Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 2922 OF 2019
(Arising out of S.L.P.(C) No.10639 of 2017)
Commissioner of Income
Tax, Jaipur ….Appellant(s)
VERSUS
M/s Gopal Shri Scrips Pvt.Ltd. ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1.
Leave granted.
2. This appeal is filed against the final judgment
Signature Not Verified
Digitally signed by
ANITA MALHOTRA
Date: 2019.07.06
12:39:24 IST
Reason:
and order dated 09.08.2016 passed by the High
Court of Judicature for Rajasthan at Jaipur in
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DBITA No.53 of 2000 whereby the High Court
dismissed the appeal as having become infructuous
filed by the appellant herein.
3. The appeal involves a short question as would
be clear from the facts stated infra .
4. The appellant is the Union of IndiaIncome Tax
Department. The respondent is the assessee in the
appeal out of which this appeal arises.
5. The appellant herein filed an appeal under
Section 260A of the Income Tax Act,
1961(hereinafter referred to as “the Act”) in the High
Court of Rajasthan (Jaipur bench) against the order
dated 28.04.2000 of Income Tax Appellate Tribunal
(ITAT) in ITA No 226/JP/1999.
6. By impugned order, the High Court dismissed
the appeal as having rendered infructuous giving
rise to filing of this appeal by way of special leave by
the Income Tax Department in this Court.
The impugned order reads as under:
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Ón the last date of hearing when the matter
cam up before the Court on 05.07.2016,
counsel for the appellant was directed to seek
instructions about the present status of the
Respondentassessee (Company) whether it is
in existence or has become non operational
or defunct by passage of time.
Sh. Anuroop Singhi, Adv., appearing for
the appellant has placed for our perusal a
communication issued from the office of
Registrar of Companies dated 07.04.2011
indicating that pursuant to subsection(5) of
Section 560 of the Companies Act, 1956 the
name of Gopal Shri Scrips Pvt. Ltd., has been
struck off from the register and the said
company is dissolved.
In the light of the communication
placed for our perusal dated 07.04.2011, no
purpose is going to be served in examining
the substantial question of law which has
been raised for consideration in the instant
appeal and on account of these change in
circumstances, the present appeal has
become infructuous and accordingly stands
dismissed. However, the appellant is still at
liberty to file application if any occasion
arises in future.”
7. The short question, which arises for
consideration in this appeal, is whether the High
Court was justified in dismissing the appeal filed by
the Income Tax Department on the ground that it
has rendered infructuous.
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8. Mr. A.N.S. Nadkarni, learned ASG appeared for
the appellant. None appeared for the respondent
(assessee) though served.
9. Having heard the learned counsel for the
appellant (Income Tax Department) and on perusal
of the record of the case, we are constrained to allow
the appeal, set aside the impugned order and
remand the case to the High Court for deciding the
appeal afresh on merits in accordance with law.
10. Mere perusal of the impugned order quoted
supra would go to show that the High Court
dismissed the appeal on the ground that it has
rendered infructuous because it was brought to its
notice that the name of the company the
respondentassessee has been struck off from the
Register of the Company under Section 560(5) of the
Companies Act, 1956.
11. In other words, the High Court was of the view
that since the respondentCompany stands
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dissolved as a result of the order passed by the
Registrar of the Companies under Section 560 (5) of
the Companies Act, the appeal filed against such
Company which stands dissolved does not survive
for its consideration on merits.
12. In our view, the High Court was wrong in
dismissing the appeal as having rendered
infructuous.
13. The High Court failed to notice Section 560(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".
14. The aforementioned 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 560 (5) of the Companies Act.
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15. These provisions provide as to how and in
what manner the liability against such Company
arising under the Companies Act and under the
Income Tax Act is required to be dealt with.
16. Since the High Court did not decide the appeal
keeping in view the aforementioned two relevant
provisions, the impugned order is not legally
sustainable and has to be set aside.
17. In view of the foregoing discussion, the appeal
succeeds and is accordingly allowed. The impugned
order is set aside. The case is remanded to the 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
uninfluenced by any observations made by us on
merits.
18. Indeed, having formed an opinion to remand
the case for the reasons mentioned above, we
refrain ourselves from making any observation on
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merits of the controversy involved in this appeal.
Since the appeal is quite old, we request the High
Court to decide the appeal preferably within six
months.
.………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[DINESH MAHESHWARI]
New Delhi;
March 12, 2019
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