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TMI Blog2023 (12) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... ication made by the assessee from Easy Exit Scheme [EES] , 2010 dated 28th August, 2010, was accepted and in terms of Section 560(5) of the Companies Act, 1956, the name of the assessee company has been struck off from the register and the company was dissolved from that date and despite this fact available with the learned Assessing Officer, the assessment orders were passed in the name of "Silverline Trading Company Ltd." and therefore, such orders are bad and not sustainable. The learned Assessing Officer is aggrieved with this appellate order and is in appeal before us. 02. The learned Departmental Representative relied upon the decision of the Hon'ble Delhi HC in Sky Light Hospitality Llp Vs. ACIT. 03. The learned Authorized Representative relied upon the orders of the co-ordinate Bench in assessee's own case on identical facts and circumstances for A.Y. 2011-12 and for earlier years i.e. A.Y. 2007-08. 04. On careful consideration of the facts and rival contention, we find that the above appellant entity is not in existence since 18th March, 2011, as per the certificate issued by the Registrar of Companies, Maharashtra, Mumbai as its name has been struck off under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not received to the second letter within one month from the date thereof, a notice will be published in the Official Gazette with a view to striking the name of the company off the register. (3) If the Registrar either receives an answer from the company to the effect that it is not carrying on business or in operation, or does not within one month after sending the second letter receive any answer, he may publish in the Official Gazette, and send to the company by registered post, a notice that, at the expiration of three months from the date of that notice, the name of the company mentioned therein will, unless cause is shown to the contrary, be struck off the register and the company will be dissolved. (4) If, in any case where a company is being wound up, the Registrar has reasonable cause to believe either that no liquidator is acting, or that the affairs of the company have been completely wound up, and any returns required to be made by the liquidator have not been made for a period of six consecutive months, the Registrar shall publish in the Official Gazette and send to the company or the liquidator, if any, a like notice as is provided in sub-section (3). (5) At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act, it clearly transpires that after the requisite procedure prescribed under Subsections (1) to (4) is followed and the time mentioned in the notice referred to in Subsections 3 or 4 expires, the Registrar may strike off the name of the company concerned from the Register of Companies. If it does so, it shall publish a notice thereof in the Official Gazette and on publication of the notice in the Official Gazette, the company shall stand dissolved. However, proviso to Subsection (5) of Section 560 further provides that notwithstanding dissolution of the company, liability of every director, manager or other officer who was exercising any power of management and of every member of the company shall continue and may be enforced as if the company had not been dissolved. Proviso (b) further provides that nothing provided in Subsection (5) in respect of dissolution of company whose name has been struck off from the Register, shall affect the power of the competent Court to wind up a company. 8. The provisions of Subsection (6), if read carefully, would indicate that if a company or any member or creditor of the company feels aggrieved by the decision of the Registrar t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person who holds or may subsequently hold money for or on account of the assessee, to pay to the Income-tax 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 sub-section, the shares of the joint-holders in such account shall be presumed, until the contrary is proved, to be equal. (iii) A copy of the notice shall be forwarded to the assessee at his last address known to the Income-tax Officer, and in the case of a joint account to all the joint-holders at their last addresses known to the Income-tax Officer. (iv) Save as otherwise provided in this sub-section, every person to whom a notice is issued under this sub-section shall be bound to comply with such notice, and, in particular, where any such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r provided in sections 222 to 225 and the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under section 222." 12. Section 179 of the Income Tax Act also assumes importance in the point we are discussing and stipulates that if the tax due from a private company in respect of any income of previous year become unrecoverable against the company for any reason, 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 non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. Section 179 of the Income Tax Act reads thus:- "179. Liability of directors of private company in liquidation.- (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, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned senior counsel for the simple reason that Section 250 of the Companies Act, 2013 was not in existence in the year 2006 nor do we find any provision parallel to and in pari materia with Section 250 of the Companies Act, 2013 in the Companies Act, 1956, as was applicable at the relevant point of time. 16. True it is that in terms of Section 250 of the Companies Act, 2013, where a company stands dissolved under Section 248 of the Companies Act, 2013 (which is in pari materia with Section 560 of the Companies Act, 1956) the certificate of incorporation issued to such company shall be deemed to have been cancelled except for the purpose of realizing the amount due to the company or for payment or discharge of the liability or obligation of the company. 17. It is equally true that after promulgation of the Companies Act, 2013 and in view of the specific provision made in Section 250 thereof, the dissolved company is by fiction of law conferred the juridical personality and may, therefore, be competent to challenge the assessment order, if any, passed against it when it stood dissolved by the Registrar under Section 248 of the Companies Act, 2013. In the absence of similar provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gister and formally dissolved on the publication of the notice in the Official Gazette. 20. It is true that the appellant-director, who was apprehending that the liability for the tax due for the previous year assessed by the assessing authority against the company could be fastened on him should have been diligent enough to prosecute his appeal and bring true facts to the notice of the concerned authorities, however, we are also aware that when a company becomes defunct and its management goes haywire, there is nobody to take the responsibility of the affairs of the company. Even mice leave the ship when it is sinking. It is in these circumstances, perhaps, the director of the company could not lay his hand on the Official Gazette and was under a bona fide impression that the application for striking off the company from the Register of the Companies and effecting dissolution by publication was still pending before the Registrar of Companies. 21. Be that as it may, now it has come to light that on the date the assessment order was passed, the appellant-company stood dissolved under Section 560(5) of the Companies Act and, therefore, could not have been assessed. In terms of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We are of the opinion that the view taken by the Tribunal is perfectly valid and in accordance with law. No substantial question of law arises. Dismissed." 23. The relevant observations of the ITAT Delhi Bench in Impsat (P) Ltd. v. Income Tax Officer are also worth taking note of and are, thus, set out below:- "17. A reference to page 1901 of A. Ramaiya's commentary on the Companies Act, 1956 (12th Edition) by Hon'ble Justice Y.V. Chandrachud (former Chief Justice of India) shows the following extract from Halsbury"s Laws of England, fourth ediction, Vol.7, para 1448, page 809 under the heading "Effecting of dissolution". "The dissolution puts an end to the existence of the company. Unless and until it has been set aside, it prevents any proceedings being taken against promoters, directors or officers of the company to recover money or property due or belonging to it or to prove a debt due from it. When the company is dissolved, the liquidator's statutory duty towards the creditors and contributories is gone; but, if he has committed a breach of his duty to any creditor by distributing the assets without complying with the requirements of the Companies Act, 1948, he is li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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