasons recorded or by reason of any defect in the form or manner of its authentication or communication including whether digital signature have been appended to such approval or not, where such approval is granted electronically.

CBDT Circular No. 4/2026 dated 31 March 2026 deals with referencing by Document Identification Number and replaces the 2019 circular. Both amendments are significant developments for anyone running DIN-based or approval-based grounds of appeal, and they deserve separate treatment.

For present purposes the point is a narrower one. Neither the DIN protection nor the approvals protection has anything to do with a defect of existence, and nothing in either extends the curative principle to one. The answer remains the answer in Maruti Suzuki at paragraph 31: a curative provision operates on defects of form, and existence is not a defect of form. But the direction of legislative travel is towards enlarging curative provisions, and that context will be used.

One transitional point, and it matters more here than almost anywhere. By section 536(2)(c) of the 2025 Act, the repealed Act continues to apply to any proceeding pending on 1 April 2026 and to any proceeding initiated on or after that date in respect of any tax year beginning before it, to be carried out under the procedure of the repealed Act. By section 536(2)(v), where a search under section 132 or a requisition under section 132A was initiated before 1 April 2026, the repealed Act continues to apply to all connected proceedings. So sections 170, 170A and 292B will govern this subject for years to come, and for search matters indefinitely. Which statute applies to a given proceeding is dealt with in which Act governs an appeal filed today.

What does a successor actually have to do?

Six things, and five of them cost almost nothing.

Intimate, in writing, per assessment year, to each officer. Mahagun was lost on an intimation that related to the wrong year. Write for every year that is open or may be opened, to the Assessing Officer of the predecessor and of the successor and, where transfer pricing is in play, to the Transfer Pricing Officer. Vedanta turned on an intimation to the Transfer Pricing Officer being ignored; the intimation existed because somebody had sent it. Since Kunvarji Fincorp records that the provision does not specify the manner of intimation, choose a manner that leaves an acknowledgement.

Surrender the predecessor’s permanent account number and record it. This is the single highest-value step available, because the surviving number is what keeps the Department ignorant and ignorance is what makes Mahagun available.

Answer in the successor’s name, always. Every letter, every response on the portal, every appeal memorandum. Mahagun held that the appeals filed in a form naming the predecessor were part of the pattern that defeated the plea.

Never write “not applicable” against business reorganisation. It is a small box on a form and it decided a Supreme Court appeal.

Fix the pendency dates. Establish when the application was filed, when the order was issued, and when it reached the Principal Commissioner or Commissioner. That last date is the boundary of section 170(2A), and it is the fact on which any argument about the provision will turn. Ask for it under the Right to Information Act if the Department will not confirm it.

Take the point early, and take it as jurisdiction. Raise it before the Assessing Officer, repeat it before the CIT(A), and if the Revenue appeals, put it in a cross objection. It is available late, but a point taken from the outset is harder to answer with conduct.

And where the assessment is quashed, expect the Revenue to begin again against the successor. Spice said it must be allowed to, and Reliance Industries expressly reserved liberty to do so. The value of the point is usually limitation, not immunity.

Related reading on this site: the provision page for assessment on a non-existent entity; the modified return under section 170A; tax demands after an insolvency resolution plan; and, on the reorganisations that fall outside these provisions, conversion of a firm, company or LLP.

This note is general commentary on the law as at 27 September 2026 and is not advice on any matter. The position in a particular case depends on its own facts.