CREATIVE FINANCIAL SERVICES PRIVATE LIMITED,DELHI vs. INCOME TAX OFFICER, WARD 6(1) DELHI, DELHI

The appeals in & 3807/Del/2024 for AYs 2010-11 and 2011-12 arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] dated 29.03.2024 against the order of assessment passed u/s 147 r.w.s. 144 of the Income-tax Act, 1961 dated 28.06.2024 for AY 2010-11 and 24.12.2018 for AY 2011-12 (hereinafter referred to as ‘the Act’) by NFAC (hereinafter referred to as ‘ld. AO’).

Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. The fact relevant for AY 2010-11 are taken up for adjudication and the decision rendered thereon shall apply mutatis mutandis for AY 2011-12 also except with variance in figures.

Though the assessee has raised several grounds before us challenging the validity of reassessment on law as well as on merits, I find the crucial issue to be decided in the instant case is as to whether in assessment per se could be & 3807/Del/2024 Creative Financial Services Pvt. Ltd framed in the hands of the assessee in the facts and circumstances of the instant case.

I have heard the rival submissions and perused the material available on record. At the outset, I find that name of the assessee company was struck off in terms of Section 560 of the Companies Act, 1956 on 29.04.2015 itself. The statutory Form FTE was filed by the assessee before the Registrar of Companies (ROC). The evidence in this regard is enclosed in pages 76 to 82 of the Paper Book. For AY 2010-11, the assessee has already filed return of income on 11.10.2010 declaring total income of Rs. 36,311/-. The assessee had filed the return together with the audited financial statements and computation of total income. The assessment was sought to be reopened by the ld AO vide issuance of notice u/s 148 of the Act dated 30.03.2017 which is after the date of striking off of the assessee company from the records of ROC. The assessee vide letter dated 19.05.2017 informed the ld AO that the assessee company have been struck off by the ROC which fact was already intimated to the ld AO on 27.10.2015. The assessee also placed on record the evidence in this regard which is enclosed at page 89 of the Paper Book. Despite this fact, the ld AO proceeded to continue with the reassessment proceedings in the hands of the assessee. Further, the assessee also sought information under Right to Information Act (RTI). An order u/s 7 of the RTI Act, 2005 stood passed on 12.02.2018 addressed to Shri Suresh Garg, last Director of the assessee company, wherein, the ld Central Public Information Officer (CPIO) had categorically agreed that after the issuance of notice u/s 148 of the Act, the Income Tax Department had initiated the process of filing of appeal before the National Company Law Tribunal (in short NCLT), New Delhi for restoration of the name of the company. The order passed u/s 7 of the RTI Act on 12.02.2018 is enclosed in pages 105 and 106 of the Paper Book, from the perusal of which, it is very clear that as on date of recording of reasons by the ld AO, the assessee company was not in existence at all and therefore, no valid notice could have Page | 2 & 3807/Del/2024 Creative Financial Services Pvt. Ltd been issued on the assessee u/s 148 of the Act. As stated supra, the fact of assessee company being struck off from the records of ROC had already been intimated to the ld AO on 27.10.2015 itself. Despite that intimation, the ld AO had proceeded to issue notice u/s 148 of the Act on 30.03.2017 on a non- existent company. Hence, I have no hesitation to conclude that the entire reassessment proceedings deserves to be quashed as void ab initio. Accordingly, grounds raised for AY 2010-11 are allowed.