R.Deepak Vs ITO (Madras High Court)
Madras High Court has quashed income tax reopening notices, assessment orders, and demand notices issued against R. Deepak, a representative of a company whose name was struck off the Register of Companies. The court’s decision in R.Deepak Vs ITO remands the matter back to the Income Tax Department, instructing them to await the final order from the National Company Law Tribunal (NCLT) regarding the company’s restoration.
The petitioner challenged notices dated March 25, 2021, issued under Section 148 of the Income Tax Act, 1961 (IT Act), along with subsequent assessment orders dated March 29, 2022, under Section 147 read with Section 144, and demand notices of the same date under Section 156 of the IT Act, for assessment years 2016-17 and 2017-18.
The core of the petitioner’s argument was that at the time the impugned notices were issued on March 25, 2021, the company’s name had already been struck off from the Register of Companies by the Registrar of Companies (ROC) on August 2, 2019, under Section 248 of the Companies Act, 2013. Consequently, the company was inoperative, and the petitioner was unaware of these tax proceedings.
The petitioner’s counsel contended that the issue was no longer novel, citing several judicial precedents. They referred to the Supreme Court’s judgments in Principal Commissioner of Income Tax, New Delhi Vs. Maruti Suzuki India Limited (2019) and Saraswathi Industrial Syndicate Ltd. Vs. Commissioner of Income Tax (1990), though the specific applicability of these cases to a struck-off company’s tax liability was not detailed in the provided text. More directly, the counsel highlighted a recent decision by the Bombay High Court in Jitendra Chandralal Navlani & Anr. Vs. Union of India & Ors. (2024), where similar proceedings initiated against petitioners whose companies were struck off were quashed.
