TaxTMI 
TaxTMI 
2024 (1) TMI 1542
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....confirming the addition u/s. 68 to the extent of Rs. 3,03,00,000 Your appellant respectfully submits that, on facts and in law, the addition of Rs. 3,03,00,000 is unjustified and should therefore be deleted. 2. The briefly stated facts of the case are that the 'company' did not file its return of income for the year under consideration in terms of Section 139 of the Income Tax Act, 1961 (in short 'Act'). On receipt of the information by the ld. Assessing Officer that the company had made payments of Rs. 2.10 Crores for the purpose of acquiring an immovable property and other transactions of Rs.88 lakhs carried out through its bank account, the ld. Assessing Officer recorded the reasons to believe that income escaped assessment. After obtaining necessary approval from the appropriate authorities, the ld. Assessing Officer reopened the assessment by way of issuing notice u/s.148 of the Act on 23/03/2018, directing the assessee to file return of income. In response to said notice, the return of income was filed on behalf of the assessee on 04/04/2018 declaring 'Nil' total income. Further, objections were raised before the Assessing Officer against r....
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.... of the Act and impugned assessment order. The facts essential for disposing the issue-in-dispute of invalidity of notice issued u/s. 148 are summarised as under :- (i) The company M/s Chandan Realtors Pvt. Ltd was incorporated as a private limited company under the Companies Act, 1956 on 04/04/2001. But, the company has been struck off by the Registrar of Companies on 16/06/2017 by invoking his power u/s. 248(1) r.w.s. 248(5) of the Companies Act, 2013. (ii) Notice u/s.148 of the Act for reopening of the assessment has been issued by the Assessing Officer on 27/03/2018. Reopening of assessment was objected on behalf of the assessee, stating that Assessee Company was struck off and dissolved and therefore, it was not in existence and hence, notice issued on non-existent or dead person was invalid. The ld. Assessing Officer however rejected the objection of the assessee observing as under :- "8. Assessee's name was struck off by Registrar of Companies on 16.06.2017 sue moto because the assessee did not comply with the provisions of Companies Act also. The assessee had not informed the ROC that assessment proceedings for AY 2010-2011 were in progress ag....
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.... applying those provisions in the present case, Shri Subhash Jain, who could be called upon to pay the tax dues of non-existent Chandan Relators Pvt Ltd, therefore, he is an assessee who is aggrieved by the order u/s 250 dated 24/09/2019 passed by the ld. CIT(A) in the case of Chandan Realtors Pvt. Ltd. 5.1 He further referred to the decision of the Hon'ble Madras High Court in the case of Pandian Anbalagan vs. ITO in W.P. No. 11841 of 2022 & W.M.P No.11278 of 2022 dated 03/10/2023 and Hon'ble Bombay High Court in the case of Jitendra Chandralal Navlani and Anr vs Union of India in W.P. No. 1069 of 2016 dated 08/06/2016 wherein writ petitions were filed by the erstwhile director of the companies after the company names were struck off by the Registrar from his records. The ld. Counsel therefore, submitted that Shri Subhash Jain is also similarly placed i.e. it is an appeal by an erstwhile director of a non-existent company and hence deserved to be entertained and adjudicated. 5.2 The ld. Counsel submitted that in the case of Pandian Anbalagan vs. ITO (supra) and Jitendra Chandralal Navlani and Anr vs Union of India (supra) the respective Hon'ble High Courts have c....
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....y, certificate of incorporation of the company was valid. The ld. DR submits that said section 250 of Companies Act, 2013 give authority to the Income Tax department for issue of notice even on company stricken off from the registrar of companies and assessee cannot take shelter of said provisions. According to him, though the company was struck off from the registrar of the companies, its asset and liabilities were lying with the company and bank accounts were alive. Thus, the ld. Assessing Officer is within his powers to issue notice u/s.148 and complete the assessment on the assessee company under exception provided in section 250 of Companies Act, 2013. 7. We have heard rival submissions and perused the relevant material on record. In the case before us first issue is whether the appeal filed on behalf of the company is maintainable or not. The ld Counsel for the assessee submitted that on earlier occasion on being questioned on the maintainability of appeal, the form No. 36 has been revised in the name of Director of the company and claimed that he is entitled to file appeal on behalf of the struck off company in view of provisions of section 179 of the Act as he is liable ....
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....ing for the purpose of adjudication of the tax arrears and the consequence order by which the recovery proceedings are triggered by the Revenue. 15. If the proceedings pending before the Court or the Tribunal (regarding determination of quantum the tax/liability of paying the tax) is dismissed for having become in-fructuous without adjudicating the actual tax dues or the liability of the assessee to pay such tax in the manner known to the Law and based on the such dismissal of the proceedings, if the Revenue proceeds for the recovery of the 'such tax due', the rights of the Directors of the Company will be seriously jeopardy and the same will amount to denial of the rights guaranteed under the Law. 16. In the instant Appeal, if we allow the request of the Revenue dismiss the Appeal as in-fructuous, one hand the appeal will be dismissed having become in-fructuous on the other hand, the Revenue Department will initiate proceedings under Section 179 of the Income Tax Act and that too without even adjudicating in the manner prescribed under Law on the 'quantum of actual tax due' or 'liability to pay tax', in such even great in justice will be c....
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.... The appeal is allowed, in the above terms, without order on costs." (emphasis supplied) 20. The Hon'ble High Court of Judicature for Rajasthan in the case of Commissioner of Income Tax Vs. Gopal Shri Scrips Put. Ltd. in ITA No. 53/2000 vide order dated 09/08/2016 dismissed the appeal filed by the Revenue for having become in-fructuous since the Company had been struck off from the register of ROC and the said Company dissolved. The operative portion of the Hon'ble High Court is as under :- "On the last date of hearing when the matter came up before the Court on 05.07.2016, counsel for the appellant was directed to seek instructions about the present status of the Respondent assessee (Company) whether it is in existence or has become non-operational or defunct by passage of time. Sh. Anuroop Singhi, Adv., appearing for the appellant has placed for our perusal a communication issued from the office of Registrar of Companies dated 07.04.2011 indicating that pursuant to sub-section(5) of Section 560 of the Companies Act, 1956 the name of Gopal Shri Scrips Put. Ltd., has been struck off from the register and the said company is dissolved. In the li....
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....nce of business or dissolution". 14. The aforementioned two provisions, namely, one under the Companies Act and the other under the Income Tax Act specifically deal with the cases of the Companies, whose name has been struck off under Section 560 (5) of the Companies Act. 15. These provisions provide as to how and in what manner the liability against such Company arising under the Companies Act and under the Income Tax Act is required to be dealt with. 16. Since the High Court did not decide the appeal keeping in view the aforementioned two relevant provisions, the impugned order is not legally sustainable and has to be set aside. 17. In view of the foregoing discussion, the appeal succeeds and is accordingly allowed. The impugned order is set aside. The case is remanded to the High Court for deciding the appeal afresh on merits in accordance with law keeping in view the relevant provisions of Companies Act and the Income tax Act uninfluenced by any observations made by us on merits. 22. The Hon'ble Supreme Court in the case of M/s. Gopal Scrips Pvt. Ltd (supra) while allowing the Civil Appeal of the Revenue, dealt and relied on Sect....
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....the appeal is whether notice u/s.148 of the Act could be issued on the company which was struck off from the records of the registrar of the companies. Under the provisions of Section 248(1) of the companies Act, 2013, the registrar can strike off or remove the name of the company from the registrar of companies. Under section 248(2), the company may file an application for removing the name from the registrar of companies in case of certain situations. The registrar, after following the due process provided u/s.248(5) of the Act, is authorized to strike off name of company from the registrar of companies. The Section 248(7) however provided that the liability if any of any director or manager or any other officer who were exercising any power of management and any member of the company dissolved in subsection 5 may be enforced as if the company has not been dissolved. Further Section 250 of Companies Act, 2013 prescribe that when a company is dissolved under 248, then it cease to operate and certificate of Incorporation shall be deemed to have been cancelled except firstly, for the purpose of realizing the amount due to the company and for payment or secondly, for discharge of the....