The High Court of Delhi has dismissed an appeal filed by the Principal Commissioner of Income Tax against Boeing India Pvt. Ltd., affirming that an assessment order passed in the name of a non-existent amalgamating entity is a substantive illegality that cannot be cured under Section 292B of the Income Tax Act, 1961.
A Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar held that the Revenue’s failure to issue the final assessment order in the name of the amalgamated entity, despite having prior information of the merger, rendered the proceedings void. The Court rejected the Revenue’s argument that the error was a mere procedural irregularity caused by a technical glitch in the Income Tax Business Application (ITBA) portal.
Background of the Case
The matter pertains to Assessment Year (AY) 2016-17. On November 29, 2016, Boeing International Corporation India Pvt. Ltd. (BICIPL) filed its return of income. On February 27, 2018, BICIPL merged with Boeing India Pvt. Ltd. (BIPL) through a scheme of merger.
On April 10, 2018, the assessee informed the Assessing Officer (AO) about the amalgamation. Despite this, while the Transfer Pricing Officer (TPO) and the Dispute Resolution Panel (DRP) issued orders/directions in the name of the correct amalgamated entity (BIPL), the AO issued the final assessment order on March 30, 2021, in the name and PAN of the erstwhile entity, BICIPL.
The Income Tax Appellate Tribunal (ITAT) subsequently quashed the assessment order as void ab initio, prompting the Revenue to appeal to the High Court.
Arguments of the Parties
Appellant (Revenue): Mr. Debesh Panda, Senior Standing Counsel for the Revenue, argued that the jurisdictional notice under Section 143(2) was issued in the correct name before the merger. He contended that the final assessment order bore the old name due to a “glitch on the ITBA system/portal.” He argued that once proceedings are initiated in a name, the system automatically carries it forward. The Revenue sought protection under Section 292B, characterizing the mistake as a “mere procedural irregularity” and citing PCIT v. Mahagun Realtors (P) Ltd. to argue that such orders are not automatically void.
Respondent (Boeing India Pvt. Ltd.): Mr. Sachit Jolly, Senior Advocate for Boeing, argued that the issue was settled by the Supreme Court in PCIT v. Maruti Suzuki and the High Court in CIT v. Sony Mobile Communications India Pvt. Ltd. He stated that since the AO was duly informed of the merger years before the final order, the failure to substitute the successor was a fatal jurisdictional defect. He further argued that the “system glitch” plea was belied by the fact that in the preceding year (AY 2015-16), the Revenue had successfully passed the final order in the name of the amalgamated entity.
Court’s Analysis and Observations
The Court observed that the fact of the merger was “very much in the knowledge of the Assessing Officer much prior to framing of the draft assessment order.” The Bench noted that the final assessment order did not even mention that BICIPL was the predecessor of BIPL.
Regarding the “technical glitch” argument, the Court stated:
“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 Bench placed heavy reliance on the Supreme Court’s decision in Maruti Suzuki (2020), which held that issuing an assessment order against an amalgamating company is a “substantive illegality and not a procedural violation.”
Distinguishing the Mahagun Realtors case cited by the Revenue, the Court noted:
“Unlike the facts in Mahagun Realtors (supra), the respondent/assessee in the present case had informed the Revenue about the amalgamation… much before the final assessment order.”
The Court further referenced Spice Entertainment (2012), noting that an assessment against an amalgamating entity is akin to an assessment against a “dead person.”
Decision
The High Court concluded that the issue is well-settled and that consistency is vital in tax matters. Dismissing the appeal, the Court observed:
“Regarding the issue of glitches in the ITBA portal, the Revenue ought to take this opportunity to improve the system so that such technical problems do not hinder/vitiate the assessment process.”
Finding no substantial question of law, the Court declined to interfere with the ITAT’s order quashing the assessment.
Case Details
Case Title: Principal Commissioner of Income Tax-1 v. Boeing India Pvt. Ltd.
Case Number: ITA 586/2025
Bench: Justice V. Kameswar Rao and Justice Vinod Kumar
Date: March 16, 2026
