Income Tax order passed against Struck off Company despite being Informed: ITAT quashes Notice and Order [Read Order]

The income tax order passed against a struck off company was quashed by the Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ). It was ruled that proceedings against a struck off company is invalid in law.

The assessee, Flightpath Aviation Institute Pvt. Ltd was struck off w.e.f. 29.08.2016. The income taxdepartment issued the reassessment notice 29.03.2017 to a non-existent entity.

The appeal before the appellate tribunal was filed against the order of the CIT(A)-NFAC dated 13.06.2023, and there was a delay of 706 days in filing the ITAT appeal.

The assessee explained that the delay occurred because the company had already been struck off and it had only two directors, a 91-year-old bedridden father and a son suffering from depression which made timely appeal filing difficult.

The bench found that reasons were genuine and reasonable. Therefore it condoned the delay and decided to entertain the matter on merits.

According to the assessee, the reassessment proceedings were initiated by issuance of notice under Section 148 dated 29.03.2017, even though the ROC had struck off the company from its register through an order dated 29.08.2016.

The assessee submitted that communication of the ROC striking-off. It asserted that the strike off was communicated to the assessee at the early stage through a letter dated 06.10.2017 and again on 16.12.2017.

The Department continued with reassessment proceedings and passed the consequential assessment order despite being informed that the entity no longer exists.

The bench of George Mathan (Judicial member) held that “the notice u/s.148 of the Act has been issued on stuck off company. The notice is found to be invalid and consequently quashed.”

Accordingly, the appeal was allowed.

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