ITAT Quashes Tax Assessment Against Non-Existent Entity, Cites Invalid Jurisdiction [Read Order]
The Revenue contended that the assessee’s participation in proceedings barred jurisdictional objections under Section 124(3)
![ITAT Quashes Tax Assessment Against Non-Existent Entity, Cites Invalid Jurisdiction [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/ITAT-Cites-Invalid-Jurisdiction-ITAT-Quashes-Tax-Assessment-taxscan.jpg "ITAT Quashes Tax Assessment Against Non-Existent Entity, Cites Invalid Jurisdiction [Read Order]")
The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad, has nullified a tax assessment order framed against Man Diesel and Turbo India Pvt. Ltd. (formerly Man Turbo India Pvt. Ltd.), ruling that the assessment was invalid as it targeted a non-existent entity due to a corporate amalgamation. The bench quashed the proceedings, citing the Supreme Court’s precedent in PCIT vs. Maruti Suzuki...
The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad, has nullified a tax assessment order framed against Man Diesel and Turbo India Pvt. Ltd. (formerly Man Turbo India Pvt. Ltd.), ruling that the assessment was invalid as it targeted a non-existent entity due to a corporate amalgamation. The bench quashed the proceedings, citing the Supreme Court’s precedent in PCIT vs. Maruti Suzuki India Ltd. (2019).
Man Diesel and Turbo India Pvt. Ltd., the successor entity of Man Turbo India Pvt. Ltd. (MTIPL), challenged the assessment order for AY 2013–14, arguing that the Assessing Officer (AO) had issued notices and framed the assessment in the name of MTIPL despite being informed of its amalgamation effective January 1, 2013. The company had formally notified the AO of the merger on June 24, 2014, yet the AO proceeded with scrutiny in MTIPL’s name, culminating in an order dated November 9, 2016.
How Does the Supreme Court Shape Tax Laws? Discover Landmark Rulings! - Click Here
The ITAT bench, comprising Suchitra Kamble (Judicial Member) and Annapurna Gupta (Accountant Member), held that the assessment was void ab initio, as it was framed on a legally defunct entity. The tribunal rejected the Revenue’s argument that the error was merely technical under Section 292B, emphasizing that the AO’s awareness of the amalgamation rendered the proceedings invalid. The bench relied on the Supreme Court’s PCIT V. Maruti Suzuki ruling, where assessments on non-existent entities were struck down, and distinguished the contrary Mahagun Realtors judgment, noting that the taxpayer in this case had duly informed the department.
The Revenue contended that the assessee’s participation in proceedings barred jurisdictional objections under Section 124(3), but the ITAT dismissed this, clarifying that the issue pertained to the assessment’s fundamental validity, not jurisdictional competence. With the assessment quashed, the tribunal declined to address the merits of disallowances totaling Rs.2.86 crore (provisions, material costs, and PF contributions).
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
