Service on non-existent entity invalidates post striking notices; assessment proceedings quashed where non existence was proved.

Condonation of delay was granted where the company was struck off and the erstwhile director proved unawareness; a 229 day delay in filing the appeal was condoned. Notices and assessment proceedings issued under the Income tax Act after the company was struck off w.e.f. 14.07.2017 were treated as service on a non existent entity; where non existence was established and communicated to tax authorities, those notices and the consequent assessment order were quashed and set aside by the Tribunal in favour of the assessee.

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Issues: (i) Whether the delay of 229 days in filing the appeal before the Tribunal should be condoned; (ii) Whether assessment proceedings and notices under section 148 and section 142(1) of the Income-tax Act, 1961, issued after the assessee company was struck off from the Registrar of Companies, are valid or liable to be quashed.

Issue (i): Whether the delay of 229 days in filing the appeal should be condoned.

Analysis: The Bench considered the explanation and documentary proof that the company was struck off from the Registrar of Companies w.e.f. 14.07.2017 and that the erstwhile director was consequently unaware of the proceedings; the condonation petition set out those circumstances and supporting certificates from the Registrar of Companies and Official Liquidator were placed on record.

Conclusion: Delay of 229 days is condoned in favour of the assessee.

Issue (ii): Whether notices issued under section 148 and section 142(1) of the Income-tax Act, 1961, after the company was struck off, are valid.

Analysis: The Bench examined the effect of the company's striking off (w.e.f. 14.07.2017) and the fact that the erstwhile director had informed the Assessing Officer of the company's non-existence; notices and assessment proceedings issued after the company ceased to exist were treated as service on a non-existent person and thus impermissible under the circumstances presented.

Conclusion: The assessment order and the notices under section 148 and section 142(1) of the Income-tax Act, 1961, issued after the company was struck off are quashed in favour of the assessee.

Final Conclusion: The appeal is allowed and the impugned assessment proceedings and orders are set aside on the ground that notices were served on and proceedings pursued against a company which had ceased to exist.

Ratio Decidendi: Notices and assessment proceedings under the Income-tax Act, 1961, served after the company has been struck off from the Registrar of Companies amount to service on a non-existent entity and, where the non-existence is established and notified to the tax authorities, such proceedings are liable to be quashed.

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