THE ACIT, CIRCLE-5, RAJKOT-GUJARAT vs. M/S. MICRO FORGE (INDIA) LTD., RAJKOT-GUJARAT

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ITA 511/RJT/2014Status: DisposedITAT Rajkot06 May 2022AY 2008-093 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeal filed by the Revenue is not maintainable against a dissolved company which no longer exists in the eyes of law. The assessment order passed against a non-existent entity would be without jurisdiction.

What were the facts?

The assessee company was ordered to be liquidated and subsequently dissolved by the National Company Law Tribunal (NCLT). The Revenue filed an appeal against the Commissioner's order for the assessment year 2008-09.

What were the issues?

Whether an appeal can be maintained against a company that has been dissolved and ceased to exist. Whether tax demands are enforceable against a non-existent entity.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT

Before: SMT.ANNAPURNA GUPTA & T.R. SENTHIL KUMAR

Hearing: 28/04/2022Pronounced: 06/05/2022

PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER

1.

This appeal is filed by the Revenue against order dated 6.6.2014 passed by the Commissioner of Income-tax (Appeals), Jamnagar in Appeal No.CIT(A)/Jam/151/10-11 and No. 11/13-14 relating to the same Asst.Year 2008-09. One assessment order passed u/s.143(3) dated 12.12.2010 and another assessment order passed u/s.143(3) r.w.s. 147 dated 15.3.2013.

2.

Before going to the facts of the case, there is an email- communication dated 4.1.2021 from CA Prem Ladha, Insolvency Professional who is liquidator of the assessee-company stating that 2 the assessee-company was ordered to be liquidated by NCLT, Ahmedabad Bench vide order dated 12.12.2017 under section 33 of IBC Code, 2016 and on completion of liquidation process, NCLT, Ahmedabad Bench has ordered to dissolve the corporate debtor vide order dated 12.2.2020 and enclosed a copy of that order. Operative portion of the order reads as under:

“16. Having heard the submissions of the learned lawyers for the Liquidator, Respondents, IAs and gone through the documents annexed with the present petition, we find that the petitioner Liquidator has duly complied with the prescribed procedure seeking for liquidation and dissolution of the petitioner company. It is also found that affairs of the company are completely closed down and the Corporate Debtor has no fixed assets as on the date of commencement of liquidation.

17.

Therefore, the Petitioner Company deserves to be dissolved. Accordingly, this Adjudicating Authority hereby order that the company shall stand dissolved with effect from the date of this order i.e. 12.02.2020.

3.

In view of this development, since assessee-company is non- existent as of today and has no fixed assets as on the date of commencement of liquidation.

4.

When we confronted the above letter of Shri CA Prem Laddhal, Liquidator appointed by the NCLT, along with copy of order of the Tribunal, he has not disputed factum of the matter, or the present legal status of the assessee-company as being a non-existent entity. This being so, the only issue for our adjudication is about maintainability of appeal of the assessee-company before the ITAT and enforceability of tax demand raised by the Department in the impugned order against the assessee-company which was ceased to exist in the eye of law, by virtue of the company being dissolved as per the order of the National Company Law Tribunal (in short hereinafter "NCLT") order.

3 5. For consideration of the issue on hand, we draw support of the judgment of Hon’ble Supreme Court in the case of pr.CIT Vs. Maruti Suzuki India Ltd., 107 taxmann.com 375 (SC) where it was held that during pendency of assessment proceedings, assessee company was amalgamated with another company and thereby lost its existence, assessment order passed subsequently in name of said non-existing entity, would be without jurisdiction and was to be set aside. Similarly, Hon’ble Supreme Court in the case of ITO Vs. Durlabhbhai Kanubhai Rajpara, (2020) 114 taxman.com 482 (SC) has held that where High Court set aside reassessment proceedings on ground that no valid notice under section 148 could be issued against a “Dead Person”, SLP filed against said order was also dismissed.

6.

For the above reasons and judicial precedents, the appeal filed by the Revenue is not maintainable as against the respondent- company which is dissolved by order of the ld.NCLT cited (supra). We therefore dismiss the appeal as in limine.

7.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the Court on 06th May, 2022 at Ahmedabad.

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