ITAT Delhi Invalidates Reassessment Proceedings Against Non-Existent Amalgamated Company — Surya Medi Tech Ltd. vs DCIT/ACIT

Background and Overview

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, recently delivered a significant ruling in the case of Surya Medi Tech Ltd. Vs DCIT/ACIT, disposing of two appeals filed by the assessee against a common order dated 07.11.2025 passed by the Commissioner of Income Tax (Appeals)-3, Noida, covering Assessment Years 2013–14 and 2014–15. The underlying assessment orders, both dated 26.05.2023, had been framed under Section 143(3) read with Section 147 of the Income-tax Act, 1961.

Given that both appeals rested on substantially identical grounds and arose from a common factual matrix, the Tribunal took them up together and resolved them through a single consolidated order. The central controversy in both appeals was whether reassessment proceedings initiated in the name of a company that had already ceased to exist following amalgamation could be sustained in law.

Facts of the Case

The Amalgamation and Its Formal Registration

Pursuant to an order passed by the National Company Law Tribunal (NCLT), Allahabad Bench, dated 21.03.2018, Surya Medi Tech Ltd. was merged with its holding company, M/s Ace Infracity Developers Pvt. Ltd. As a direct consequence of this court-sanctioned amalgamation, the erstwhile entity — Surya Medi Tech Ltd. — ceased to have any independent legal existence from the date of the NCLT order.

The amalgamation order was duly filed before the Registrar of Companies, Kanpur, and was formally recorded on 19.04.2018. Additionally, the assessee's authorized representative had communicated the fact of amalgamation to the Assessing Officer through a letter dated 23.04.2018, which was submitted on 08.05.2018. Importantly, the Ministry of Corporate Affairs (MCA) portal had updated the company's master data to reflect its status as "Amalgamated" well before the department took any reassessment action.

The Reassessment Notices and the Defect

Despite the above factual position being clearly available in official records, the Assessing Officer proceeded to issue notices under Section 148 of the Income-tax Act, 1961, on 27.07.2022 — more than four years after the amalgamation — in the name of the erstwhile entity, Surya Medi Tech Ltd., which had by then long ceased to exist in law.

The assessee challenged this action before the ITAT, contending that issuing a jurisdictional notice under Section 148 in the name of a dissolved and non-existent entity was fundamentally flawed and that the reassessment orders flowing from such notices were void and liable to be quashed.

Contentions of the Parties

Assessee's Submissions

The assessee's authorized representative argued on the following lines:

  • The company had been lawfully amalgamated with M/s Ace Infracity Developers Pvt. Ltd. under a valid NCLT order dated 21.03.2018, and had ceased to exist as a separate legal entity thereafter.
  • The Assessing Officer had been formally notified of this amalgamation through a written communication filed on 08.05.2018.
  • The MCA portal — a publicly accessible official database — clearly displayed the assessee's status as "Amalgamated" at all material times.
  • Issuing notices under Section 148 in the name of a non-existent entity amounts to a substantive jurisdictional illegality, not a mere procedural lapse, and renders the entire reassessment void.
  • Reliance was placed on the Supreme Court's landmark decision in PCIT vs. Maruti Suzuki India Ltd. reported in [2019] 107 com 375 (SC) and other judicial precedents.

Revenue's Submissions

The Senior Departmental Representative appearing for the Revenue supported the assessment orders and submitted that:

  • The assessee had failed to appear before the Assessing Officer during reassessment proceedings.
  • The assessee had similarly not participated before the Commissioner of Income Tax (Appeals).
  • On account of this non-participation, the Revenue urged that the matter be remanded either to the Assessing Officer or to the CIT(A) for fresh consideration on merits.