Department’s Portal Glitch Can’t Revive a Dead Assessment: Delhi High Court Says Order Against Amalgamating Company Is Void

“An assessee cannot be held accountable for the glitches or rather the functioning or malfunctioning of the ITBA portal”, In a significant ruling for tax litigation arising out of corporate restructurings, the Delhi High Court has held that a final assessment order passed in the name of an amalgamating company, after the Revenue had already been informed of the amalgamation, is void ab initio and cannot be rescued by invoking Section 292B of the Income Tax Act, 1961.

Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar dismissed the Revenue’s appeal and upheld the ITAT’s order quashing the final assessment dated March 30, 2021. The core issue before the Court was whether an assessment framed in the name and PAN of a non-existent amalgamating entity could survive merely because the Department claimed that the defect arose from a technical limitation in its ITBA portal. The Court answered that question firmly against the Revenue.

The judgment reiterates a now-settled proposition in tax law: once an amalgamating company ceases to exist in law, the Assessing Officer cannot continue to frame an assessment in its name after being informed of the merger. Such an error is not a minor procedural lapse. It is a substantive illegality going to the root of jurisdiction.

“Section 292B cannot cure a jurisdictional defect arising from framing an assessment against a non-existent entity”

The dispute arose from Assessment Year 2016-17. The return of income had originally been filed on November 29, 2016 by Boeing International Corporation India Pvt. Ltd. At that stage, there was no controversy because the company existed then. A scrutiny notice under Section 143(2) was issued on July 21, 2017, also in the correct name, as the amalgamation had not yet taken place.

The corporate position changed on February 27, 2018, when Boeing International Corporation India Pvt. Ltd. merged with Boeing India Pvt. Ltd. under a scheme of amalgamation with effect from the appointed date of April 1, 2017. After this, the respondent informed the Revenue about the amalgamation, first by letter dated April 10, 2018, and again during the assessment proceedings, including by a reply dated September 25, 2018 to a notice under Section 142(1).

Despite this disclosure, the Revenue’s handling of the proceedings remained inconsistent. The Transfer Pricing Officer passed the order under Section 92CA(3) on October 31, 2019 in the name of the amalgamated entity, Boeing India Pvt. Ltd. The Dispute Resolution Panel’s directions dated October 19, 2020 were also issued in the name of the amalgamated company. Even the order giving effect to the DRP directions on March 25, 2021 was issued in the correct name. Yet, when the final assessment order came to be passed on March 30, 2021, it reverted to the name and PAN of the erstwhile amalgamating entity, Boeing International Corporation India Pvt. Ltd.

That inconsistency proved fatal.

The Revenue argued before the High Court that the ITAT had failed to appreciate the practical difficulty arising from the Department’s electronic system. According to the Revenue, since the return and initial notice were linked to the old PAN on the ITBA portal, the system automatically carried forward the old name into the final assessment order. It was urged that the Assessing Officer had substantially complied with the law because the TPO order, DRP directions, and other proceedings showed that the real target of assessment was Boeing India Pvt. Ltd. On that basis, the Department characterized the defect as a mere procedural irregularity curable under Section 292B.

The Court rejected that submission.

The Bench found that the final assessment order did not merely contain an incidental clerical mistake. It was passed entirely in the name of a company that had ceased to exist. The Court noted that the order did not mention the amalgamation, did not record that the old entity was a predecessor of the amalgamated company, and did not even indicate that the old name was appearing because of any software limitation. In fact, the body of the final assessment order nowhere reflected Boeing India Pvt. Ltd. as the assessee.

That omission, the Court held, was not cosmetic. It went to jurisdiction.

The Bench relied heavily on PCIT v. Maruti Suzuki, Sony Mobile Communications India Pvt. Ltd., Spice Entertainment, and Vedanta Limited, all of which establish that an assessment against a non-existent entity is a nullity. Drawing from those precedents, the Court observed that once the Assessing Officer had been informed of the approved amalgamation, it was incumbent upon the Revenue to proceed in accordance with law against the amalgamated entity alone. The Department could not continue proceedings as if the transferor company still existed.

The Court also reaffirmed the classic analogy from Spice Entertainment that an assessment on an amalgamating company after its dissolution is akin to an assessment against a dead person. Such a defect is not saved by Section 292B because that provision only protects proceedings from invalidation on account of technical mistakes, defects, or omissions when the proceedings are otherwise in substance and effect in conformity with the Act. A jurisdictional defect of this nature is not one of form. It is one of authority.

The Revenue attempted to draw support from Sky Light Hospitality LLP v. CIT and PCIT v. Mahagun Realtors (P) Ltd.. The High Court, however, carefully distinguished both.

In relation to Sky Light Hospitality, the Bench noted that the Supreme Court in Maruti Suzuki had already explained that Sky Light turned on its peculiar facts. There, the misdescription in the reopening notice was treated as a technical error because the record unmistakably showed that the notice was always intended for the successor entity. That was not the position here. In Boeing’s case, the final assessment order itself was drawn wholly in the name of the non-existent entity, with no reference to the successor and no textual indication that the Assessing Officer was consciously assessing the amalgamated company.

As for Mahagun Realtors, the Court emphasized that the Supreme Court had distinguished Maruti Suzuki on specific facts. In Mahagun, the assessee had not clearly disclosed the amalgamation for the relevant assessment year, had filed returns in the old name, had answered “not applicable” in the business reorganisation column, and had throughout participated in proceedings holding out the erstwhile entity as existing. The assessment order there also reflected both the old and new entities. None of those circumstances existed here. Boeing had, on the contrary, informed the Revenue well in advance, and the TPO and DRP had themselves acted on that information by proceeding in the name of the amalgamated entity.

That factual distinction became central to the Court’s conclusion that Mahagun Realtors could not help the Department.

Another important facet of the ruling is the Court’s treatment of the “portal glitch” defence. The Bench was unpersuaded by the plea that the ITBA system’s limitations prevented the Assessing Officer from correcting the name. The Court observed that the return for AY 2016-17 was naturally filed under the old PAN because, at that point, the old company existed. The subsequent merger was approved later, on February 27, 2018. Once the merger was brought to the notice of the Revenue on April 10, 2018, it was for the Department to make the necessary changes in the assessment proceedings. The taxpayer could not be faulted because the Department’s software architecture failed to keep pace with statutory requirements.

In one of the most striking observations in the judgment, the Bench stated that “an assessee cannot be held accountable for the glitches or rather the functioning or malfunctioning of the ITBA portal, which would be the sole responsibility of the appellant/Revenue.” The Court added that the Revenue should treat the case as an opportunity to improve its systems so that technical problems do not hinder or vitiate the assessment process.

The Court also gave considerable weight to consistency in tax adjudication. Quoting Maruti Suzuki, it stressed that certainty and uniformity are values of particular importance in tax litigation. Once the law is settled by the Supreme Court and coordinate benches of the High Court, departing from that settled line would only breed uncertainty. The Bench found no reason to dilute the principles already laid down in Maruti Suzuki, Sony Mobile, Spice Entertainment and Vedanta Limited.

From an advocacy perspective, the ruling is significant for three reasons. First, it strengthens the position that a valid initial jurisdictional notice issued before amalgamation does not save a later final assessment passed against a non-existent entity. The Revenue’s attempt to argue that the original Section 143(2) notice was valid and that later proceedings substantially complied with the law did not persuade the Court. The fatal defect lay in the final assessment itself.

Second, the judgment confirms that Section 292B cannot be used as a post-facto repair tool for orders suffering from foundational illegality. The Department cannot convert a void jurisdictional act into a valid assessment by characterizing it as a clerical or procedural lapse.

Third, the Court has made it clear that administrative or technological deficiencies within the Department cannot prejudice taxpayers. The legal consequences of amalgamation are substantive and cannot be overridden by portal design.

Ultimately, the Delhi High Court held that no substantial question of law arose from the ITAT’s order quashing the final assessment. The appeal was therefore dismissed.

The decision is likely to be cited in future disputes where the Revenue seeks to preserve assessments framed in the names of amalgamating, dissolved, or otherwise non-existent entities by pleading portal constraints, clerical mistakes, or substantial compliance. The judgment sends a clear message: once the Revenue is told that the assessee has undergone amalgamation, it must act on that legal reality. A tax order against a non-existent company is not merely defective. It is void.

Date of Decision: 16/03/2026