2022 (2) TMI 434 - AT - Income Tax

Assessment against company non existent - struck off company i.e. Mehta Air Travel Pvt. Ltd. was not in existence on the date of passing Assessment Order - HELD THAT - It is matter of record that One Mr. Dhirajlal Terraiya vide letter dated 25.08.2015 in his reply to Show Cause Notice dated 18.08.2015, intimated the ITO Ward 2(1)(4) that the company was struck off from the records of Registrar of Companies (ROC), Gujrat, vide order dated 18.05.2011. Thus, the company is no longer in existence after being struck off from the Register of ROC. In absence of existing company, there cannot be any director who can sign the verification for the filing of Income Tax Return or making any compliances or replying to any notices from Income Tax Department. The struck off company i.e. Mehta Air Travel Pvt. Ltd. was not in existence on the date of passing Assessment Order. Hence, the present Assessment order is not valid and the same may be quashed - Appeal of assessee allowed.

Summary

Issues:
1. Validity of notice u/s. 148 on a non-existing company
2. Validity of assessment order passed without serving notice u/s. 143(2)
3. Consideration of judicial support by CIT(A)
4. Existence of company during assessment year

Analysis:

Issue 1:
The appeal challenges the validity of the notice u/s. 148 issued to a company that was struck off as defunct by the Registrar of Companies. The appellant argues that the company was non-existent at the time of notice issuance, rendering the proceedings invalid. The CIT(A) confirmed the notice's issuance and service, leading to the appeal.

Issue 2:
The appellant contests the assessment order's validity, highlighting the absence of service of notice u/s. 143(2). The Assessing Officer issued the notice but did not provide proof of service, raising concerns about the assessment's legality. The CIT(A) failed to address this ground, leading to a challenge on the order's validity.

Issue 3:
The appellant raised objections regarding the CIT(A)'s failure to consider judicial support submitted during the appeal. Various case laws were cited to support the appellant's contentions, but the CIT(A) dismissed their applicability due to factual differences. This issue questions the adequacy of judicial consideration in the appeal process.

Issue 4:
The core contention revolves around the company's existence during the assessment year. The appellant argued that the company was struck off from the Registrar of Companies, indicating its non-existence. This fact was crucial in determining the validity of the assessment order and the proceedings conducted by the Assessing Officer. The appellant's argument was supported by documentary evidence, leading to the reversal of the assessment order.

In the final judgment, the Appellate Tribunal held that the company, being struck off from the Registrar of Companies, was non-existent during the assessment year. This crucial fact invalidated the assessment order, leading to its annulment. The Tribunal set aside the assessment order for the Assessment Year 2008-09, ruling in favor of the appellant.