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Facts
The assessee company, M/s Chandan Realtors Pvt. Ltd., was struck off from the Registrar of Companies in 2017. The Assessing Officer reopened the assessment for AY 2011-12 by issuing a notice under Section 148. The assessee objected to this, arguing that a notice cannot be issued to a non-existent entity. The Assessing Officer proceeded with the assessment and made an addition of Rs. 3,03,00,000 under Section 68.
Held
The Tribunal held that under Section 250 of the Companies Act, 2013, a company, even if struck off, continues to exist for the purpose of discharging its liabilities. Therefore, the notice issued under Section 148 was valid. The Tribunal also upheld the addition made by the CIT(A) as the assessee failed to provide an explanation for the bank deposits.
Key Issues
1. Validity of notice under Section 148 issued to a struck-off company. 2. Validity of addition made under Section 68 without explanation.
Sections Cited
Section 139, Section 148, Section 143(3), Section 147, Section 68, Section 248, Section 250, Section 252, Section 253, Section 179, Section 226(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI PAVAN KUMAR GADALE
This appeal on behalf of M/s Chandan Realtors P Ltd (i.e. a company which has been struck off from records of Registrar of Companies ) is directed against order dated 24/09/2021 passed by the ld. Commissioner of Income-Tax (Appeals)- National Faceless
2 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd.
Appeal Centre, Delhi (in short ld. CIT(A) for A.Y.2011-12, raising Appeal Centre, Delhi (in short ld. CIT(A) for A.Y.2011 Appeal Centre, Delhi (in short ld. CIT(A) for A.Y.2011 following grounds:-
“1. The learned CIT(A) has erred in confirming the validity of notice issued u/s. “1. The learned CIT(A) has erred in confirming the validity of notice issued u/s. “1. The learned CIT(A) has erred in confirming the validity of notice issued u/s. 148 and consequently the validity of the impugned order passed u/s. 143 (3) 148 and consequently the validity of the impugned order passed u/s. 143 (3) 148 and consequently the validity of the impugned order passed u/s. 143 (3) r.w.s.
Your appellant respectfully submits that the notice Your appellant respectfully submits that the notice u/s. 148 and consequently u/s. 148 and consequently the impugned order u/s. 143 (3) r.w.s. 147 are invalid and deserves to be the impugned order u/s. 143 (3) r.w.s. 147 are invalid and deserves to be the impugned order u/s. 143 (3) r.w.s. 147 are invalid and deserves to be annulled 2. The learned CIT (A) has erred in confirming the addition u/s. 68 to the extent 2. The learned CIT (A) has erred in confirming the addition u/s. 68 to the extent 2. The learned CIT (A) has erred in confirming the addition u/s. 68 to the extent of Rs. 3,03,00,000 Your appellant respectfully submits that, on f Your appellant respectfully submits that, on facts and in law, the addition of Rs. acts and in law, the addition of Rs. 3,03,00,000 is unjustified and should therefore be deleted. 3,03,00,000 is unjustified and should therefore be deleted.
The briefly stated facts of the case are that the 2. The briefly stated facts of the case are that the ‘company company’ did not file its return of income for the year under consideration in terms of file its return of income for the year under consideration in terms of 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 Section 139 of the Income Tax Act, 1961 (in short ‘Act’). On receipt Section 139 of the Income Tax Act, 1961 (in short ‘Act’). On receipt of the information by the ld. Assessing Officer that the company of the information by the ld. Assessing Officer that the company of the information by the ld. Assessing Officer that the company had made payments of Rs. 2.10 Crores for t payments of Rs. 2.10 Crores for the purpose of acquiring he purpose of acquiring an immovable property and other transactions of Rs.88 lakhs an immovable property and other transactions of Rs.88 lakhs an immovable property and other transactions of Rs.88 lakhs carried out through its bank account, t d out through its bank account, the ld. Assessing Officer he ld. Assessing Officer recorded the reasons to believe recorded the reasons to believe that income escaped assessment. income escaped assessment. After obtaining necessary approval from the necessary approval from the appropriate authorities, appropriate authorities, the ld. Assessing Officer the ld. Assessing Officer reopened the assessment by way of issuing reopened the assessment by way of issuing notice u/s.148 of the Act on 23 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 file return of income. In response to said notice, the return of file return of income. In response to said notice, the return of income was filed on behalf of t was filed on behalf of the assessee on 04/04/2018 declaring on 04/04/2018 declaring ‘Nil’ total income. Further, objection income. Further, objections were raised s were raised before the Assessing Officer against reopening of the assessment mainly on against reopening of the assessment mainly on against reopening of the assessment mainly on the ground that the assessee company was struck off from the the ground that the assessee company was struck off from the the ground that the assessee company was struck off from the 3 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd.
Registrar of companies and was d Registrar of companies and was dissolved on 16/06/2017 issolved on 16/06/2017, therefore, notice issued on a non therefore, notice issued on a non-existent entity was invalid. The ld. existent entity was invalid. The ld. Assessing Officer however, noted that during the year under Assessing Officer however, noted that during the year under Assessing Officer however, noted that during the year under consideration the assessee had carried out transactions of purchase consideration the assessee had carried out transactions of purchase consideration the assessee had carried out transactions of purchase of immovable property and of immovable property and assessee retained a valid Permanent e retained a valid Permanent Account Number (PAN), Account Number (PAN), thus, merely struck off of name from the thus, merely struck off of name from the office of Registrar of companies office of Registrar of companies, did not render the assessee did not render the assessee company as ‘non-existent existent’. The ld. Assessing Officer informed that ’. The ld. Assessing Officer informed that there is a provision in the Companies Act, there is a provision in the Companies Act, 2013 for revival of the for revival of the company within 20 years company within 20 years from the date of struck off from the struck off from the Registrar of the Companies. He further informed that while striking Registrar of the Companies. He further informed that while striking Registrar of the Companies. He further informed that while striking off by the Registrar of Companies, rar of Companies, the assessee should have the assessee should have objected. Thereafter, the ld. Assessing Officer completed the re hereafter, the ld. Assessing Officer completed the re hereafter, the ld. Assessing Officer completed the re- assessment and made addition u/s.68 of the Act amounting to assessment and made addition u/s.68 of the Act assessment and made addition u/s.68 of the Act Rs.3,03,00,000/- for for credit entries appearing in bank account entries appearing in bank account of assessee company. On fu . On further appeal, on behalf of the assessee on behalf of the assessee company before the ld. CIT(A) company before the ld. CIT(A) , it was challenged that , it was challenged that assessment could not be made on a dead person. The assessee als made on a dead person. The assessee als made on a dead person. The assessee also challenged additions on merit. The ld. CIT(A) rejected the grounds challenging . The ld. CIT(A) rejected the grounds challenging . The ld. CIT(A) rejected the grounds challenging the validity of the re he re-assessment in view of the decision of the assessment in view of the decision of the Hon’ble Supreme Court in the case of CIT- Jaipur vs. Gopal Shri Jaipur vs. Gopal Shri Hon’ble Supreme Court in the case of Scrips (P) Ltd. 104 taxmann.com 192(SC) Scrips (P) Ltd. 104 taxmann.com 192(SC), wherein it is held that wherein it is held that the assessment order in the case of the assessment order in the case of defunct company cannot be held company cannot be held to be invalid in view of the provision of Section 560(5) proviso (a) of d in view of the provision of Section 560(5) proviso (a) of d in view of the provision of Section 560(5) proviso (a) of the Companies Act as well as Chapter XV of the Income Tax Act. As the Companies Act as well as Chapter XV of the Income Tax Act the Companies Act as well as Chapter XV of the Income Tax Act
4 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd. far as merit of the addition is concerned, the ld. CIT(A) upheld of the addition is concerned, the ld. CIT(A) upheld of the addition is concerned, the ld. CIT(A) upheld the same in view of no source of deposit explained by t in view of no source of deposit explained by the assessee for in view of no source of deposit explained by t credits appearing in its bank account. Aggrieved, the appeal has in its bank account. Aggrieved, the appeal has in its bank account. Aggrieved, the appeal has been filed before the Tribunal on behalf of the assessee company been filed before the Tribunal on behalf of the assessee company been filed before the Tribunal on behalf of the assessee company challenging that notice u/s.148 and the consequent assessment that notice u/s.148 and the consequent assessment that notice u/s.148 and the consequent assessment order passed is invalid being passed on non order passed is invalid being passed on non-existent entit existent entity. The addition on merit has also been challenged. addition on merit has also been challenged.
Before us, the assessee has filed a paper book containing pages assessee has filed a paper book containing pages assessee has filed a paper book containing pages 1-32. The assessee also filed 32. The assessee also filed a copy of the various provisions of the copy of the various provisions of the Companies Act, 2013. Companies Act, 2013.
The ground No. 1 of the appeal relates to challenge of notice The ground No. 1 of the appeal relates to challenge of notice The ground No. 1 of the appeal relates to challenge of notice u/s 148 of the Act and impugned assessment order. The facts u/s 148 of the Act and impugned assessment order. u/s 148 of the Act and impugned assessment order. essential for disposing the issue sential for disposing the issue-in-dispute of invalidity of notice dispute of invalidity of notice issued u/s.148 are summarised as summarised as under:-
(i) The company M/s M/s Chandan Realtors Pvt. Ltd was incorporated was incorporated as a private limited company under the Companies Act, 1956 on as a private limited company under the Companies Act, 1956 on as a private limited company under the Companies Act, 1956 on 04/04/2001. But, t But, the company has been struck off by the he company has been struck off by the Registrar of Companies on 16/06/2017 by invoking his power Registrar of Companies on 16/06/2017 by invoking his power 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. u/s.248(1) r.w.s. 248(5) of the Companie s Act,2013.
(ii) Notice u/s.148 of the Act for reopening of the assessment has Notice u/s.148 of the Act for reopening of the assessment has Notice u/s.148 of the Act for reopening of the assessment has been issued by the Assessing Officer on 27/03/2018. been issued by the Assessing Officer on 27/03/2018. been issued by the Assessing Officer on 27/03/2018. Reopening of assessment was objected on behalf of the assessee, of assessment was objected n behalf of the assessee, stating that Assessee Company was struck off and dissolved a Assessee Company was struck off and dissolved and therefore, it
5 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd. was not in existence and hence, notice issued on non was not in existence and hence, notice issued on non was not in existence and hence, notice issued on non-existent or dead person was invalid. The ld. Assessing Officer dead person was invalid. The ld. Assessing Officer however rejected the objection of the assessee observing as under: rejected the objection of the assessee observing as under: rejected the objection of the assessee observing as under:-
“8. Assessee's name was struck off by Registrar of Comp Assessee's name was struck off by Registrar of Companies Assessee's name was struck off by Registrar of Comp on 16.06.2017 sue moto because the assessee did not comply on 16.06.2017 sue moto because the assessee did not comply on 16.06.2017 sue moto because the assessee did not comply with the provisions of Companies Act also. The assessee had with the provisions of Companies Act also. The assessee had with the provisions of Companies Act also. The assessee had not informed the ROC that assessment proceedings for AY not informed the ROC that assessment proceedings for AY not informed the ROC that assessment proceedings for AY 2010-2011 were in progress against him which could have 2011 were in progress against him which could have 2011 were in progress against him which could have resulted in continuation of the assessee company The assessee resulted in continu ation of the assessee company The assessee cannot deny the fact that it had deposited money in bank cannot deny the fact that it had deposited money in bank cannot deny the fact that it had deposited money in bank source of which was not explainable. The assessee was very source of which was not explainable. The assessee was very source of which was not explainable. The assessee was very well aware that this may result in demand against it. The ROC well aware that this may result in demand against it. The ROC well aware that this may result in demand against it. The ROC has struck off the assessee company under section 248 of the has struck off the assessee company under section 248 of the Companies Act 2013 without considering the fact that Companies Act 2013 without considering the fact that Companies Act 2013 without considering the fact that assessment assessment assessment proceedings proceedings proceedings are are are pending pending pending and and and demand demand demand is is is outstanding in assessee's case. The appeal against the struck outstanding in assessee's case. The appeal against the struck outstanding in assessee's case. The appeal against the struck of company can be filed under section 252 of the Companies of company can be filed under section 252 of the Companies of company can be filed under section 252 of the Companies Act and the assessee company can be revived upto 20 years the assessee company can be revived upto 20 years the assessee company can be revived upto 20 years as per due procedure of law. In this case, the unexplained as per due procedure of law. In this case, the unexplained as per due procedure of law. In this case, the unexplained bank deposit of Rs. 2.10 crores, if remained un-assessed will bank deposit of Rs. 2.10 crores, if remained un bank deposit of Rs. 2.10 crores, if remained un result in escapement of income and due revenue to the result in escapement of income and due revenue to the result in escapement of income and due revenue to the government.
As discussed As discussed above, it is a fact that (i) the assessee had made bank deposits, source of which is (i) the assessee had made bank deposits, source of which is (i) the assessee had made bank deposits, source of which is not explained by it in the A.Y 2010-2011 not explained by it in the A.Y 2010 (ii) It had entered into transaction of acquisition of property It had entered into transaction of acquisition of property It had entered into transaction of acquisition of property (iii) the above information was in possession of the assessing ) the above information was in possession of the assessing ) the above information was in possession of the assessing officer, on the basis of which he has icer, on the basis of which he has formed his reasons to formed his reasons to believe that the income has escaped assessment. believe that the income has escaped assessment believe that the income has escaped assessment (iv) the assessee was duly aware that it had made property the assessee was duly aware that it had made property the assessee was duly aware that it had made property transaction and made bank deposits and that the assessment transaction and made bank deposits and that the assessment transaction and made bank deposits and that the assessment
6 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd. proceedings are under progress against It. Despite these facts, proceedings are under progress ag ainst It. Despite these facts, if had not objected for struck of its name by ROC with a sole if had not objected for struck of its name by ROC with a sole if had not objected for struck of its name by ROC with a sole intention to avoid assessment proceedings. intention to avoid assessment proceedings 5. Before us, a revised Form No.36 revised Form No.36 has been filed has been filed modifying the name of the appellant as Shri S name of the appellant as Shri Subhash Jain, Director of Director of erstwhile Company namely M/s /s Chandan Realtors Pvt. Ltd . Ltd . The ld. Counsel Sh Kirit Sheth, appearing on behalf of , appearing on behalf of Sh Subhash Jain Sh Subhash Jain, submitted that present appeal might be decided on the basis of revised Form that present appeal might be decided on the basis of revised Form that present appeal might be decided on the basis of revised Form No.36 filed on 23/12/2022. He submitted that Section 253(1)(a) of No.36 filed on 23/12/2022. He submitted that Section 253(1)(a) No.36 filed on 23/12/2022. He submitted that Section 253(1)(a) the Act lays down lays down that any assessee aggrieved by that any assessee aggrieved by the order of ld.CIT(A) can appeal before (A) can appeal before the Tribunal. He further He further referred that the term 'assessee' ' has been defined in section 2 (7) of defined in section 2 (7) of the Act means a person by whom any tax or any other sum of money is means a person by whom any tax or any other sum of money is means a person by whom any tax or any other sum of money is payable under this Act. payable under this Act. He submitted that Section 179 of He submitted that Section 179 of Act lays down that any tax due from a private limited company can be down that any tax due from a private limited compa down that any tax due from a private limited compa recovered from its directors if it recovered from its directors if it cannot be recovered from the be recovered from the company. He submitted that b company. He submitted that by cumulatively applying tho y cumulatively applying those provisions in the present case, provisions in the present case, Shri Subhash Jain, who Subhash Jain, who could be called upon to pay the ta called upon to pay the tax dues of non-existent Chandan Rela existent Chandan Relators Pvt Ltd, therefore, he therefore, he is an assessee who is aggrieved by the o sessee who is aggrieved by the order u/s 250 dated 24/09/ /09/2019 passed by the ld.CIT (A) in the case of CIT (A) in the case of Chandan Realtors Pvt Realtors Pvt. Ltd.
5.1 He further referred to the decision of the Hon’ble He further referred to the decision of the Hon’ble He further referred to the decision of the Hon’ble Madras High Court in the case of Pandian Anbalagan Court in the case of Pandian Anbalagan vs. ITO in W.P.No.11841 of vs. ITO in W.P.No.11841 of 2022 & W.M.P No.11278 of 2022 dated 03/10/2023 and Hon'ble 2022 & W.M.P No.11278 of 2022 dated 03/10/2023 2022 & W.M.P No.11278 of 2022 dated 03/10/2023
7 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd.
Bombay High Court in the case of Jitendra Chandralal Navlani and Bombay High Court in the case of Jitendra Chandralal Navlani and Bombay High Court in the case of Jitendra Chandralal Navlani and Anr vs Union of India in W.P. No.1069 of 2016 dated 0 vs Union of India in W.P. No.1069 of 2016 dated 08/06/2016 vs Union of India in W.P. No.1069 of 2016 dated 0 wherein writ petitions writ petitions were filed by the erstwhile director of the filed by the erstwhile director of the companies after the company names companies after the company names were struck off by the were struck off by the Registrar from his records. from his records. The ld. Counsel therefore, submitted The ld. Counsel therefore, submitted that Shri Subhash Jain is also similarly placed i.e. Jain is also similarly placed i.e. Jain is also similarly placed i.e. it is an appeal by an erstwhile director of a non by an erstwhile director of a non-existent company and hence existent company and hence deserved to be entertained and adjudicated to be entertained and adjudicated.
5.2 The ld. Counsel submitted that in the case of The ld. Counsel submitted that in the case of The ld. Counsel submitted that in the case of Pandian Anbalagan vs. ITO (supra) and vs. ITO (supra) and Jitendra Chandralal Navlani and Anr Jitendra Chandralal Navlani and Anr vs Union of India (supra) the respective Hon’ble High Courts have (supra) the respective Hon’ble High Courts have (supra) the respective Hon’ble High Courts have categorically held that notice issued u/s.148 and order passed categorically held that notice issued u/s.148 and order passed categorically held that notice issued u/s.148 and order passed u/s.143(3) r.w.s. 147 in the name of a non u/s.143(3) r.w.s. 147 in the name of a non-existent company after existent company after its name is struck-off by the registrar from his records is invalid off by the registrar from his records is invalid off by the registrar from his records is invalid and unsustainable. The ld. Counsel attempted to distinguish the ustainable. The ld. Counsel attempted to distinguish the ustainable. The ld. Counsel attempted to distinguish the judgment of the Hon’ble Supreme Court in the case of CIT- Jaipur judgment of the Hon’ble Supreme Court in the case of judgment of the Hon’ble Supreme Court in the case of vs. Gopal Shri Scrips (P) Ltd. (supra) by way of submitting that in vs. Gopal Shri Scrips (P) Ltd. (supra) by way of submitting that in vs. Gopal Shri Scrips (P) Ltd. (supra) by way of submitting that in the said case the company name was struck off by the registrar o the company name was struck off by the registrar o the company name was struck off by the registrar on 07/04/2011 i.e. after the ITAT, Jaipur bench passed its order on 2011 i.e. after the ITAT, Jaipur bench passed its order on 2011 i.e. after the ITAT, Jaipur bench passed its order on 28/04/2000 and during the period when the matter was further 2000 and during the period when the matter was further 2000 and during the period when the matter was further agitated before the H agitated before the Hon'ble Rajasthan High Court and the on'ble Rajasthan High Court and the company was very much in existence at the time much in existence at the time of passing the assessment of passing the assessment order and therefore, the facts of the present the facts of the present case are totally different are totally different from the facts in the case of Gopal Shri Scripts Pvt Ltd (supra) from the facts in the case of Gopal Shri Scripts Pvt Ltd from the facts in the case of Gopal Shri Scripts Pvt Ltd
8 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd. hence, ratio laid down in that case cannot be applied in deciding ratio laid down in that case cannot be applied in deciding ratio laid down in that case cannot be applied in deciding the present appeal.
On the contrary, the ld. DR submitted that the company has not the contrary, the ld. DR submitted that the company has not the contrary, the ld. DR submitted that the company has not been liquidated and it is in existence even today been liquidated and it is in existence even today and and only it has been stricken off from the registrar of companies been stricken off from the registrar of companies , which could be restored back either either on an appeal by any aggrieved person any aggrieved person within a period of three years period of three years before the National Company Law Tribunal ational Company Law Tribunal (NCLT) u/s.255(1) of the Companies Act (1) of the Companies Act, 2013 or on an application on an application by any of its member, creditor or workmen by any of its member, creditor or workmen u/s 255(3 u/s 255(3) of Companies Act, 2013, within the period of 20 years from the date of within the period of 20 years from the date of publication within the period of 20 years from the date of of notice u/s.248(5) for the restoration of the name of the company. for the restoration of the name of the company. for the restoration of the name of the company. The ld. DR submits that if according to the assessee the company The ld. DR submits that if according to the assessee the company The ld. DR submits that if according to the assessee the company was non-existent, then the company existent, then the company can’t give any authority to any any authority to any one for representing either before the ld. one for representing either before the ld. Assessing Officer or before Assessing Officer or before the appellate authorities and only the alternative which was the appellate authorities and only the alternative which w the appellate authorities and only the alternative which w available with the member of available with the member of the company or the director of the the company or the director of the company was to take action in terms of Section company was to take action in terms of Section 252(1 252(1) or 252(3) of the companies Act, 2013, , 2013, for restoration of the name of the ation of the name of the company in the registrar of companies. The ld. DR further submits company in the registrar of companies. The ld. DR further submits company in the registrar of companies. The ld. DR further submits that in view of the decision of the Hon’ble Supreme Court in the that in view of the decision of the Hon’ble Supreme Court in the that in view of the decision of the Hon’ble Supreme Court in the case of Gopal Shri Scrips (P) Ltd case of Gopal Shri Scrips (P) Ltd (supra), despite the status of the despite the status of the company being stricken off company being stricken off from the registrar of the companies, in from the registrar of the companies, in view of exception under section 250 of Companies Act, 2013 for view of exception under section 250 of Companies Act, 2013 for view of exception under section 250 of Companies Act, 2013 for discharging of any liability or obligations of the company, certificate discharging of any liability or obligations of the company, certificate discharging of any liability or obligations of the company, certificate
9 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd. of incorporation of the company was valid. of incorporation of the company was valid. The ld. DR submits that The ld. DR submits that said section 250 of Companies Act, 2013 250 of Companies Act, 2013 give authority to the give authority to the Income Tax department Income Tax department for issue of notice even even on company stricken off from the registrar of companies stricken off from the registrar of companies and assessee cannot and assessee cannot take shelter of said provisions take shelter of said provisions. According to him ccording to him, though the company was struck of company was struck off from the registrar of the companies, its f from the registrar of the companies, its asset and liabilities were lying with the company and bank asset and liabilities were lying with the company and bank asset and liabilities were lying with the company and bank accounts were alive. Thus, the ld. Assessing Officer is within his accounts were alive. Thus, the ld. Assessing Officer is within his accounts were alive. Thus, the ld. Assessing Officer is within his powers to issue notice u/s.148 and complete the assessment on the powers to issue notice u/s.148 and complete the assessment on the powers to issue notice u/s.148 and complete the assessment on the assessee company unde under exception provided in section 250 of r exception provided in section 250 of Companies Act, 2013 Companies Act, 2013.
We have heard rival submissions and perused the relevant 7. We have heard rival submissions and perused the relevant 7. We have heard rival submissions and perused the relevant material on record. In the case material on record. In the case before us first issue first issue is whether the appeal filed on behalf of the company is maintainable or not. The ld appeal filed on behalf of the company is maintainable or not. The l appeal filed on behalf of the company is maintainable or not. The l Counsel for the assessee Counsel for the assessee submitted that on earlier occasion on submitted that on earlier occasion on being questioned on on the maintainability of appeal, the form No. 36 the maintainability of appeal, the form No. 36 has been revised in the name of Director of the company and has been revised in the name of Director of the company and 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 claimed that he is entitled to file appeal on behalf of the stru claimed that he is entitled to file appeal on behalf of the stru company in view of provis company in view of provisions of section 179 of the Act as ions of section 179 of the Act as he is liable for paying the demand raised in the case of struck off liable for paying the demand raised in the case of struck off liable for paying the demand raised in the case of struck off company, and therefore fore he should be considered as assessee for the he should be considered as assessee for the purpose of filing of appeal. However, we find that section 250 of the purpose of filing of appeal. However, we find that sect purpose of filing of appeal. However, we find that sect Companies Act, 2013 has made it clear that the company shall not Act, 2013 has made it clear that the company shall not Act, 2013 has made it clear that the company shall not be deemed as dissolved be deemed as dissolved and certificate of incorporation shall be certificate of incorporation shall be 10 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd.
continued for the purpose of discharge of the liabilities or obligation continued for the purpose of discharge of the liabilities continued for the purpose of discharge of the liabilities of the Company. For ready reference, For ready reference, the section section 250 of the Companies Act, 2013 is reproduced as under: , 2013 is reproduced as under:
“250. Effect of company notified as dissolved.
Effect of company notified as dissolved.— Where a company Where a company stands dissolved under section 248, it shall on and from the date mentioned stands dissolved under section 248, it shall on and from the date mentioned stands dissolved under section 248, it shall on and from the date mentioned in the notice under sub in the notice under sub-section (5) of that section cease to operate as a cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to company and the Certificate of Incorporation issued to it shall be deemed to 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 have been cancelled from such date except for the purpose of realising the 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 amount due to the company and for the payment or discharge of the amount due to the company and for the payment or discharge of the liabilities or obligations of the company. obligations of the company.” 7.1 Since filing of appeal Since filing of appeal in tax dispute before the ITAT in tax dispute before the ITAT is a liability or obligation of the liability or obligation of the assessee Company, there therefore, in view of unambiguous and clear provisions of section 250 of Companies Act, unambiguous and clear provisions of section 250 of Companies Act, unambiguous and clear provisions of section 250 of Companies Act, 2013, it is not deemed to b it is not deemed to be dissolved or the certification of e dissolved or the certification of incorporation is not incorporation is not cancelled to that extent, thus, in such , in such a case an appeal filed on behalf of appeal filed on behalf of the company is maintainable. We find company is maintainable. We find that Coordinate Bench of the Tribunal in the case of Dwarka that Coordinate Bench of the Tribunal in the case of that Coordinate Bench of the Tribunal in the case of Porfolio P Ltd in P Ltd in ITA No. 2563/Del/2017 has in similar has in similar circumstances held the appeal filed on behalf of the company as circumstances held the appeal filed on behalf of the company as circumstances held the appeal filed on behalf of the company as maintainable. The relevant finding of the Tribunal (supra) is maintainable. The relevant finding of the Tribunal (supra) is maintainable. The relevant finding of the Tribunal (supra) is reproduced as under: reproduced as under:
13. When it comes to recovery of tax due from the struck off Company, 13. When it comes to recovery of tax due from the struck off Company, 13. When it comes to recovery of tax due from the struck off Company, the Department of Revenue has power either to invoke Section 226(3) of the Department of Revenue has power either to invoke Section 226(3) of the Department of Revenue has power either to invoke Section 226(3) of the Income Tax Act or can invoke Section 179 of the Income Tax Act and the Income Tax Act or can invoke Section 179 of the Income Tax Act and the Income Tax Act or can invoke Section 179 of the Income Tax Act and recover from the Directors after testing whe recover from the Directors after testing whether non recovery is attributed ther non recovery is attributed to any gross neglect misfeasance or breach of duty on the part of to any gross neglect misfeasance or breach of duty on the part of to any gross neglect misfeasance or breach of duty on the part of Directors. The Department can also invoke both 226(3) and 179 Directors. The Department can also invoke both 226(3) and 179 Directors. The Department can also invoke both 226(3) and 179 simultaneously for which there is no bar. simultaneously for which there is no bar.
14. Now, the moot question arises as to ‘whether the 14. Now, the moot question arises as to ‘whether the 14. Now, the moot question arises as to ‘whether the Tribunal can proceed with the appeal filed by the struck down Company or filed by the proceed with the appeal filed by the struck down Company or filed by the proceed with the appeal filed by the struck down Company or filed by the Revenue against the struck off Company ?’. In other words, whether the Revenue against the struck off Company ?’. In other words, whether the Revenue against the struck off Company ?’. In other words, whether the struck off Company can be treated as alive/operative/existing for the struck off Company can be treated as alive/operative/existing for the struck off Company can be treated as alive/operative/existing for the 11 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd.
purpose of adjudication of th purpose of adjudication of the tax arrears and the consequence order by e tax arrears and the consequence order by which the recovery proceedings are triggered by the Revenue. which the recovery proceedings are triggered by the Revenue. which the recovery proceedings are triggered by the Revenue.
15. If the proceedings pending before the Court or the Tribunal (regarding 15. If the proceedings pending before the Court or the Tribunal (regarding 15. If the proceedings pending before the Court or the Tribunal (regarding determination of quantum the tax/liability of paying the tax) is dismissed determination of quantum the tax/liability of paying the tax) is dismissed determination of quantum the tax/liability of paying the tax) is dismissed for having become in or having become in-fructuous without adjudicating the actual tax dues fructuous without adjudicating the actual tax dues or the liability of the assessee to pay such tax in the manner known to or the liability of the assessee to pay such tax in the manner known to 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 the Law and based on the such dismissal of the proceedings, if the the Law and based on the such dismissal of the proceedings, if the Revenue proceeds for the recovery of the ‘such Revenue proceeds for the recovery of the ‘such tax due’, the rights of the tax due’, the rights of the Directors of the Company will be seriously jeopardy and the same will Directors of the Company will be seriously jeopardy and the same will Directors of the Company will be seriously jeopardy and the same will amount to denial of the rights guaranteed under the Law. amount to denial of the rights guaranteed under the Law.
In the instant Appeal, if we allow the request of the Revenue dismiss 16. In the instant Appeal, if we allow the request of the Revenue dismiss 16. In the instant Appeal, if we allow the request of the Revenue dismiss the Appeal as in the Appeal as in-fructuous, one hand the appeal will be dismissed having , one hand the appeal will be dismissed having become in-fructuous on the other hand, the Revenue Department will fructuous on the other hand, the Revenue Department will fructuous on the other hand, the Revenue Department will initiate proceedings under Section 179 of the Income Tax Act and that too initiate proceedings under Section 179 of the Income Tax Act and that too initiate proceedings under Section 179 of the Income Tax Act and that too without even adjudicating in the manner prescribed under Law on the without even adjudicating in the manner prescribed under Law on the 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 ‘quantum of actual tax due’ or ‘liability to pay tax’, in such even great in ‘quantum of actual tax due’ or ‘liability to pay tax’, in such even great in justice will be caused, which cannot be permitted. justice will be caused, which cannot be permitted.
17. When the Revenue Department has not forgone the right to recover 17. When the Revenue Department has not forgone the right to recover 17. When the Revenue Department has not forgone the right to recover tax due or Written tax due or Written-off the demand on the ground of Company off the demand on the ground of Company being struck off by the ROC, the right of the assessee to determine the tax struck off by the ROC, the right of the assessee to determine the tax 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 liability in due process of law cannot be denied by dismissing the Appeal liability in due process of law cannot be denied by dismissing the Appeal pending before us. pending before us.
Further, in a case where the CIT(A) deletes the addition made by the 18. Further, in a case where the CIT(A) deletes the addition made by the 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 evenue files Appeal before the Tribunal, even in a case where evenue files Appeal before the Tribunal, even in a case where the Revenue is having a water tight case on merit, by dismissing the the Revenue is having a water tight case on merit, by dismissing the the Revenue is having a water tight case on merit, by dismissing the Appeal for having become in Appeal for having become in-fructuous will also result in non adjudication fructuous will also result in non adjudication of the actual tax due by the assessee and the Reve of the actual tax due by the assessee and the Revenue cannot recover the nue cannot recover the actual tax dues from the assessee. In such events, the Department of actual tax dues from the assessee. In such events, the Department of 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 Revenue will be left with no remedy, which is contrary to the root 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 principal of law ‘Ubi Jus Ibi Remedium’.
19. The Hon’ble Apex Court principal of law ‘Ubi Jus Ibi Remedium’.
The Hon’ble Apex Court while dealing with amalgamate while dealing with amalgamated Companies in the case of Pr. d Companies in the case of Pr. Commissioner of Income Tax Vs. Mahagun Realtors Pvt. Ltd., held that, Commissioner of Income Tax Vs. Mahagun Realtors Pvt. Ltd., held that, Commissioner of Income Tax Vs. Mahagun Realtors Pvt. Ltd., held that, ‘whether corporate death of an entity upon amalgamation per se ‘whether corporate death of an entity upon amalgamation per se ‘whether corporate death of an entity upon amalgamation per se invalidates a tax assessment order ordinarily cannot be determined on a invalidates a tax assessment order ordinarily cannot be determined on a invalidates a tax assessment order ordinarily cannot be determined on a bare application of bare application of Section 481 of the Companies Act, 1956 (and its Section 481 of the Companies Act, 1956 (and its equivalent in the 2013 Act), but would depend on the terms of the equivalent in the 2013 Act), but would depend on the terms of the equivalent in the 2013 Act), but would depend on the terms of the amalgamation and the facts of each case. Further it restored the matter amalgamation and the facts of each case. Further it restored the matter amalgamation and the facts of each case. Further it restored the matter to the file of the ITAT and directed to decide the matter on merit. Th to the file of the ITAT and directed to decide the matter on merit. Th to the file of the ITAT and directed to decide the matter on merit. The relevant portion is as under: relevant portion is as under:- “42. Before concluding, this Court notes and holds that whether “42. Before concluding, this Court notes and holds that whether “42. Before concluding, this Court notes and holds that whether corporate death of an entity upon amalgamation per se corporate death of an entity upon amalgamation per se corporate death of an entity upon amalgamation per se invalidates an assessment order ordinarily cannot be determined invalidates an assessment order ordinarily cannot be determined invalidates an assessment order ordinarily cannot be determined on a bare application of Section 481 of t on a bare application of Section 481 of the Companies Act, 1956 he Companies Act, 1956 (and its equivalent in the 2013 Act), but would depend on the (and its equivalent in the 2013 Act), but would depend on the (and its equivalent in the 2013 Act), but would depend on the terms of the amalgamation and the facts of each case. terms of the amalgamation and the facts of each case. terms of the amalgamation and the facts of each case.
12 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd.
In view of the foregoing discussion and having regard to the 43. In view of the foregoing discussion and having regard to the 43. In view of the foregoing discussion and having regard to the facts of this case, this court is of the considered facts of this case, this court is of the considered view, that the view, that the impugned order of the High Court cannot be sustained; it is set impugned order of the High Court cannot be sustained; it is set impugned order of the High Court cannot be sustained; it is set aside. Since the appeal of the revenue against the order of the CIT aside. Since the appeal of the revenue against the order of the CIT aside. Since the appeal of the revenue against the order of the CIT was not heard on merits, the matter is restored to the file of ITAT, was not heard on merits, the matter is restored to the file of ITAT, was not heard on merits, the matter is restored to the file of ITAT, which shall proceed to hear the parties which shall proceed to hear the parties on the merits of the on the merits of the appealas well as the cross objections, on issues, other than the appealas well as the cross objections, on issues, other than the appealas well as the cross objections, on issues, other than the nullity of the assessment order, on merits. The appeal is allowed, nullity of the assessment order, on merits. The appeal is allowed, nullity of the assessment order, on merits. The appeal is allowed, in the above terms, without order on costs.” in the above terms, without order on costs.” (emphasis supplied) (emphasis supplied) 20. The Hon’ble High Court of Judica 20. The Hon’ble High Court of Judicature for Rajasthan in the case of ture for Rajasthan in the case of Commissioner of Income Tax Vs. Gopal Shri Scrips Pvt. Ltd. in of Income Tax Vs. Gopal Shri Scrips Pvt. Ltd. in ITA No. Commissioner of Income Tax Vs. Gopal Shri Scrips Pvt. Ltd. in ITA No. 53/2000 vide order dated 09/08/2016 dismissed the appeal filed by the 53/2000 vide order dated 09/08/2016 dismissed the appeal filed by the 53/2000 vide order dated 09/08/2016 dismissed the appeal filed by the Revenue for having become in Revenue for having become in-fructuous since the Company had been fructuous since the Company had been struck off from struck off from the register of ROC and the said Company dissolved. The the register of ROC and the said Company dissolved. The operative portion of the Hon’ble High Court is as under: operative portion of the Hon’ble High Court is as under:- “On the last date of hearing when the matter came up before the “On the last date of hearing when the matter came up before the “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 Court on 05.07.2016, counsel for the appellant was directed to Court on 05.07.2016, counsel for the appellant was directed to seek instructi seek instructions about the present status of the Respondent ons about the present status of the Respondent assessee (Company) whether it is in existence or has become non assessee (Company) whether it is in existence or has become non assessee (Company) whether it is in existence or has become non operational or defunct by passage of time. operational or defunct by passage of time. Sh. Anuroop Singhi, Adv., appearing for the appellant has placed Sh. Anuroop Singhi, Adv., appearing for the appellant has placed Sh. Anuroop Singhi, Adv., appearing for the appellant has placed for our perusal a communication issue for our perusal a communication issued from the office of d from the office of Registrar of Companies dated 07.04.2011 indicating that Registrar of Companies dated 07.04.2011 indicating that Registrar of Companies dated 07.04.2011 indicating that pursuant to subsection( 5) of Section 560 of the Companies Act, pursuant to subsection( 5) of Section 560 of the Companies Act, pursuant to subsection( 5) of Section 560 of the Companies Act, 1956 the name of Gopal Shri Scrips Pvt. Ltd., has been struck off 1956 the name of Gopal Shri Scrips Pvt. Ltd., has been struck off 1956 the name of Gopal Shri Scrips Pvt. Ltd., has been struck off from the register and the said company is dissolv from the register and the said company is dissolved. In the light of ed. In the light of the communication placed for our perusal dated 07.04.2011, no the communication placed for our perusal dated 07.04.2011, no the communication placed for our perusal dated 07.04.2011, no purpose is going to be served in examining the substantial purpose is going to be served in examining the substantial purpose is going to be served in examining the substantial question of law which has been raised for consideration in the question of law which has been raised for consideration in the question of law which has been raised for consideration in the instant appeal and on account of these change in cir instant appeal and on account of these change in cir instant appeal and on account of these change in circumstances, the present appeal has become infructuous and accordingly the present appeal has become infructuous and accordingly the present appeal has become infructuous and accordingly stands dismissed. However, the appellant is still at liberty to file stands dismissed. However, the appellant is still at liberty to file stands dismissed. However, the appellant is still at liberty to file application if any occasion arises in future.” application if any occasion arises in future.” 21. The said order of Hon’ble High Court of Judicature for Rajasthan 21. The said order of Hon’ble High Court of Judicature for Rajasthan 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 ated 09/08/2016 in ITA No. 53/2000 has been challenged by the ated 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 Revenue Department before the Hon’ble Supreme court of India in Civil 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 Appeal No. 2922/2019 (CIT Jaipur Vs. M/s. Gopal Scrips Pvt. Ltd.). The 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 t Hon’ble Apex Court vide order dated 12/03/2019 held t Hon’ble Apex Court vide order dated 12/03/2019 held that, the High Court was wrong in dismissing the appeal as having rendered Court was wrong in dismissing the appeal as having rendered Court was wrong in dismissing the appeal as having rendered infructuous and further directed to decide the appeal afresh on merit in infructuous and further directed to decide the appeal afresh on merit in infructuous and further directed to decide the appeal afresh on merit in accordance with law in view of the relevant provisions of Companies Act accordance with law in view of the relevant provisions of Companies Act accordance with law in view of the relevant provisions of Companies Act and Income Tax Act. The relevant port and Income Tax Act. The relevant portions are hereunder: “9. Having heard the learned counsel for the appellant (Income “9. Having heard the learned counsel for the appellant (Income “9. Having heard the learned counsel for the appellant (Income Tax Department) and on perusal of the record of the case, we are Tax Department) and on perusal of the record of the case, we are Tax Department) and on perusal of the record of the case, we are constrained to allow the appeal, set aside the impugned order constrained to allow the appeal, set aside the impugned order constrained to allow the appeal, set aside the impugned order
13 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd. and remand the case to the High Court for dec and remand the case to the High Court for deciding the appeal iding the appeal afresh on merits in accordance with law. afresh on merits in accordance with law.
10. Mere perusal of the impugned order quoted supra would go to 10. Mere perusal of the impugned order quoted supra would go to 10. Mere perusal of the impugned order quoted supra would go to show that the High Court dismissed the appeal on the ground show that the High Court dismissed the appeal on the ground show that the High Court dismissed the appeal on the ground that it has rendered infructuous because it was brought to its that it has rendered infructuous because it was brought to its that it has rendered infructuous because it was brought to its notice that notice that the name of the company the respondent assessee has the name of the company the respondent assessee has been struck off from the Register of the Company under Section been struck off from the Register of the Company under Section been struck off from the Register of the Company under Section 560(5) of the Companies Act, 1956. 560(5) of the Companies Act, 1956.
In other words, the High Court was of the view that since the 11. In other words, the High Court was of the view that since the 11. In other words, the High Court was of the view that since the respondent respondent Company stands dissolved as a result of the order a result of the order passed by the Registrar of the Companies under Section 560 (5) passed by the Registrar of the Companies under Section 560 (5) passed by the Registrar of the Companies under Section 560 (5) of the Companies Act, the appeal filed against such Company of the Companies Act, the appeal filed against such Company of the Companies Act, the appeal filed against such Company which stands dissolved does not survive for its consideration on which stands dissolved does not survive for its consideration on which stands dissolved does not survive for its consideration on merits. merits.
In our view, the High Court was 12. In our view, the High Court was wrong in dismissing the wrong in dismissing the appeal as having rendered infructuous. appeal as having rendered infructuous.
The High Court failed to notice Section 560(5) proviso (a) of the 13. The High Court failed to notice Section 560(5) proviso (a) of the 13. The High Court failed to notice Section 560(5) proviso (a) of the Companies Act and further failed to notice Chapter XV of the Companies Act and further failed to notice Chapter XV of the Companies Act and further failed to notice Chapter XV of the Income Tax Act which deals with "liability in special cases" Income Tax Act which deals with "liability in special cases" Income Tax Act which deals with "liability in special cases" and its clause (L) which deals with "discontinuance of business or its clause (L) which deals with "discontinuance of business or its clause (L) which deals with "discontinuance of business or dissolution". dissolution".
The aforementioned two provisions, namely, one under the 14. The aforementioned two provisions, namely, one under the 14. The aforementioned two provisions, namely, one under the Companies Act and the other under the Income Tax Act Companies Act and the other under the Income Tax Act Companies Act and the other under the Income Tax Act specifically deal with the cases of the Companies, whose nam specifically deal with the cases of the Companies, whose nam specifically deal with the cases of the Companies, whose name has been struck off under Section 560 (5) of the Companies Act. has been struck off under Section 560 (5) of the Companies Act. has been struck off under Section 560 (5) of the Companies Act.
These provisions provide as to how and in what manner the 15. These provisions provide as to how and in what manner the 15. These provisions provide as to how and in what manner the liability against such Company arising under the Companies Act liability against such Company arising under the Companies Act liability against such Company arising under the Companies Act and under the Income Tax Act is required to be dealt with. and under the Income Tax Act is required to be dealt with. and under the Income Tax Act is required to be dealt with.
16. Since the High Court did not decide the appeal keeping in ince the High Court did not decide the appeal keeping in ince the High Court did not decide the appeal keeping in view the aforementioned two relevant provisions, the impugned view the aforementioned two relevant provisions, the impugned view the aforementioned two relevant provisions, the impugned order is not legally sustainable and has to be set aside. order is not legally sustainable and has to be set aside. order is not legally sustainable and has to be set aside.
In view of the foregoing discussion, the appeal succeeds and 17. In view of the foregoing discussion, the appeal succeeds and 17. In view of the foregoing discussion, the appeal succeeds and is accordingl is accordingly allowed. The impugned order is set aside. The case y allowed. The impugned order is set aside. The case is remanded to the High Court for deciding the appeal afresh on is remanded to the High Court for deciding the appeal afresh on is remanded to the High Court for deciding the appeal afresh on merits in accordance with law keeping in view the relevant merits in accordance with law keeping in view the relevant merits in accordance with law keeping in view the relevant provisions of Companies Act and the Income tax Act uninfluenced provisions of Companies Act and the Income tax Act uninfluenced provisions of Companies Act and the Income tax Act uninfluenced by any observati by any observations made by us on merits.
The Hon’ble Supreme Court in the case of M/s. Gopal Scrips Pvt. Ltd 22. The Hon’ble Supreme Court in the case of M/s. Gopal Scrips Pvt. Ltd 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 (supra) while allowing the Civil Appeal of the Revenue, dealt and relied (supra) while allowing the Civil Appeal of the Revenue, dealt and relied on Section 560(5) of the Companies Act, 1956 and held that the Appeal on Section 560(5) of the Companies Act, 1956 and held that the Appeal on Section 560(5) of the Companies Act, 1956 and held that the Appeal filed by the Revenue is maintainable. The filed by the Revenue is maintainable. The identical provisions have been identical provisions have been introduced in the Companies Act, 2013 in Sub introduced in the Companies Act, 2013 in Sub-Section sub Section sub-Sections (6) and (7) of Section 248 of the Companies Act. Therefore, the ratio laid and (7) of Section 248 of the Companies Act. Therefore, the ratio laid and (7) of Section 248 of the Companies Act. Therefore, the ratio laid
14 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd. down in the case of Gopal Scrips Pvt. Ltd (supra) is squarely applicable to down in the case of Gopal Scrips Pvt. Ltd (supra) is squarely applicable to down in the case of Gopal Scrips Pvt. Ltd (supra) is squarely applicable to the issue in hand. ue in hand.
In the case of M/s. Gopal Scrips Pvt. Ltd (supra), the Department of 23. In the case of M/s. Gopal Scrips Pvt. Ltd (supra), the Department of 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 Revenue was having grievance on the Order of the Hon’ble High Court 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 Judicature for Rajasthan in dismissing the Appeal (ITA) for having Judicature for Rajasthan in dismissing the Appeal (ITA) for having become in fructuous on the groun become in fructuous on the ground that the Assessee company was d that the Assessee company was struck off. The Hon’ble Supreme Court has set aside the Order of the struck off. The Hon’ble Supreme Court has set aside the Order of the 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 Hon’ble High Court of Judicature for Rajasthan and directed to decide 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 Appeal on merit. Ironically now the very same Department of revenue is Appeal on merit. Ironically now the very same Department of revenue is seeking before us to dismiss the present Appeal as in fore us to dismiss the present Appeal as in-fructuous since the fructuous since the assessee company has been struck off. The Department cannot have assessee company has been struck off. The Department cannot have assessee company has been struck off. The Department cannot have such double standard. such double standard.” 7.2 Further, as regards to t Further, as regards to the contention of the assessee that he contention of the assessee that Hon’ble High Court of Bombay and Madras Hon’ble High Court of Bombay and Madras has admitted the writ has admitted the writ petition filed by the Director on behalf of respective companies, so petition filed by the Director on behalf of respective companies, so petition filed by the Director on behalf of respective companies, so revised form no. 36 filed by t revised form no. 36 filed by the Director should be admitted, w he Director should be admitted, we don’t agree for the reason that don’t agree for the reason that firstly, the Tribunal does the Tribunal does not have power of writ jurisdiction and p power of writ jurisdiction and power to entertain appeal are ower to entertain appeal are exercised as provided under section 253 the Act. Under section exercised as provided under section 253 the Act. exercised as provided under section 253 the Act. 253(1) of the Act, it is the assessee , it is the assessee only, who can prefer appeal who can prefer appeal before the Tribunal against the orders of Income- -tax Authorities listed therein. Secondly Secondly, the assessee claimed that t essee claimed that the director is assesses for the purpose of filing appeal by dissolved company assesses for the purpose of filing appeal by dissolved company assesses for the purpose of filing appeal by dissolved company because he is liable for paying demand in view of section 179 of the because he is liable for paying demand in view of section 179 of the because he is liable for paying demand in view of section 179 of the Act, but we find that that director has not shown any documentary any documentary evidence before us before us indicating that department has initialed any that department has initialed any recovery proceedings against the director under section 179 of the recovery proceedings against the director under section 179 of the recovery proceedings against the director under section 179 of the Act, so till then director can’t claim to be an assessee for the Act, so till then director can’t claim to be an assessee for the Act, so till then director can’t claim to be an assessee for the purpose of proceedings against the company under the Act. purpose of proceedings against the company under the Act. purpose of proceedings against the company under the Act. Therefore, the revised form No. 36 filed by the Director is ed form No. 36 filed by the Director is treated as ed form No. 36 filed by the Director is 15 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd.
infructuous and rejected. The infructuous and rejected. The appeal filed in original form no. 36 appeal filed in original form no. 36 was held to be maintainable and hence taken was held to be maintainable and hence taken up for adjudication. for adjudication.
7.3 The main legal legal issue raised in ground No. 1 of the appeal raised in ground No. 1 of the appeal is whether notice u/s.148 of the Act could be issued on the company tice u/s.148 of the Act could be issued on the company tice u/s.148 of the Act could be issued on the company which was struck off from the records of the registrar of the which was struck off from the records of the registrar of the which was struck off from the records of the registrar of the companies. Under the provisions of Section 248(1) of the companies Under the provisions of Section 248(1) of the companies Under the provisions of Section 248(1) of the companies Act, 2013, the registrar can the registrar can strike off or remove the name of the off or remove the name of the company from the registrar of companies y from the registrar of companies. Under section . Under section 248(2), the company may file an application for removing the name from the company may file an application for removing the name from the company may file an application for removing the name from the registrar of companies in case of certain situation registrar of companies in case of certain situations s. The registrar, after following the due process provided u/s.248(5) of the Act, is after following the due process provided u/s.248(5) of the Act after following the due process provided u/s.248(5) of the Act authorized to strike of authorized to strike off name of company from the registrar of from the registrar of companies. The Section 248(7) however provided that the liability if companies. The Section 248(7) however provided that the liability if companies. The Section 248(7) however provided that the liability if any of any director or manager or any other officer who were any of any director or manager or any other officer who were any of any director or manager or any other officer who were exercising any power of management and any member of the exercising any power of management and any member of the exercising any power of management and any member of the company dissolved in subsection 5 may be enforced as mpany dissolved in subsection 5 may be enforced as if the mpany dissolved in subsection 5 may be enforced as company has not bee company has not been dissolved. Further Section 250 of n dissolved. Further Section 250 of Companies Act, 2013 prescribe that when a company is dissolved under 248 , prescribe that when a company is dissolved under 248 , prescribe that when a company is dissolved under 248 , then it cease to operate and certificate of Incorporation shall be then it cease to operate and certificate of Incorporation shall be then it cease to operate and certificate of Incorporation shall be deemed to have been cancelled except deemed to have been cancelled except firstly, for the purpose of , for the purpose of realizing the amount due to the company and for payment or realizing the amount due to the company and for payment or realizing the amount due to the company and for payment or secondly, for discharge of the liabilities or obligation of the for discharge of the liabilities or obligation of the for discharge of the liabilities or obligation of the company. The section 252(1) The section 252(1) gives an option to the company for gives an option to the company for restoration of the name the name in the registrar of companies. Similarly, the registrar of companies. Similarly,
16 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd.
Section 252(3) provides for restoration of the name of the by any Section 252(3) provides for restoration of the name of the by any Section 252(3) provides for restoration of the name of the by any member or creditor or workmen thereof r or creditor or workmen thereof.
In the instant case before us, the issue in dispute is whether In the instant case before us, the issue in dispute is whether In the instant case before us, the issue in dispute is whether the notice issued u/s.148 of the Act in the case of the company the notice issued u/s.148 of the Act in the case of the company the notice issued u/s.148 of the Act in the case of the company which has been received by the director of the company is invalid. which has been received by the director of the company is invalid. which has been received by the director of the company is invalid. In our opinion, under th In our opinion, under the provision of Section 248(7) of the Act the e provision of Section 248(7) of the Act the liability of the director in respect of the company though it was liability of the director in respect of the company though it was liability of the director in respect of the company though it was dissolved was continued even though the company was dissolved dissolved was continued even though the company was dissolved dissolved was continued even though the company was dissolved under the provisions of Section 248(5) of the Act. Further, the under the provisions of Section 248(5) of the Act. under the provisions of Section 248(5) of the Act. section 250 of the Companies Act, 2013 has made it clear that the Companies Act, 2013 has made it clear that the Companies Act, 2013 has made it clear that the company shall not be deemed as dissolved or certificate of company shall not be deemed as dissolved or certificate of company shall not be deemed as dissolved or certificate of incorporation shall be continued for the purpose of discharge of the incorporation shall be continued for the purpose of discharge of the incorporation shall be continued for the purpose of discharge of the liabilities or obligation of the Company. Since responding to the liabilities or obligation of the Company. Since responding to the liabilities or obligation of the Company. Since responding to the notice issued by the Income y the Income-tax Department is a statutory liability tax Department is a statutory liability or obligation of the Company or obligation of the Company, therefore it is not deemed to be is not deemed to be dissolved or the certification of incorporation is not dissolved or the certification of incorporation is not cancelled to cancelled to that extent, therefore, in such case the notice issued also stands validly extent, therefore, in such case the notice issued also stands valid extent, therefore, in such case the notice issued also stands valid issued.
8.1 The Hon’ble Supreme Court in the case of Gopal Shri Scrips The Hon’ble Supreme Court in the case of Gopal Shri Scrips The Hon’ble Supreme Court in the case of Gopal Shri Scrips (P) Ltd has made this legal position clear which has been further (P) Ltd has made this legal position clear which has been further (P) Ltd has made this legal position clear which has been further explained by the Tribunal in the case of Dwaraka Portfolia Pvt. Ltd. explained by the Tribunal in the case of Dwaraka Portfolia Pvt. Ltd. explained by the Tribunal in the case of Dwaraka Portfolia Pvt. Ltd. vs. ACIT-CC 29 in for A.Y CC 29 in ITA No.2563/Del/2017 for A.Y.2014 .2014-15. In the decisions of Hon’ble Bombay, relied upon by the assessee, the decisions of Hon’ble Bombay, relied upon by the assessee, the decisions of Hon’ble Bombay, relied upon by the assessee, the section 560 of the Companies Act, 1956 was in operation, but now section 560 of the Companies Act, 1956 was in operation, but now section 560 of the Companies Act, 1956 was in operation, but now
17 M/s. Chandan Realtors Pvt. Ltd. M/s. Chandan Realtors Pvt. Ltd. in view of clear provision of section 250 of the Companies Act, 2013, in view of clear provision of section 250 of the Companies Act, 201 in view of clear provision of section 250 of the Companies Act, 201 which has been explained by has been explained by the Tribunal in the case of Dwaraka the Tribunal in the case of Dwaraka Portfolia Pvt. Ltd. (supra) after following the ratio in the case of Portfolia Pvt. Ltd. (supra) after following the ratio in the case of Portfolia Pvt. Ltd. (supra) after following the ratio in the case of Gopal Shri Scrips (P) Ltd (supra), therefore ,r Gopal Shri Scrips (P) Ltd (supra), therefore ,respectfully following espectfully following the above decisions, we reject the contention of the ld. Counsel for the above decisions, we reject the contention of the ld. Counsel for the above decisions, we reject the contention of the ld. Counsel for the assessee challenging the validity of notice u/s.148 of the Act. challenging the validity of notice u/s.148 of the Act. challenging the validity of notice u/s.148 of the Act. The ground No.1 in the appeal of the assessee is accordingly The ground No.1 in the appeal of the assessee is accordingly The ground No.1 in the appeal of the assessee is accordingly dismissed.
9. As far as grounds on merits are concerned, we find that no As far as grounds on merits are concerned, we find that no As far as grounds on merits are concerned, we find that no explanation in respect of deposits in the bank statement is either explanation in respect of deposits in the bank statement is either explanation in respect of deposits in the bank statement is either furnished before the lower authorities or furnished before the lower authorities or before us and therefore, we before us and therefore, we uphold the finding of the ld. CIT(A) on the issue in dispute. The ld the finding of the ld. CIT(A) on the issue in dispute. The ld the finding of the ld. CIT(A) on the issue in dispute. The ground No.2 of the appeal is also dismissed. ground No.2 of the appeal is also dismissed.
9.1 Before parting, we may like to express that either the director Before parting, we may like to express that either the director Before parting, we may like to express that either the director or the member of the company or the Income Tax department as a e member of the company or the Income Tax department as a e member of the company or the Income Tax department as a creditor can move before the National Company Law Tribunal for creditor can move before the National Company Law Tribunal for creditor can move before the National Company Law Tribunal for restoration of the name of the company also restoration of the name of the company also under provisions of under provisions of section 252 of the companies Act, 2013 section 252 of the companies Act, 2013, if so advised , if so advised.
In the result, appeal of the assessee is dismissed. lt, appeal of the assessee is dismissed. lt, appeal of the assessee is dismissed.