Mr. Puneet Rai, Sr. Standing Counsel with Mr. Ashvini Kumar and Mr. Rishab Nangia v. VEDANTA LTD. Through

Judgment

1. The Principal Commissioner impugns the order of the Income Tax Appellate Tribunal1 dated 24 December 2020. We had by our order of 29 July 2024 admitted the instant appeal on the following question of law: - ―A. Whether the inadvertent mistake committed by the TPO as well as Assessing Officer ["AO"] in not mentioning the name of the entity correctly is a curable mistake under the Income Tax Act, 1961 ["Act"] specifically rectifiable in light of decision rendered by the 1 Tribunal ITA 88/2022 Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:17.01.2025 14:42:31 Supreme Court in case of Sky Light Hospitality LLP vs. ACIT [(2018) 13 SCC 147]?‖

2. The question of law as set out above however came to be rectified in terms of our order dated 13 September 2024 by way of which the expression ―as well as Assessing Officer‖ came to be deleted.

3. The undisputed facts which emerge from the record are as follows. The respondent-assessee, M/s Vedanta Limited2 is the resultant entity which came into existence consequent to M/s Cairn India Limited3 amalgamating with it from an Effective Date of 01 April 2017. The Appointed Date under the Scheme of Amalgamation was stated to be 01 April 2016.

4. A reference with respect to international transactions pertaining to Assessment Year4 2015 – 16 came to be made to the Transfer Pricing Officer5 on 21 September 2017. The TPO upon conclusion of those proceedings proceeded to pass an order referable to Section 92 CA(3) of the Income Tax Act, 19616 on 29 October 2018. It however becomes pertinent to note that the order referable to Section 92 CA (3) was drawn in the name of Cairn and which entity had ceased to exist in the eyes of law as on 01 April 2017.

5. It is the case of the respondent-assessee that the factum of amalgamation was duly communicated to the TPO in terms of its 2 Vedanta 3 Cairn 4 AY 5 TPO 6 Act ITA 88/2022 Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:17.01.2025 14:42:31 submissions dated 13 December 2017. However, and notwithstanding that information having been duly provided, the TPO proceeded to frame an order in the name of Cairn. The aforesaid order of the TPO resulted in the framing of a draft assessment order by the Assessing Officer7 on 28 December 2018. The said order was styled to have been made in the name of ―M/s Vedanta Limited (Formerly known as Cairn India Ltd.)‖. It becomes pertinent to note that the draft assessment order was not framed in respect of the respondent-assessee being a successor of Cairn. On the contrary, the AO chose to use the expression ―formerly known as….‖. We lay emphasis on this since Vedanta had come to be constituted pursuant to a Scheme of Amalgamation as opposed to a mere change of the corporate name of an entity.

6. Between the passing of the order under Section 92CA(3) and the framing of the draft assessment order on 28 December 2018, the TPO passed an order on 12 December 2018 seeking to rectify what it claimed was a mistake and a typographical error. That order reads as under:- “Order u/s 92CA(5) r.w. Sec 154 of the Income Tax Act. 1961 As apparent from the records, a typographical error in table has crept in inadvertently in the Transfer Pricing Order u/s 92CA (3) dated 29.10.2018 issued by this office. The assessing officer has informed and requested to rectify through later dated 23.11.2018 which was received in this office on 10.12.2018 reminding the error i.e. name and PAN of the assessee was typed wrongly M/s Cairn India Ltd. in place of M/s Vedanta Ltd. The same has been perused.

2. Accordingly, of the said order will be read as under: 7 AO ITA 88/2022 Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:17.01.2025 14:42:31 On perusal of the said order, it is seen that the order is passed by TPO on the name and PAN of M/s Cairn India Ltd. which in non- existence entity and the M/s Cairn India is now merged with the M/s Vedanta Ltd. Therefore the mistake is apparent from record and same has been rectified by u/s 154 of the IT Act. Apart from the above all other remaining Para and contents

3. of the order u/s 92CA (3) dated 29.10.2018 will remain unchanged. (ABHISHEK TRIPATHY, IRS) ASSISTANT COMMISSIONER OF INCOME TAX, TRANSFER PRICING OFFICER-3(3)( I), NEW DELHI.”

7. The objections preferred by the respondent-assessee to the draft assessment order ultimately came to be disposed of by the Dispute Resolution Panel8 in terms of an order dated 20 September 2019 and the proceedings culminated in the framing of a final assessment order on 28 November 2019.

8. Mr. Rai, learned counsel appearing in support of the appeal has essentially sought to contend that the mistake which had crept into the original order passed under Section 92 CA (3) was one which was rectifiable and thus would have been liable to be sustained bearing in mind the decision of this Court in Sky Light Hospitality LLP v. Assistant commissioner of Income-tax9.

9. According to learned counsel, notwithstanding what the Supreme Court has ultimately come to hold in Principal Commissioner of 8 DRP 9 2018 SCC OnLine Del 7155 ITA 88/2022 Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:17.01.2025 14:42:31 Income Tax, New Delhi v. Maruti Suzuki (India) Limited10, the mistake in the present case would fall within the scope of Section 292B read along with Section 154 in light of the facts being similar to those which obtained in Sky Light.

10. Mr. Vohra, learned senior counsel appearing for the respondent- assessee, on the other hand, submitted that the order of the TPO dated 29 October 2018 clearly suffered from a patent and fatal mistake which was clearly not rectifiable either under Section 154 or Section 292B of the Act. According to learned senior counsel, the challenge as mounted is liable to be negated bearing in mind the judgment rendered by this Court in International Hospital Limited v. DCIT Circle 12(2)11.

11. We note that apart from the aforesaid, the Tribunal has held against the appellant also on the ground of limitation, with it coming to the conclusion that the final assessment order could have, at best, been framed by 31 December 2018. In view of the aforesaid, it has come to additionally hold that the final order of assessment dated 28 November 2019 passed by the AO is barred by limitation.

12. Insofar as this issue is concerned, we do not propose to render any opinion since the appeal stood admitted only in respect of the question whether the TPO could have cured the mistake bearing in the mind the judgment in Sky Light. 10 (2020) 18 SCC 331 11 2024 SCC OnLine Del 6730 ITA 88/2022 Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:17.01.2025 14:42:31

13. In International Hospital, we had an occasion to notice the decision of the Supreme Court in Maruti Suzuki in extenso and where the distinguishable facts which underpinned its judgment in Sky Light had been duly noted. It would be apposite to extract the following passages from our judgment in International Hospital: - ―13. According to the writ petitioners, the challenge on grounds noticed above is no longer res integra and stands conclusively answered by the Supreme Court in Maruti Suzuki. It becomes pertinent to note that the judgment of the Supreme Court in Maruti Suzuki had come to be rendered on an appeal which arose from a judgment of this Court and which while upholding the decision rendered by the Tribunal had held that an assessment made in the name of Suzuki Powertrain India Ltd., and which had evidently under an approved Scheme amalgamated with Maruti Suzuki India Ltd., was a nullity. On facts it emerged that MSIL had duly intimated the AO of the amalgamation prior to the case being selected for scrutiny assessment. Notwithstanding that information being available, the AO appears to have framed a draft assessment order in the name of SPIL. ****

17. In Maruti Suzuki it appears to have been urged by and on behalf of the Revenue that the decision in Spice Entertainment would not hold good in light of the decision which our High Court had pronounced in Sky Light Hospitality and which had come to be affirmed by the Supreme Court. Dealing with the aforesaid contention, the Supreme Court in Maruti Suzuki observed as follows: ―28. The submission, however, which has been urged on behalf of the Revenue is that a contrary position emerges from the decision of the Delhi High Court in Skylight Hospitality LLP [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296] which was affirmed on 6-4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] by a two-Judge Bench of this Court consisting of Hon'ble Mr. Justice A.K. Sikri and Hon'ble Mr. Justice Ashok Bhushan. In assessing the merits of the above submission, it is necessary to extract the order dated 6-4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] of this Court : (Skylight Hospitality ITA 88/2022 Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:17.01.2025 14:42:31 case[Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147], SCC p. 147, para 1) ―1. In the peculiar facts of this case, we are convinced that wrong name given in the notice was merely a clerical error which could be corrected under Section 292-B of the Income Tax Act. The special leave petition is dismissed. Pending applications stand disposed of.‖ Now, it is evident from the above extract that it was in the peculiar facts of the case that this Court indicated its agreement that the wrong name given in the notice was merely a clerical error, capable of being corrected under Section 292- B. The ―peculiar facts‖ of Skylight Hospitality emerge from the decision of the Delhi High Court [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296]. Skylight Hospitality, an LLP, had taken over on 13-5-2016 and acquired the rights and liabilities of Skylight Hospitality Pvt. Ltd. upon conversion under the Limited Liability Partnership Act, 2008 (the LLP Act, 2008). It instituted writ proceedings for challenging a notice under Sections 147/148 of the 1961 Act dated 30-3-2017 for AY 2010-2011. The ―reasons to believe‖ made a reference to a tax evasion report received from the investigation unit of the Income Tax Department. The facts were ascertained by the investigation unit. The reasons to believe referred to the assessment order for AY 2013-2014 and the findings recorded in it. Though the notice under Sections 147/148 was issued in the name of Skylight Hospitality Pvt. Ltd. (which had ceased to exist upon conversion into an LLP), there was, as the Delhi High Court held ―substantial and affirmative material and evidence on record‖ to show that the issuance of the notice in the name of the dissolved company was a mistake. The tax evasion report adverted to the conversion of the private limited company into an LLP. Moreover, the reasons to believe recorded by the assessing officer adverted to the approval of the Principal Commissioner. The PAN number of LLP was also mentioned in some of the documents. The notice under Sections 147/148 was not in conformity with the reasons to believe and the approval of the Principal Commissioner. It was in this background that the Delhi High Court held that the case fell within the purview of Section 292-B for the following reasons ITA 88/2022 Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:17.01.2025 14:42:31 : (Skylight Hospitality case [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296], SCC OnLine Del para 18) ―18. … There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated 11-4-2017. They had objected to the notice being issued in the name of the Company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s. Skylight Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused.‖

29. The decision in Spice Entertainment [Spice Entertainment Ltd. v. Commr. of Service Tax, 2011 SCC OnLine Del 3210 : (2012) 280 ELT 43] was distinguished with the following observations : (Skylight Hospitality case [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296], SCC OnLine Del para 19) ―19. Petitioner relies on Spice Infotainment v. CIT [ This judgment has also been referred to as Spice Infotainment Ltd. v. CIT, (2012) 247 CTR 500 (Del)]. Spice Corp. Ltd., the company that had filed the return, had amalgamated with another company. After notice under Sections 147/148 of the Act was issued and received in the name of Spice Corp. Ltd., the assessing officer was informed about amalgamation but the assessment order was passed in the name of the amalgamated company and not in the name of amalgamating company. In the said situation, the amalgamating company had filed an appeal and issue of validity of assessment order was raised and examined. It was held that the assessment order was invalid. This was not a case wherein notice under Sections 147/148 of the Act was declared to be void and invalid but a case in which assessment order was ITA 88/2022 Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:17.01.2025 14:42:31 passed in the name of and against a juristic person which had ceased to exist and stood dissolved as per provisions of the Companies Act. Order was in the name of non-existing person and hence void and illegal.‖

30. From a reading of the order of this Court dated 6-4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] in the special leave petition filed by Skylight Hospitality LLP against the judgment of the Delhi High Court rejecting its challenge, it is evident that the peculiar facts of the case weighed with this Court in coming to this conclusion that there was only a clerical mistake within the meaning of Section 292-B. The decision in Skylight Hospitality LLP [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296] has been distinguished by the Delhi, Gujarat and Madras High Courts in: (i) Rajender Kumar Sehgal [Rajender Kumar Sehgal v. CIT, 2018 SCC OnLine Del 12890]; (ii) Chandreshbhai Jayantibhai Patel v. CIT, 2018 SCC OnLine Guj 4812]; and Jayantibhai Patel [Chandreshbhai (iii) Alamelu Veerappan [Alamelu Veerappan v. CIT, 2018 SCC OnLine Mad 13593].