Dissolution of a company does not by itself make an income-tax appeal infructuous where statutory liability may survive.

An income-tax appeal does not become infructuous merely because the assessee-company has been struck off and dissolved. The Supreme Court noted that the High Court had not considered the statutory scheme governing liability of a dissolved or discontinued company under the Income-tax Act and the Companies Act, and therefore could not treat the appeal as automatically spent. The matter had to be decided on merits in light of those provisions, and the High Court's order was set aside with the case remanded for fresh consideration.

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Issues: Whether the High Court was justified in dismissing the revenue's income-tax appeal as infructuous on the ground that the assessee-company had been struck off and dissolved.

Analysis: The appeal arose from dismissal under Section 260A of the Income-tax Act, 1961 after the company's name had been struck off from the register under Section 560(5) of the Companies Act, 1956. The Court noted that the High Court did not examine the effect of the relevant provisions dealing with liability of a dissolved or discontinued company, including Chapter XV of the Income-tax Act, 1961 and the corresponding provision in the Companies Act. On that basis, the Court held that dissolution of the company did not by itself render the tax appeal infructuous, and the merits still required adjudication in light of the statutory scheme governing liability in such cases.

Conclusion: The High Court was not justified in treating the appeal as infructuous; the order was set aside and the matter was remanded for fresh decision on merits.

Final Conclusion: The dispute was restored to the High Court for reconsideration in accordance with the applicable tax and company law provisions, without any determination on the underlying merits of the tax controversy.

Ratio Decidendi: An income-tax appeal does not become infructuous merely because the assessee-company has been struck off or dissolved, where the statutory framework preserves liability in such cases and requires adjudication on merits.

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