Standing of former director to challenge a struck off company's tax assessment denied as no director liability or recovery initiated.

Whether a former director has standing to challenge an assessment framed against a struck off company turns on whether the company retains juristic personality for tax proceedings and whether the director is an "assessee" by virtue of contingent liability. The tribunal found the demand remained that of the company and director liability arises only upon initiation of recovery proceedings under the statutory director liability mechanism; absent such proceedings a former director has no tax liability that makes him an assessee. Restoration of the company name or its consequences under company law do not, by themselves, grant a former director locus to contest the assessment. The appeal is not maintainable and is dismissed.

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Issues: Whether a former director has locus standi to challenge an assessment order passed under Sections 144/147 of the Income-tax Act, 1961 against a company whose name has been struck off from the Register of Companies.

Analysis: The matter turns on whether the struck-off company retains juristic personality for the purpose of contesting assessment proceedings and whether a former director thereby acquires standing as an 'assessee' under Section 2(7) of the Income-tax Act, 1961. The assessment demand, as framed, is payable by the erstwhile company and recovery against directors arises only upon initiation of proceedings under Section 179 of the Income-tax Act, 1961. Absent any proceedings under Section 179 or any recovery action against the former director, the former director does not incur a contingent tax liability that would make him a person by whom tax is payable within the meaning of Section 2(7). Related provisions concerning restoration of a company's name under the Companies Act, 2013 and consequences of restoration for limitation do not confer immediate standing on a former director to assail merits of an assessment before appellate forums; restoration proceedings may affect corporate status prospectively but do not revive or extend limitation periods under the Income-tax Act. Coordinate decisions were considered on the questions of maintainability where a company's name is struck off; however, where no recovery action under Section 179 is initiated against the director, challenge to merits by a former director is not maintainable.

Conclusion: The former director does not have locus standi to file the appeal challenging the assessment order against the struck-off company; the appeal filed by the erstwhile director is not maintainable and is dismissed.

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