Court quashes assessment order against struck-off company, emphasizing revival process before assessment proceedings.

The Court quashed the assessment order against a struck-off company for AY 2015-16, emphasizing the need to revive the company before initiating assessment proceedings. The respondent was directed to follow the proper procedure by reviving the company through the NCLT under the Companies Act before re-initiating proceedings under the Income Tax Act. The Writ Petition was allowed, and the assessment order was annulled.

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Issues:
The issues involved in the judgment are the legality of passing an assessment order against a struck-off company u/s 176 of the Income Tax Act and the requirement of revival of the company for initiating proceedings under Section 147 of the Income Tax Act.

Assessment Order Against Struck-off Company:
The petitioner, a Director of a struck-off company, challenged an assessment order for AY 2015-16 issued under Section 148 of the Income Tax Act. The petitioner argued that as the company was struck off, the assessment order could not be reopened against it. The respondent contended that under Sections 176(5) and 176(7) of the Income Tax Act, an assessment order could be passed against the Principal Officer of the struck-off company.

Court's Analysis and Decision:
The Court noted that the Income Tax Act does not specifically address the situation of a struck-off company under Section 176. It observed that once a company is struck off, passing an assessment order against it would be akin to passing an order against a "dead person." The Court held that the proper course for the respondent/Department would be to revive the company through the NCLT as per Section 252 of the Companies Act and then initiate proceedings under Section 147 of the Income Tax Act. Consequently, the Court quashed the impugned assessment order dated 30.03.2022 against the struck-off company for AY 2015-16.

Conclusion:
The Writ Petition was allowed, and the assessment order was quashed. The Court emphasized the necessity of reviving the company before re-initiating assessment proceedings, highlighting the importance of following the prescribed legal procedures for such cases.

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