TMI Blog2024 (1) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the assessee. Thus we hold that the appeal has been wrongly dismissed by the CIT(A) on the ground of assessee company name being struck off from the rolls of ROC. Accordingly we restore the issue/appeal to the file of CIT(A) with the direction to decide the same on merit. - SHRI RAJESH KUMAR, ACCOUNTANT MEMBER For the Appellant : Shri Miraj D Shah, A.R For the Respondent : Shri Manoj Kr. Pati, JCIT ORDER This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)- 22, Kolkata [hereinafter referred to as Ld. CIT(A) ] dated 10.03.2022 for the assessment year 2011-12. 2. The only issue raised before us at the time of hearing by the ld. Counsel of the assessee is that the order of Ld. CIT(A) is bad in law on the ground that Ld. CIT(A) has not decided the issue of addition of Rs. 25,00,000/- as made by the AO on account of unexplained cash credit however dismissed the appeal on the ground that the assessee has been struck off from the ROC records and even has surrendered the PAN and therefore the assessee was no longer in existence and thus wrongly dismissed the appeal of the assessee. 3. Afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany has failed to commence its business within one year of its incorporation 1[or]; (b) 2[***] (c) a company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455; or [(d) the subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation under sub-section (1) of section 10A; or (e) the company is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12.] he shall send a notice to the company and all the directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice. (2) Without prejudice to the provisions of sub-section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) . (5) At the expiry of the time mentioned in the notice, the Registrar may, unless cause to the contrary is shown by the company, strike off its name from the register of companies, and shall publish notice thereof in the Official Gazette, and on the publication in the Official Gazette of this notice, the company shall stand dissolved. (6) The Registrar, before passing an order under sub-section (5), shall satisfy himself that sufficient provision has been made for the realisation of all amount due to the company and for the payment or discharge of its liabilities and obligations by the company within a reasonable time and, if necessary, obtain necessary undertakings from the managing director, director or other persons in charge of the management of the company: Provided that notwithstanding the undertakings referred to in this sub-section, the assets of the company shall be made available for the payment or discharge of all its liabilities and obligations even after the date of the order removing the name of the company from the register of companies. (7) The liability, if any, of every director, manager or other officer who was exercising a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act: (3) (i) The Assessing Officer or Tax Recovery Officer] may, at any time or from time to time, by notice in writing require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee, to pay to the Assessing Officer or Tax Recovery Officer either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount. (ii) A notice under this sub- section may be issued to any person who holds or may subsequently hold any money for or on account of the assessee jointly with any other person and for the purposes of this sub- section, the shares of the joint holders in such account shall be presumed, until the contrary is proved, to be equal. (iii) . . (x) .. 12. Further, as per Section 179 of Income Tax Act, if the tax due from Private company in respect of any income of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as alive/operative/existing for the purpose of adjudication of the tax arrears and the consequence order by which the recovery proceedings are triggered by the Revenue. 15. If the proceedings pending before the Court or the Tribunal (regarding determination of quantum the tax/liability of paying the tax) is dismissed for having become in-fructuous without adjudicating the actual tax dues 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 Revenue proceeds for the recovery of the such tax due , the rights of the Directors of the Company will be seriously jeopardy and the same will amount to denial of the rights guaranteed under the Law. 16. In the instant Appeal, if we allow the request of the Revenue dismiss the Appeal as in- fructuous, one hand the appeal will be dismissed having become in-fructuous on the other hand, the Revenue Department will initiate proceedings under Section 179 of the Income Tax Act and that too 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 justice will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above terms, without order on costs. (emphasis supplied) 20. The Hon ble High Court of Judicature for Rajasthan in the case of 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 Revenue for having become in-fructuous since the Company had been struck off from the register of ROC and the said Company dissolved. The operative portion of the Hon ble High Court is as under:- 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 seek instructions about the present status of the Respondent assessee (Company) whether it is in existence or has become non operational or defunct by passage of time. Sh. Anuroop Singhi, Adv., appearing for the appellant has placed for our perusal a communication issued from the office of Registrar of Companies dated 07.04.2011 indicating that pursuant to subsection( 5) of Section 560 of the Companies Act, 1956 the name of Gopal Shri Scrips Pvt. Ltd., has been struck off from the register and the said company is dissolved. In the light of the communication placed for our perusal da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely, one under the Companies Act and the other under the Income Tax Act specifically deal with the cases of the Companies, whose name has been struck off under Section 560 (5) of the Companies Act. 15. 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. 16. 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. 17. In view of the foregoing discussion, the appeal succeeds and is accordingly allowed. The impugned order is set aside. The case is remanded to the High Court for deciding the appeal afresh on merits in accordance with law keeping in view the relevant provisions of Companies Act and the Income tax Act uninfluenced by any observations made by us on merits. 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 on Section 560(5) of the Companies Act, 1956 and held that the Appeal filed by the Revenue is maintainabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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