ITAT Mumbai: Assessment Framed Against Amalgamating Entity Post-Merger is Void Ab Initio
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has delivered a significant ruling in the case of ACIT Vs Bank of Baroda (e- Vijaya Bank), reinforcing the legal principle that assessment proceedings conducted in the name of a non-existent entity are invalid. The Tribunal quashed the assessment order passed against the erstwhile Vijaya Bank, which had already merged with the Bank of Baroda, declaring the order null and void in the eyes of the law.
Factual Background of the Case
The dispute arose from the assessment proceedings for the Assessment Year 2019-20. The assessee, a public sector bank, underwent a significant structural change wherein the erstwhile Vijaya Bank and Dena Bank were amalgamated into the Bank of Baroda under the Bank of Baroda Scheme, 2019. This merger became effective from 01.04.2019.
Following the amalgamation, a return of income was filed on 30.09.2019, declaring a total loss of Rs. 1418,82,57,594/- and claiming a refund amounting to Rs. 694,13,11,216/-. The case was subsequently selected for complete scrutiny under the E-assessment scheme, 2019. The scrutiny covered various aspects, including deductions in Schedule BP, high liabilities, currency fluctuation losses, and TDS defaults.
Despite the amalgamation being in effect, the Learned Assessing Officer (AO) issued statutory notices under Section 143(2) and Section 142(1) of the Income Tax Act, 1961 in the name of the erstwhile entity. Ultimately, the assessment order dated 30.09.2021 was passed under Section 143(3) read with Section 144(B) of the Act against Vijaya Bank, determining the total income at Rs. 547,10,19,604/-.