Income Tax Appellate Tribunal - Kolkata
Victor Credit & Construction (P) Ltd, ... vs I.T.O Wd - 4(4),Surat, Surat on 1 June, 2017
1
ITA No.1104/Kol/2013
Victor Credit & Constn. (P) Ltd. AY 2007-08
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH: KOLKATA
[Before Shri A. T. Varkey, JM & Shri Waseem Ahmed, AM]
I.T.A. No. 1104/Kol/2013
Assessment Year: 2007-08
Victor Credit & Construction (P) Ltd. Vs. Income-tax Officer, Wd-4(4), Surat
(PAN: AAACV7753N)
Appellant Respondent
Date of Hearing 04.05.2017
Date of Pronouncement 01.06.2017
For the Appellant Shri Gautam Jain, Advocate
For the Respondent Shri Niraj Kumar, CIT, DR
ORDER
Per Shri A.T.Varkey, JM
This is an appeal filed by the assessee against the order of Ld. CIT(A)-VI, Kolkata dated 07.02.2013 for AY 2007-08.
2. The main grievance of the assessee is that it is a defunct company and the Registrar of Companies has struck off the name of the company from the register. According to the Ld. Counsel Shri Gautam Jain, the company was not in existence in the relevant assessment year, so, there was no question of assessing the company under the Income-tax Act. We note that the assessee has raised this issue before the Ld. CIT(A) vide an additional ground of appeal which has been discussed in the impugned order from pages 43 to 54. The Ld. CIT(A) has sought the remand report from the AO on the said additional ground of appeal and thereafter, dismissed the said ground of appeal of the assessee. Before us, the Ld. Counsel for the assessee Shri Gautam Jain, Advocate invited our attention to page no. 102 of the paper book wherein the letter of the Registrar of Companies has been annexed. We note that it is a notification no. roc/wb/ipc/sm/07 dated 23.06.2008 wherein it has been stated that pursuant to sub-section (5) of section 560 of the Companies Act, 1956 the name of M/s. Victor Credit & Construction (P) Ltd. (assessee) has been struck off from the 2 ITA No.1104/Kol/2013 Victor Credit & Constn. (P) Ltd. AY 2007-08 register and that the said company is dissolved. In the letter it has also stated that a copy has been forwarded (1) to the Manager, Govt. of India Press, Faridabad for publication in Part II section-1 of the Gazette of India and (2) The Income Tax Officer Company Circle Number. The ld. Counsel took our attention to page 107 of the paper book which is the remand report of the AO wherein the AO has stated that he had deputed an Inspector to verify the veracity of the claim made by the assessee and to cross check from the Registrar of Companies, West Bengal as to whether the fact brought to his knowledge that the assessee company has been struck off from the register of the ROC and whether the company stands dissolved. Thereafter, it has been acknowledged by the AO that the Assistant Registrar of Companies, West Bengal in his letter dated 03.01.2013 confirmed that the name of the company has been struck off from their list on 10.07.2008 (as noted by us from page 102 that the date is 23.06.2008). The fact of the company being struck off from the register by the Registrar of Companies u/s. 560 of the Companies Act, 1956 has been thus proved, therefore, the assessee's claim that company stands dissolved and consequently it ceased to exist in the eyes of law and, therefore, the assessment order itself is void and null. In a similar case, the ITAT, Delhi Bench in I. T. O vs Vived Marketing Servicing Pvt Ltd ITA No. 1249/Del/2007 for AY 1997-98 has held on 16.06.2008 as under:
"4. We have heard the arguments of both the sides and also perused the relevant material on record. It is observed that the issue involved in the present case is squarely covered in favour of the assessee by the decision of the Tribunal in the case of Impsat Pvt. Ltd. (supra) wherein it was held by Section 560 of the Companies Act provides for a summary procedure for putting an end to the corporate existence without going through the cumbersome procedure of liquidation. It was held that it confers powers upon the Registrar of Companies to strike the name of the company of the register if it is found to be defunct and after following the prescribed procedure, the Registrar may strike the name of the company off the register and shall publish a notification to that effect in the Official Gazette. On the publication in the Official Gazette of the notice, the company shall stand dissolved and once it ceased to exist, there was no question of assessing it for income tax as there is no provision in the Act to assess a company which is dissolved. It was thus held that if the company is not in existence at the time of making the assessment, no order of assessment can be validly passed upon it under the Income-tax Act and if one is passed, it must be a nullity. In our opinion, this decision of the Tribunal is squarely applicable to the facts of the present case and respectfully following the same, we uphold the impugned order of the learned CIT(A) holding the assessment made by the AO in the name of non-existent company to be bad in law. This appeal of the Revenue is accordingly dismissed."3 ITA No.1104/Kol/2013
Victor Credit & Constn. (P) Ltd. AY 2007-08
3. We note that the aforesaid order of the Tribunal has been upheld by the Hon'ble Delhi High Court vide ITA No. 273/2009 dated 17.09.2009, wherein the Hon'ble High Court has held as under:
"When the Assessing Officer passed the order of assessment against the respondent company, it had already been dissolved and struck off the register of the Registrar of Companies under section 560 of the Companies Act. In these circumstances, the Tribunal rightly held that there could not have been any assessment order passed against the company which was not in existence as on that date in the eyes of law it had already been dissolved. The Tribunal relied upon its earlier decision in Impsat Pvt. Ltd. Vs. ITO 276 ITR 136 (AT). 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."
4. We note that since the Registrar of Companies has struck off the name of the company from the register, so the company stood dissolved and ceased to exist, there was no question of assessing it for income tax as there is no provision in the Act to assess a company which is dissolved. Therefore, since the company is not in existence at the time of making the assessment, so no order of assessment could be validly passed as per the Income Tax Act, 1956 and if it is passed it will be null in the eyes of law. For that, we rely on the decision of the Tribunal in the case of Impsat Pvt. Ltd. 216 ITR 136 (AT) which has been relied on by the Delhi Tribunal in the case of ITO Vs. M/s. Vived Marketing Servicing Pvt. Ltd. in ITA No. 1249/D/2007 dated 16.06.2008 which has been upheld by the Hon'ble High Court of Delhi vide order passed in ITA No. 273/2009 dated 17.09.2009 (supra). The Ld. CIT, DR only raised the issue that the assessee had voluntarily filed the return of income, so, assessment order was passed by the AO. We do not find any merit in the argument of the Ld. CIT, DR because there is no estoppel against statute. Merely by filing of return of income cannot breath life into the already dead/non-existent entity and cannot be the basis for making assessment of a non existing/ceased legal entity in the eyes of law. This particular question was also raised before the Tribunal decision in Impsat Pvt. Ltd. (supra), wherein the Tribunal repelled the same and has held as under:
"The next question for our consideration is whether by filing the return of income in October 2001 the assessee company can be said to have admitted that it continued to be in existence so that the assessment made upon it may be held to be valid. This raises the question whether the assessee can consent to the Assessing Officer making an assessment upon it, though there is no provision in the Income-tax Act to do so. In Asit Kumar Ghose v. Commissioner of 4 ITA No.1104/Kol/2013 Victor Credit & Constn. (P) Ltd. AY 2007-08 Agricultural Income-lax [1952] 22 ITR 177 the Calcutta High Court held that should an assessee file return or intervene in an assessment proceeding pending against an executor of an estate under the impression that he is liable to be charged as beneficiary or the estate, it is open to him, if he is not really liable at law, to appeal in proper time against the order of assessment against him and point out the invalidity of the assessment though he might have, by his conduct, acquiesced in the assessment proceedings. There can be no estoppels against statute. An assessment is to be governed by the provisions of the Act and not on the view which the parties may take as to their rights and liabilities. In CIT v. Bharat General Reiusurance Co. Ltd. [1971] 81 ITR 303, the Hon'ble Delhi High Court held, where the assessee itself included the dividend in his return but later challenged the assessment of the same in, the year in question, that it must be taken that the assessee had resiled from the position which it had wrongly taken while tiling the return. In the light of these authorities, the conduct of the assessee before us in filing the return of income and in participating in the proceedings for assessment do not confer jurisdiction upon the Assessing Officer to assess it, which must really depend upon the effect of the provisions of the Income-tax Act. In the absence of any provision in the Act to assess a company that has been dissolved and thus ceased to exist, no assessment order can be made against it by the Assessing Officer. The essence of a provision enabling the Assessing Officer to do so cannot be supplied by the assessee by merely filing a return and participating in the proceedings."
5. Therefore, since the company is not in existence at the time of making the assessment, no order of assessment could be validly passed as per the Income Tax Act, 1956 and if it is passed it will be a nullity in the eyes of law. For that, we rely on the decision of the Tribunal in the case of Impsat Pvt. Ltd. (supra) which has been relied on by the Delhi Tribunal in the case of ITO Vs. M/s. Vived Marketing Servicing Pvt. Ltd. in ITA No. 1249/D/2007 dated 16.06.2008 which has been upheld by the Hon'ble High Court of Delhi vide order passed in ITA No. 273/2009 dated 17.09.2009 (supra). Respectfully following the same, we allow the appeal of assessee.
6. In the result, appeal of assessee is allowed.
Order is pronounced in the open court on 01.06.2017
Sd/- Sd/-
(Waseem Ahmed) (Aby. T. Varkey)
Accountant Member Judicial Member
Dated : 1st June, 2017
Jd.(Sr.P.S.)
5
ITA No.1104/Kol/2013
Victor Credit & Constn. (P) Ltd. AY 2007-08
Copy of the order forwarded to:
1. Appellant - M/s. Victor Credit & Construction (P) Ltd., 13, Bonfield Lane, 6th Floor, Kolkata-700 001.
2 Respondent - ITO, Ward-4(4), Surat.
3. The CIT(A), Kolkata
4. CIT , Kolkata
5. DR, Kolkata Benches, Kolkata /True Copy, By order, Asstt. Registrar.