TaxTMI 
TaxTMI 
2026 (8) TMI 1818
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....t. Ltd. company, Gaungour Suppliers Pvt. Ltd. 3. That it was beyond my knowledge that the appellate order has been passed and served on the mail. 4. That the above-mentioned office was not opened nearly two years. 5. That this delay in filing 2nd Appeal before your Honourable Member, ITAT, Kolkata Benches, Kolkata is due to the reasons stated above. 6. That the above-mentioned statement is true to the best of my knowledge and belief." 3. The Ld. AR reiterating the averments made in the Application, sought for condoning the delay in filing the captioned Appeal. 4. The Ld. DR submitted that, there is no sufficient cause to condone the inordinate delay, thus sought for dismissal of the captioned Appeals on delay in latches. 5. We have heard both the parties and perused the material. The Hon'ble Supreme Court time and again clarified that the delay in filing the appeal with sufficient cause should be looked into in a liberal way and shall condone the delay. In the landmark decision in Collector, Land & Acquisition vs. Mst. Katiji& Others (1987) 167 ITR 471 (SC), the Hon'ble Supreme Court settled the law that the delay when supported ....
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.... the Assessing Officer making the above mentioned addition on a struck off company and that addition has been blindly and illogically supported by the Ld. CIT(A) which is not correct, bias as well as detrimental to natural justice. 2. For that the observations and contentions of the Ld. CIT(A), NFAC, Delhi dismissing the appeal filed by the appellant on the grounds which are not correct, proper and based on mis-interpretation of facts." 8. The Learned Counsel for the Assessee vehemently submitted that Assessee company has been struck off on 29.08.2015 itself and the Assessee had surrendered the PAN card to the Department, therefore, the assessment proceedings initiated by the Assessing Officer for the assessment year 2012-13 is illegal and the Assessment Order dated 17.12.2018 passed against the struck off company is deserves to be quashed. Further submitted that the Ld. CIT(A) committed error in dismissing the Appeal of the Assessee, thus, sought for allowing the Appeal. 9. Per contra, the Ld. DR vehemently submitted that the assessment proceedings cannot be stalled merely on the ground of struck off of the Assessee company by the Registrar of Companies, the Departm....
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.... cannot be same against non-est entity. 12. Now, the question arises for consideration as to whether the assessment/ reassessment can be framed against struck off companies or not? Before answering the said question, as to whether an Assessment Order can be framed against struck off/non-est Company, we have to examine as to whether a first Appeal can be filed before the CIT(A) or the second Appeal before the Tribunal by the struck off Company or not. 13. The said issue has been considered by the Hon'ble Co-ordinate Bench of the Tribunal of the Delhi Benches in the case of M/s Dwarka Portfolio Private Limited (supra) wherein the Co-ordinate Bench of the Tribunal has also considered the Judgment of the Hon'ble Supreme Court in the case of Principal Commissioner of Income Tax Central -2 Vs. M/s. Mahagun Realtors Private Limited (SC) and the Judgment dated 12.10.2019 in the case of Gopal Shri Scrips Private Limited (supra), it has been held by the Tribunal that, though the Assessee company has been struck off under Section 248 of the Companies Act 2013, in view of sub-sections (6) and (7) of Section 248 and Section 250 of companies Act 2013, the Certificate of Incorporation issue....
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....me of the company from the register of companies on all or any of the grounds specified in sub-section (1) and the Registrar shall, on receipt of such application, cause a public notice to be issued in the prescribed manner: Provided that in the case of a company regulated under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application. The Section 248(2) will be invoked by the Company itself after extinguishing all its liabilities (including tax liabilities, if any). 7. The Companies can itself struck off under Section 248(2) of the Companies Act by its own only after 'extinguishing all the liabilities' (including the tax liabilities if any). But in the case of Company being struck off by the Registrar under Section 248(1) of the Companies Act, irrespective of existence of assets or the liabilities of the Company, the company will be stricken off if the Company commits any defaults mentioned in the Section 248(1) of the Act. 8. As per Section 248 (5) of the companies Act, the registrar of the Company shall publish notice of strike off the names of the compani....
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.... (8) Nothing in this section shall affect the power of the Tribunal to wind up a company the name of which has been struck off from the register of companies 9. When the Company is being struck off, there will be certain consequences. The Section 250 of the Companies Act deals with effect of Company notified as dissolved. Section 250 of the Companies Act "250. Where a company stands dissolved under section 248, it shall on and from the date mentioned in the notice under sub-section (5) of that section cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled from such date except for the purpose of realising the amount due to the company and for the payment or discharge of the liabilities or obligations of the company." Thus, if the Company being struck off, the same shall be ceased to operate as a company and the Certificate of Incorporation issued to it shall deem to have been cancelled from the such date except for the purpose of realizing the amount due to the Company and for the purpose of payment or discharge of liabilities or obligation of the Company. 10. Thus, Com....
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....any at any time during the relevant previous year shall be jointly and severally liable for the payment of such taxes unless he proves that non-recovery cannot be attributed to any gross neglect misfeasance or breach of duty on his part in relation of the Company. Section 179 of Income tax Act reads as follows:- 179. (1) Notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), where any tax due from a private company in respect of any income of any previous year or from any other company in respect of any income of any previous year during which such other company was a private company cannot be recovered, 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 nonrecovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. (2) Where a private company is converted into a public company and the tax assessed in respect of any income of any previous year during which such company was a private company cannot be recovered, the....
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....has not forgone the right to recover tax due or Written-off the demand on the ground of Company being struck off by the ROC, the right of the assessee to determine the tax liability in due process of law cannot be denied by dismissing the Appeal pending before us. 18. Further, in a case where the CIT(A) deletes the addition made by the A.O and if Revenue files Appeal before the Tribunal, even in a case where the Revenue is having a water tight case on merit, by dismissing the Appeal for having become in-fructuous will also result in non-adjudication of the actual tax due by the assessee and the Revenue cannot recover the actual tax dues from the assessee. In such events, the Department of Revenue will be left with no remedy, which is contrary to the root principal of law 'Ubi Jus Ibi Remedium'. 19. The Hon'ble Apex Court while dealing with amalgamated Companies in the case of Pr. Commissioner of Income Tax Vs. Mahagun Realtors Pvt. Ltd., held that, 'whether corporate death of an entity upon amalgamation per se invalidates a tax assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 (and its equivalent in th....
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....d in examining the substantial question of law which has been raised for consideration in the instant appeal and on account of the sechange in circumstances, the present appeal has become infructuous and accordingly stands dismissed. However, the appellant is still at liberty to file application if any occasion arises in future." 21. The said order of Hon'ble High Court of Judicature for Rajasthan dated 09/08/2016 in ITA No. 53/2000 has been challenged by the Revenue Department before the Hon'ble Supreme court of India in Civil Appeal No. 2922/2019 (CIT Jaipur Vs. M/s. Gopal Scrips Pvt. Ltd.). The Hon'ble Apex Court vide order dated 12/03/2019 held that, the High Court was wrong in dismissing the appeal as having rendered infructuous and further directed to decide the appeal afresh on merit in accordance with law in view of the relevant provisions of Companies Act and Income Tax Act. The relevant portions are hereunder: "9. Having heard the learned counsel for the appellant (Income Tax Department) and on perusal of the record of the case, we are constrained to allow the appeal, set aside the impugned order and remand the case to the High Court for deciding the app....
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....rovisions have been introduced in the Companies Act, 2013 in Sub-Section sub-Sections (6) and (7) of Section 248 of the Companies Act. Therefore, the ratio laid down in the case of Gopal Scrips Pvt. Ltd (supra) is squarely applicable to the issue in hand. 23. In the case of M/s. Gopal Scrips Pvt. Ltd (supra), the Department of Revenue was having grievance on the Order of the Hon'ble High Court of Judicature for Rajasthan in dismissing the Appeal (ITA) for having become in fructuous on the ground that the Assessee company was struck off. The Hon'ble Supreme Court has set aside the Order of the Hon'ble High Court of Judicature for Rajasthan and directed to decide the Appeal on merit. Ironically now the very same Department of revenue is seeking before us to dismiss the present Appeal as in-fructuous since the assessee company has been struck off. The Department cannot have such double standard. 24. CONCLUSION: (i). Though the Assessee company has been struck off under Section 248 of the Companies Act 2013, in view of sub-sections (6) and (7) of Section 248 and Section 250 of companies Act 2013, the Certificate of Incorporation issued to the Assessee company....
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.... 12. In this regard, it would also be relevant to refer to Section 250 of the Companies Act, 2013, which reads as under: - "250. Effect of company notified as dissolved.-Where a company stands dissolved under section 248, it shall on and from the date mentioned in the notice under sub-section (5) of that section cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled from such date except for the purpose of realising the amount due to the company and for the payment or discharge of the liabilities or obligations of the company." (Emphasis Supplied) 13. Section 250 of Companies Act of 2013 is a new provision and it declares that even where a Company is dissolved in consequence to it being struck off under Section 248, it shall be deemed to continue to be in existence for the purpose of discharging its liabilities. The said section recognizes the continuing liability of a struck off company, which is in addition to Section 248(7) of the Companies Act, 2013, which reads as under: "248. Power of Registrar to remove name of company from register of companies. - (1) XXX XX....
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....n 506(5) of the Companies Act. 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. 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." 16. It is pertinent to observe that in the judgment of Gopal Shri Scrips (Supra), there was no order restoring the Company and it remained to be non-existent, being struck off. Despite the said fact, the Supreme Court, after referring to proviso (a) to Sub-section (5) of Section 560 of the Companies Act, 1956 and Chapter XV of the Act of 1961, held that the High Court was wrong in dismissing the appeal filed against such a struck off Company and remanded the matter to decide the appeal on merits. 17. In the present proceedings, the Company has admittedly been restored and as it has been observed above that statutorily upon restoration, the Company under Section 252(3) of the Companies Act, 2013, is deemed to not have been struck off from the register of companies at all. Accordingl....
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....reply impugning the demand stating that the assessment order was against a dead company and therefore the appellant is merely seeking to legalise its act which is contrary to the provisions of law. The assessments made against a struck off company are nonest. The respondent have raised other points also challenging the notice and impugning it in Writ Petition (Civil) 7122/2019 filed before the Hon'ble High Court of Delhi. The Hon'ble High Court of Delhi has taken note of the fact that the name of the company has been struck off, and directed the appellant to continue the assessment proceedings, but not pass the final order until further directions. The respondent's have further submitted that they have accounted for all funds received by them. 9. Keeping in view the submission made, the appellant has justified the grounds on which it seeks restoration of the name of the company so as to proceed further. It is equally expedient for the respondent company to seek its restoration as they wish to contest the claim made by the appellant before any judicial forum." 20. It would be relevant to note that the Company was initially struck off by the Ministry of ....