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TMI Blog2022 (5) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... Act by the A.O has been confirmed by the CIT(A), New Delhi for Assessment Year 2014-15. 3. When the appeal is taken up for hearing, the Ld. DR submitted that, the assessee Company has been struck off vide Notification No ROC/DELHI/248(5)/STK-7/10587 dated 08/03/2019 of Registrar of Companies NCT of Delhi and Haryana. Further, submitted that, in view of the said Notification, the appeal filed by the assessee has become in-fructuous and prayed for dismissal of the present appeal as not maintainable. The Ld. DR has also produced Form No. STK-7 i.e. notice of striking off and dissolution issued by the ROC under Section 248(5) of Companies Act 2013 (hereinafter referred to as the Companies Act) along with list of struck off Companies, wherein the name of the assessee Company figured at Serial No. 606. The Ld. DR further submitted since the Assessee Company has been struck off, the Counsel appearing on behalf of the Assessee struck off Assessee Company has no locus standi to represent before the Tribunal. 4. Per contra, the Ld. Counsel for the assessee submitted that, the Appeal cannot be dismissed as 'not maintainable' merely on the ground of striking off the Assessee Company by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any from the register of companies on all or any of the grounds specified in sub-section (1) and the Registrar shall, on receipt of such application, cause a public notice to be issued in the prescribed manner: Provided that in the case of a company regulated under a special Act, approval of the regulatory body constituted or established under that Act shall also be obtained and enclosed with the application. The Section 248(2) will be invoked by the Company itself after extinguishing all its liabilities (including tax liabilities, if any). 7. The Companies can itself struck off under Section 248(2) of the Companies Act by its own only after 'extinguishing all the liabilities' (including the tax liabilities if any). But in the case of Company being struck off by the Registrar under Section 248(1) of the Companies Act, irrespective of existence of assets or the liabilities of the Company, the company will be stricken off if the Company commits any defaults mentioned in the Section 248(1) of the Act. 8. As per Section 248 (5) of the companies Act, the registrar of the Company shall publish notice of strike off the names of the companies in the official Gazette and on such publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has been struck off from the register of companies 9. When the Company is being struck off, there will be certain consequences. The Section 250 of the Companies Act deals with effect of Company notified as dissolved. Section 250 of the Companies Act. "250. Where a company stands dissolved under section 248, it shall on and from the date mentioned in the notice under sub-section (5) of that section cease to operate as a 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 amount due to the company and for the payment or discharge of the liabilities or obligations of the company." Thus, if the Company being struck off, the same shall be ceased to operate as a company and the Certificate of Incorporation issued to it shall deem to have been cancelled from the such date except for the purpose of realizing the amount due to the Company and for the purpose of payment or discharge of liabilities or obligation of the Company. 10. Thus, Combined reading of Section 250 and the sub-Sections (6) and (7) of Section 248 of the Companies Act, once the Company is struck off, it shall be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reach of duty on his part in relation of the Company. Section 179 of Income tax Act reads as follows:- 179. (1) Notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), where any tax due from a private company in respect of any income of any previous year or from any other company in respect of any income of any previous year during which such other company was a private company cannot be recovered, then, every person who was a director of the private company at any time during the relevant previous year shall be jointly and severally liable for the payment of such tax unless he proves that the nonrecovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. (2) Where a private company is converted into a public company and the tax assessed in respect of any income of any previous year during which such company was a private company cannot be recovered, then, nothing contained in sub-section (1) shall apply to any person who was a director of such private company in relation to any tax due in respect of any income of such private company assessable for any assessment year commencing be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Revenue is having a water tight case on merit, by dismissing the Appeal for having become in-fructuous will also result in non adjudication of the actual tax due by the assessee and the Revenue cannot recover the 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 principal of law 'Ubi Jus Ibi Remedium'. 19. The Hon'ble Apex Court while dealing with amalgamated Companies in the case of Pr. Commissioner of Income Tax Vs. Mahagun Realtors Pvt. Ltd., held that, 'whether corporate death of an entity upon amalgamation per se invalidates a tax assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 (and its 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 to the file of the ITAT and directed to decide the matter on merit. The relevant portion is as under:- "42. Before concluding, this Court notes and holds that whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." 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 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 Hon'ble Apex Court vide order dated 12/03/2019 held that, the High Court was wrong in dismissing the appeal as having rendered infructuous and further directed to decide the appeal afresh on merit in accordance with law in view of the relevant provisions of Companies Act and Income Tax Act. The relevant portions are hereunder: "9. Having heard the learned counsel for the appellant (Income Tax Department) and on perusal of the record of the case, we are constrained to allow the appeal, set aside the impugned order and remand the case to the High Court for deciding the appeal afresh on merits in accordance with law. 10. Mere perusal of the impugned order quoted supra would go to show that the High Court dismissed the appeal on the ground that it has rendered infructuous because it was brought to its notice that the name of the company the respondent assessee has been struck off from the Register of the Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icature for Rajasthan in dismissing the Appeal (ITA) for having become in fructuous on the ground that the Assessee company was 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 Appeal on merit. Ironically now the very same Department of revenue is seeking before us to dismiss the present Appeal as in-fructuous since the assessee company has been struck off. The Department cannot have such double standard. 24. CONCLUSION:- (i). Though the Assessee company has been struck off under Section 248 of the Companies Act 2013, in view of sub-sections (6) and (7) of Section 248 and Section 250 of companies Act 2013, the Certificate of Incorporation issued to the Assessee company cannot be treated as cancelled for the purpose of realizing the amount due to the company and for payment or discharge of the liability or obligations of the company, we are of the opinion that the Appeal filed by the struck off Assessee Company or Appeal filed by the Revenue against the struck off Company are maintainable. Therefore by rejecting the contention of the Ld. DR, we hold that the present Appeal filed by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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