Income Tax Appeal maintainable even after Striking Off of Company from MCA Roll: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the tax appeal filed by the assessee after the striking off the name from the Registrar of Companies (ROC) shall be maintainable.

The question before the Tribunal was that whether the struck off Company can be treated 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. It was argued that 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.

When the Revenue Department has not forgone the right to recover tax due or Written-off the demand on the ground of Company being 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 pending before us.

The division bench comprising Shri B. R. R. Kumar (Accountant Member) and Sh. Yogesh Kumar U.S (Judicial Member) has observed that in the case of M/s. Gopal Scrips Pvt. Ltd, the Department 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 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,” the Tribunal said.

Rejecting the arguments of the department, the Tribunal added that “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 Assessee (struck-off company) is maintainable and the same has to be decided on merit.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.