HC’s Clarification Wasn’t a Finding or Direction to Trigger Section 153(6) | HC

Case Details: Shell India Markets (P.) Ltd. vs. Deputy Commissioner of Income-tax, Circle-3(4), Mumbai [2025] 180 taxmann.com 671 (Bombay)

Judiciary and Counsel Details

• B. P. Colabawalla & Amit S. Jamsandekar, JJ.
• J. D. Mistri, Sr. Adv., Vishal Kalra, Snigdha Gautam, Sheeja John & Anoushka John, Advs. for the Petitioner.
• Arjun Gupta, Adv. for the Respondent.

Facts of the Case

The erstwhile assessee (Shell Technology India Private Limited) filed its return for the relevant assessment year 2007-08. With effect from 01-04-2008, the assessee merged with the petitioner, i.e. Shell India Markets Private Limited, pursuant to a Scheme of Amalgamation approved by the Hon’ble High Courts of Karnataka and Madras.

The Petitioner also furnished copies of the orders passed by the Hon’ble High Courts. However, the then Assessing Officer (AO) proceeded with the assessment proceedings and issued, inter alia, a notice under Section 143(2) on 19-11-2010 in the name of ‘STIPL’, which did not exist as of that date. Subsequently, a final Assessment Order was passed in the name of the erstwhile entity, i.e. STIPL.

On appeal, the Tribunal held that the assessment order, having been passed in the name of a non-existent entity, i.e. STIPL, was a nullity in the eyes of the law and liable to be quashed. The High Court also upheld the Tribunal’s order setting aside the assessment order.

The High Court’s order further clarified that the Department’s appeal against the Tribunal’s order was being dismissed solely on the ground that the notice and the Assessment Order had been passed in the name of the transferor company (STIPL). The Court further observed that the consequence of this submission was that the Assessment Order and Notice ought to have been issued in the name of the transferee company and not the transferor.

The Court clarified that its order would not preclude the Department from initiating fresh proceedings against the transferee company, in accordance with the law. Thereafter, Assessing Officer issued a notice under section 143(2) to the petitioner-company, claiming that the income was proposed to be assessed in the petitioner’s hands in ”compliance” with the order of the High Court.

The matter reached the Bombay High Court again.

ITAT Held

The High Court held that the High Court order merely clarified that the revenue authorities were not precluded from initiating fresh proceedings against the transferee company (Petitioner) in accordance with the law. The emphasised words clearly rule out any question of a “direction” being issued by the Court. The Assessing Officer also accept this. As to whether the said order contained any “finding” within the meaning of the word, it was viewed that, in the first place, there is no finding at all.

The Court has merely recorded what it felt was the consequence and effect of the submission made by the Petitioner, which the Court had accepted. Clearly, an impact or consequence can only arise after the Court has accepted the submission. Ex facie, this can never be a finding necessary to decide the appeal before the Court. To put it differently, to determine the appeal before it, the Court merely applied the principle laid down in Maruti Suzuki’s case [2019] 107 taxmann.com 375 (SC). It held that no assessment could be made of a non-existent company. No consideration of the assessment in the hands of the Petitioner was necessary to decide and finally dispose of the appeal.

Therefore, even assuming that a finding exists, it is clearly not a “finding” necessary to dispose of the appeal before the Court. Accordingly, there is no question of the provisions of Section 153(6) being attracted in the facts of the present case. For all the reasons set out above, it is viewed that the order of the High Court does not contain any “finding” or “direction” as contemplated by the provisions of Section 153(6).

List of Cases Reviewed

• Rajinder Nath v. CIT [1979] 2 Taxman 204/120 ITR 14 (SC)
• ITO v. Murlidhar Bhagwan Das [1964] 52 ITR 335 (SC) (para 24) followed

List of Cases Referred to

• Reliance Industries Ltd. v. P. L. Roongta [2025] 171 taxmann.com 467/479 ITR 770 (Bombay) (para 12)
• Pr. CIT v. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375/265 Taxman 515/416 ITR 613 (SC) (para 12)
• Rajinder Nath v. CIT [1979] 2 Taxman 204/120 ITR 14 (SC) (para 13)
• ITO v. Murlidhar Bhagwan Das [1964] 52 ITR 335 (SC) (para 13)
• Wavy Construction LLP v. Asstt. CIT [2025] 170 taxmann.com 174/473 ITR 1 (Bombay) (para 13).