INCOME TAX ACT, 1961

Section 261

Appeal (Supreme Court) - Maintainability - Proceedings in case of non-operational/ dissolved/struck off company -

Aggrieved by the order of Tribunal, Revenue preferred appeal and High Court dismissed the said appeal as having rendered infructuous on the ground that assessee-companies was struck off from the Register of the Company under section 560(5) of the Companies Act, 1956, therefore, the appeal filed against such company would not survive for its consideration on merits. Held: High Court failed to notice section 506(5) proviso (a) of the Companies Act and further failed to notice Chapter XV of the Income Tax Act, which deals with 'liability in special cases' and its clause (L) which deals with 'discontinuance of business or dissolution'. The said two provisions, namely, 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 506(5) of the Companies Act and also provide as to how and in what manner the liability against such companies arising under the Companies Act and under the Income Tax Act is required to be dealt with. Since High Court did not decide the appeal keeping in view the said two relevant provisions, the impugned order was set aside and the case was remanded to 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.

REFERRED : CIT v. M/s. Gopal Shri Scrips (P) Ltd. [Income Tax Appeal No. 53 of 2000, dt. 9-8-2016]: 2019 TaxPub(DT) 1963 (Raj-HC)

FAVOUR : Matter remanded

A.Y. :

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