The Madras High Court ruled that the assessment order framed in the name of a non-existing person is not to be Void if a mistake is identified, corrected by the Income Tax Department.

The petitioner, Vedanta Limited, formerly known as M/s.Sterlite Industries (India) Limited (SIIL), the said Company filed Return of Income on 29.09.2008, for the Assessment Year 2008-2009. M/s.Sterlite Industries (India) Limited has merged with M/s.Sesa Goa Limited, with effect from 17.08.2013. In terms of the scheme of amalgamation and the arrangement inter-alia between M/s.Sesa Goa Limited and M/s.Sterlite Industries (India) Limited, as sanctioned by the Bombay High Court, Goa Bench and Madras High Court, vide orders. Thereafter, the said Company namely, M/s.Sesa Goa Limited was amalgamated with M/s.Vedanta Limited, the petitioner in the present Writ Petition, with effect from 21.04.2015.

In this backdrop, the Mr.R.V.Easwar Senior Counsel for the petitioner raised a question that whether the notice, issued under Section 148 of the Income Tax Act to a non-existing person, be validated. Admittedly, Section 148 notice was issued to the principal officer M/s.Sesa Sterlite Industries (India) Limited. No such company was in existence during the relevant point of time and at any point of time. Thus, the notice was issued by the respondent to a non-existing person and all further proceedings became invalid and thus, the initiation of reopening proceedings itself is untenable.

The single-judge bench of Justice S.M.Subramaniam observed that in the present case, the proceedings were continued and the assessment order has already been passed and subsequently, the Writ Petitions are filed, challenging the draft assessment order as well as the final assessment order. In view of the fact that the mistake crept in at the initial stage was identified by the department and subsequently corrected and the proceedings thereafter were continued in the name of the petitioner, there is no reason to interfere with the process of reassessment already completed and it is for the petitioner to redress their grievances, if any exist, by preferring an appeal, in the manner prescribed under the Act. In fine, this Court do not find any infirmity or perversity as such, for the purpose of undoing the processes undertaken already, pursuant to the impugned notices issued under Section 148 of the Act.

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