DEPUTY COMMISSIONER OF INCOME TAX, TIRUPPUR vs. CLASSIC SPINNING MILLS (P) LIMITED, TIRUPPUR

Whether in facts and circumstances of the case and in law, the Ld. CIT (A) is justified in holding that issuance of notice u/s 148 to a dissolved company is a jurisdictional error not curable u/s 292B. 2. Whether in facts and circumstances of the case and in law, the Ld. CIT (A) is justified in not considering the contention of the AO that during the period under scrutiny, the company was active. 3. Whether in facts and circumstances of the case and in law, the Ld. CIT (A) is justified in not considering the fact that where a company is dissolved in consequence to it being struck off, it shall be deemed to continue to be in existence for the purpose of discharging its statutory obligations

The brief facts of the case are that the assessee company had not filed its ITR for the relevant assessment year. Later on the Revenue came across an information that during the year under consideration the NPA of the assessee company from the concerned bank have been acquired by Invent Assets Securitization and Reconstruction Pvt. Ltd. and the assessee benefited with hair-cut of Rs. 15.42 Crs. With this background, a notice u/s. 148 of the Act was issued vide dated 06.04.2023. The assessee did not respond this notice issued u/s. 148 of the Act. Ultimately, assessment order was passed u/s. 144 r.w.s. 147 of the Act and the entire amount of Rs. 15.42 Crs. was added back to the income of the assessee along with another addition of Rs. 2.5 Crs u/s. 69A of the Act. The assessee being aggrieved preferred an appeal before the Ld. CIT (A) who in turn allowed the appeal of the assessee. Now, the Revenue being aggrieved preferred the present appeal before us. 3. We have gone through the order of the AO and the order of the Ld. CIT (A) and it is observed that the company was dissolved by the order of the Hon’ble Madras High Court w.e.f. 11.09.2020 vide Company Application No. 190 of 2020 and Company Application No. 802 of 2017 in C.P. No. 234 of 2015 and C.P. No. 234 of 2015. It is further observed that as mentioned (Supra) notice u/s. 148 of the Act was issued on 06.04.2023, i.e. after the dissolution of the company hence, the same is without authority of law. The Ld. CIT (A) rightly placed reliance [2019] 107 taxmann.com 375 (SC) PCIT, New Delhi v. Maruti Suzuki India Ltd., Wherein the Hon’ble Apex Court held as under: 33. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Page 2 of 3

Here, in this case also the assessee ceased to exist, the ratio laid down by the Hon’ble Supreme Court in the case of Maruti Suzuki India Ltd. reproduced (supra) squarely applicable and in the light of the decision, we do not find any error in the order of the Ld. CIT (A) and the same is confirmed. Resultantly, the grounds taken by the Revenue are dismissed. 5. In the result, the appeal of the Revenue is dismissed in above terms.