TaxTMI 
TaxTMI 
2023 (12) TMI 544
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....rch, 2011 issued by MCA , wherein the application made by the assessee from Easy Exit Scheme [EES] , 2010 dated 28th August, 2010, was accepted and in terms of Section 560(5) of the Companies Act, 1956, the name of the assessee company has been struck off from the register and the company was dissolved from that date and despite this fact available with the learned Assessing Officer, the assessment orders were passed in the name of "Silverline Trading Company Ltd." and therefore, such orders are bad and not sustainable. The learned Assessing Officer is aggrieved with this appellate order and is in appeal before us. 02. The learned Departmental Representative relied upon the decision of the Hon'ble Delhi HC in Sky Light Hospitality Llp Vs. ACIT. 03. The learned Authorized Representative relied upon the orders of the co-ordinate Bench in assessee's own case on identical facts and circumstances for A.Y. 2011-12 and for earlier years i.e. A.Y. 2007-08. 04. On careful consideration of the facts and rival contention, we find that the above appellant entity is not in existence since 18th March, 2011, as per the certificate issued by the Registrar of Companies, Maharashtra, Mu....
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....etter, and stating that no answer thereto has been received and that, if an answer is not received to the second letter within one month from the date thereof, a notice will be published in the Official Gazette with a view to striking the name of the company off the register. (3) If the Registrar either receives an answer from the company to the effect that it is not carrying on business or in operation, or does not within one month after sending the second letter receive any answer, he may publish in the Official Gazette, and send to the company by registered post, a notice that, at the expiration of three months from the date of that notice, the name of the company mentioned therein will, unless cause is shown to the contrary, be struck off the register and the company will be dissolved. (4) If, in any case where a company is being wound up, the Registrar has reasonable cause to believe either that no liquidator is acting, or that the affairs of the company have been completely wound up, and any returns required to be made by the liquidator have not been made for a period of six consecutive months, the Registrar shall publish in the Official Gazette and send to ....
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....ce to be sent under this section to a liquidator may be addressed to the liquidator at his own place of business." 7. From a reading of Section 560 of the Companies Act, it clearly transpires that after the requisite procedure prescribed under Subsections (1) to (4) is followed and the time mentioned in the notice referred to in Subsections 3 or 4 expires, the Registrar may strike off the name of the company concerned from the Register of Companies. If it does so, it shall publish a notice thereof in the Official Gazette and on publication of the notice in the Official Gazette, the company shall stand dissolved. However, proviso to Subsection (5) of Section 560 further provides that notwithstanding dissolution of the company, liability of every director, manager or other officer who was exercising any power of management and of every member of the company shall continue and may be enforced as if the company had not been dissolved. Proviso (b) further provides that nothing provided in Subsection (5) in respect of dissolution of company whose name has been struck off from the Register, shall affect the power of the competent Court to wind up a company. 8. The provis....
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....... (2) ................ (3) (i) The Income-tax Officer may, at any time or from time to time, by notice in writing require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee, to pay to the Income-tax Officer either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount. (ii) A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the assessee jointly with any other person and for the purposes of sub-section, the shares of the joint-holders in such account shall be presumed, until the contrary is proved, to be equal. (iii) A copy of the notice shall be forwarded to the assessee at his last address known to the Income-tax Officer, and in the case of a joint account to all the joint-holders at their last addresses....
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....suance thereof to the Income-tax Officer, he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear of tax due from him, in the manner provided in sections 222 to 225 and the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under section 222." 12. Section 179 of the Income Tax Act also assumes importance in the point we are discussing and stipulates that if the tax due from a private company in respect of any income of previous year become unrecoverable against the company for any reason, then every person who was a director of the private company at any time during the relevant previous year shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. Section 179 of the Income Tax Act reads thus:- "179. Liability of directors of private company in liquidation.- (1) [Notwithstanding anyt....
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....ough its director Jeane Fernades. 15. We are not in agreement with the argument of Mr. K.S. Johal, learned senior counsel that in terms of Section 250 of the Companies Act, 2013, the dissolved company is competent in its name to file first and second appeal as also the instant appeal. We do not agree with the learned senior counsel for the simple reason that Section 250 of the Companies Act, 2013 was not in existence in the year 2006 nor do we find any provision parallel to and in pari materia with Section 250 of the Companies Act, 2013 in the Companies Act, 1956, as was applicable at the relevant point of time. 16. True it is that in terms of Section 250 of the Companies Act, 2013, where a company stands dissolved under Section 248 of the Companies Act, 2013 (which is in pari materia with Section 560 of the Companies Act, 1956) the certificate of incorporation issued to such company shall be deemed to have been cancelled except for the purpose of realizing the amount due to the company or for payment or discharge of the liability or obligation of the company. 17. It is equally true that after promulgation of the Companies Act, 2013 and in view of the specific pro....
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....company which is rendered defunct because of stoppage of operations of the company and the company which is formally struck off and dissolved in terms of Subsection (5) of Section 560 of the Companies Act. We, however, cannot lose sight of the fact that on the date of passing of the assessment order, the company stood struck off from the Register and formally dissolved on the publication of the notice in the Official Gazette. 20. It is true that the appellant-director, who was apprehending that the liability for the tax due for the previous year assessed by the assessing authority against the company could be fastened on him should have been diligent enough to prosecute his appeal and bring true facts to the notice of the concerned authorities, however, we are also aware that when a company becomes defunct and its management goes haywire, there is nobody to take the responsibility of the affairs of the company. Even mice leave the ship when it is sinking. It is in these circumstances, perhaps, the director of the company could not lay his hand on the Official Gazette and was under a bona fide impression that the application for striking off the company from the Register of....
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....strar of companies under Section 560 of the Companies Act. In these circumstances, the Tribunal rightly held that there could not have been any assessment order passed against the company which was not in existence as on that date in the eyes of law it had already been dissolved. The Tribunal relied upon its earlier decision in Impsat Pvt. Ltd. v. ITA 276 ITR 136 (AT). We are of the opinion that the view taken by the Tribunal is perfectly valid and in accordance with law. No substantial question of law arises. Dismissed." 23. The relevant observations of the ITAT Delhi Bench in Impsat (P) Ltd. v. Income Tax Officer are also worth taking note of and are, thus, set out below:- "17. A reference to page 1901 of A. Ramaiya's commentary on the Companies Act, 1956 (12th Edition) by Hon'ble Justice Y.V. Chandrachud (former Chief Justice of India) shows the following extract from Halsbury"s Laws of England, fourth ediction, Vol.7, para 1448, page 809 under the heading "Effecting of dissolution". "The dissolution puts an end to the existence of the company. Unless and until it has been set aside, it prevents any proceedings being taken against promoters, d....