Kerala High Court: E-Toilets to be Build for Flood Affected Tribal Families  ||  Amalgamation of Air Asia With Air India Express Approved by NCLT  ||  SC: Accused Refusing to Undergo Medical Examination Amounts to Non-Cooperation With Investigation  ||  Ker. HC: Power Under Section 216 of CrPC Can be Exercised by the Court at Any Time Before Judgement  ||  IIAC (Conduct of Micro and Small Enterprises Arbitration) Regulations, 2024 Issued by IIAC  ||  Mad. HC: State Bound to Take Care of Adults With Mental Health Illness and No Family Support  ||  Mad. HC: State Bound to Take Care of Adults With Mental Health Illness and No Family Support  ||  Ker HC: Min. of Animal Husbandry to Consider Objections to Ban on ‘Dangerous & Ferocious’ Dog Breeds  ||  Madras High Court: Important to Send Out Message That Courts Shouldn’t be Taken for Granted  ||  Insolvency Proceedings Initiated Against Himalayan Mineral Water by NCLT    

Oasis Textiles Limited vs. The DCIT - (Income Tax Appellate Tribunal) (25 Mar 2022)

Once a company is dissolved, it becomes a non-existent party and therefore, no action can be brought in its name

MANU/IB/0130/2022

Direct Taxation

The assessee-company was trading in shares. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Income Tax Act, 1961 (IT Act) was issued and served upon the assessee. Ultimately, the assessment was concluded by the AO by making addition of Rs.1,13,65,136 under Section 68 of the IT Act on account of unexplained cash and unexplained income, and assessment order under section 143(3) of the IT Act was accordingly passed. Thereafter, the addition was confirmed by the learned CIT(A) by order. Against the confirmation of addition, the assessee is in appeal before the Tribunal.

On completion of liquidation process, assessee- company was dissolved by the NCLT vide order dated 30.6.2020. The claim of the Department was prior to the date of Resolution Plan approved by the NCLT, and therefore, the present income tax proceedings is hit by section 31(1) of Insolvency and Bankruptcy Code, 2016, which has overriding effect vis-à-vis the Income Tax Act, 1961. All these events are within the knowledge of the Income Tax Department, as the OL of assessee-company has intimated the Department from time to time in writing, but no action has been taken by the Department.

Once a company is dissolved, it becomes a non-existent party and therefore no action can be brought in its name. Therefore, in view of overriding effect of IBC code to the Income Tax proceeding, Revenue is not entitled to recover the claim, if any arising from the present proceedings for Assessment year 2015-16, as the same is not part of the resolution plan. The entire proceedings including the appeal have become infructuous and the same is liable to dismissed as infructuous.

Tags : ASSESSMENT   ADDITIONS   LEGALITY  

Share :        

Disclaimer | Copyright 2024 - All Rights Reserved