The Madras High Court while allowing the appeal in the favour of the revenue department held that the striking of the name of Company from the Register of Companies can not impact assessment if no documents submitted to strike off the name from Income Tax Department.
The assessee, M/s.Tarachanthini Services Pvt. Ltd. is engaged in investment business and dealing in shares. For the Assessment Year under consideration, they filed their Return of Income declaring a loss of Rs.78,42,605/-.
When the assessment was reopened under Section 147 of the Act by issuing notice under Section 148 of the Act, the assessee Company was carrying on business. The assessee fully cooperated in the reassessment proceedings. At no point of time, the assessee informed the Assessing Officer that the Company has been struck off from the Register of Companies in 2007.
The assessee being aggrieved by such order filed an appeal before the CIT(A). The appeal was dismissed and aggrieved by such order, the assessee preferred to appeal to the Tribunal as well as the Revenue.
The Tribunal remanded the matter to the Assessing Officer to investigate as to whether the Assessee Company was in existence at the relevant time. As the Tribunal was of the view that if the Company was not in existence, the Assessing Officer cannot stand, the correctness of the order passed by the Tribunal was called in question by the Revenue.
The two-judge bench of Justice T.S.Sivagnanam and V.Bhavani Subbaroyan observed that the assessee took no steps to inform the Department about the striking off the name of the Company from the Register of Companies. The assessee did not file any documents before the Assessing Officer stating that their PAN number has to be revoked and their Income Tax account has to be closed.
Therefore the court held that the relevant time would be when the Company was in existence during the assessment year 2000-01, that alone would be the relevant time and the relevant year for the assessee’s case.
“The Tribunal erred in not considering the provisions of Section 176 of the Act and without deciding the said issue, the question of remanding the matter to the Assessing Officer does not arise and consequently the Tribunal committed an error of law on that aspect,” the bench said.