Section 292B

Section 292B — the law in short

What the courts have decided on section 292B, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• PCIT v Mahagun Realtors P Ltd Supreme CourtHelps department
  Is an assessment on an amalgamated company always void?
  No. Corporate death on amalgamation does not by itself invalidate an assessment — it depends on the terms of the amalgamation and the facts, including whether the department was told and how you conducted yourself. Maruti Suzuki was distinguished.
• PCIT v Maruti Suzuki India Ltd Supreme CourtHelps taxpayer
  The notice names a company that has already merged into another. Does taking part in the proceedings fix that?
  No. Once a company amalgamates it ceases to exist, so a notice in its name is a jurisdictional illegality, not a clerical slip. Section 292BB cures defects in service — it cannot supply jurisdiction, and participation is not an estoppel.
• CIT v Spice Enfotainment Ltd Supreme CourtHelps taxpayer
  The company I represent amalgamated years ago, the department knew about it, and the assessment order still came in the old company's name. Is that order void, or can the department call it a curable slip?
  Void. The Delhi High Court held that once a company amalgamates and is dissolved it ceases to exist, and no assessment can be framed against it. Framing an assessment on a non-existent entity goes to the root of the matter: it is a jurisdictional defect, not a procedural irregularity, and section 292B cannot cure it, because that section reaches only technical defects or omissions. Participation by the successor makes no difference. The Supreme Court dismissed the department's appeals on 2 November 2017 without disturbing that reasoning.
• Asha Dubey v Union of India High CourtHelps taxpayer
  They issued a 148 notice in my late husband's name. Can they just issue a fresh one now?
  Not if the s.149 period has run out. Allahabad held that a notice on a dead person is void ab initio and that an order quashing such a notice is not a 'finding or direction' under s.150(1), so it cannot be used to reopen limitation.
• Late Lal Chand Verma (through legal heir) v Union of India High CourtHelps taxpayer
  A notice arrives in the name of someone who has died. Is it valid?
  Not where the proceedings were never begun in their lifetime. Section 159(2)(b) requires the notice to go to the legal representative. Serving a person who no longer exists is a jurisdictional failure and s.292B cannot cure it.
• Meet Lalwani v ITO High CourtHelps taxpayer
  I filed the death certificate and they still issued the 148 notice in my mother's name. Is it valid?
  No. The Madhya Pradesh High Court quashed the s.148 notice and the s.148A(d) order. Once the Department knew of the death, issuing the notice in the deceased's name was a failure to acquire jurisdiction, and ss.292B, 292BB and 159 do not cure it.
• Savita Kapila v ACIT High CourtHelps taxpayerValidity unconfirmed
  A section 148 notice was issued in my late father's name after he had died. Is the reassessment valid because we never told the department?
  No. The Delhi High Court quashed the notice and everything that followed. Issuing the notice in the name of the correct person, and not a dead person, is not a procedural requirement but a condition precedent to a valid notice, so the jurisdictional requirement of section 148 was not met. No notice was ever issued to the legal heir within the limitation in section 149(1)(b); the proceedings were simply transferred to her PAN. Section 159 does not help the department where nothing was pending in the assessee's lifetime, and there is no statutory obligation on legal heirs to intimate the death. Sections 292B and 292BB do not cure it.
• CIT v S.R. Batliboi & Associates High CourtHelps taxpayerHigh Courts differ
  The revised partnership deed was not filed with the return but was produced during the assessment. Does s.185 still disallow the partners' remuneration?
  No, on this judgment. The Calcutta High Court held that s.185 read with s.184, although worded in emphatic terms, is not intended to be mandatory. The Assessing Officer had refused to treat the return as defective under s.139(9); having refused that, he could not simultaneously hold the return to be in derogation of s.184(4) and disallow the deduction. The disallowance of Rs. 4,49,60,000 of partners' remuneration was deleted.
• Vijay Television P Ltd v DRP High CourtHelps taxpayer
  The AO skipped the draft order and passed a final one. Can a corrigendum cure that?
  No. The procedure in s.144C is mandatory and the draft order is the gateway to the eligible assessee's right to go to the DRP. Once a final order is passed, with a demand notice and penalty proceedings, the AO is functus officio and a corrigendum cannot convert it into a draft; the defect is an absence of power, not a curable mistake.
• CIT v SPL's Siddhartha Ltd High CourtHelps taxpayer
  My reopening notice was sanctioned by the Commissioner instead of the Joint Commissioner. Does approval by a more senior officer cure the defect?
  No. The Delhi High Court held that where section 151 names the Joint Commissioner as the authority to be satisfied, sanction by the Commissioner is not compliance, even though he is senior. The file here was routed through the Additional Commissioner, but he merely endorsed "CIT may kindly accord sanction" and applied no mind of his own. The Court held this was not an irregularity curable under section 292B. Where a statute requires a thing to be done in a certain manner it must be done in that manner alone, and the satisfaction of one authority cannot be substituted by that of another. The Revenue's appeal was dismissed.
• SHL (India) v DCIT High CourtCuts both ways
  If the Assessing Officer passes a final assessment order on an eligible assessee without first issuing a draft order, can s.292B save it?
  After a transfer pricing adjustment was proposed, the Assessing Officer passed a final order under s.143(3) without first forwarding a draft assessment order under s.144C(1). The Bombay High Court quashed the order, the demand notice and the penalty notice as void ab initio, and held that s.292B cannot confer jurisdiction that the officer never had.
• Cyberstar Infocom LLP v ITO ITATHelps taxpayer
  My company became an LLP and I told the officer, but he still issued the notice and passed the assessment in the old company's name. Is that just a clerical slip he can correct?
  No. The Bangalore Tribunal quashed the assessments as void ab initio. The company converted to an LLP on 27 April 2018 and the LLP wrote to the Assessing Officer on 31 May 2018 enclosing the Ministry of Corporate Affairs certificate and asking him to take the change of status on record. He nonetheless issued the section 143(2) notices and passed the orders under section 143(3) read with section 147 in the name of the company. Following Maruti Suzuki, the Tribunal held that an assessment in the name of a non-existent entity is a substantive illegality and not a defect curable under section 292B.
• Finesse International Design v DCIT ITATHelps taxpayerValidity unconfirmed
  The section 153D approval for my search assessment carries no DIN, even though the assessment order itself does. Does that invalidate the assessment?
  Yes, on this Tribunal's view. The Delhi Bench held that CBDT Circular No. 19/2019 requires a computer-generated DIN in the body of every departmental communication issued from 1 October 2019, and that a communication issued without one is invalid and deemed never to have been issued. The approval under section 153D dated 19 February 2021 carried no DIN. Because that approval is the fulcrum on which the final order rests, the Tribunal treated it as non est in law, and quashed the section 153A assessment and the section 156 demand notice built on it. It did not go into the merits.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.