ITO Vs Pandian Anbalagan (Madras High Court)
Madras High Court has allowed an intra-court appeal, overturning a previous writ court order that set aside an income tax assessment against a struck-off company. The appeal was filed by the Income Tax Officer (ITO) against a director of M/s. Speed and Safe Freight Systems India Private Limited, whose company had been removed from the Register of Companies.
The High Court ruled that a director of a defaulting company, once its name is struck off, is not entitled to challenge an assessment order without first reviving the company. The court emphasized that the director’s proper course of action would be to restore the company’s legal existence to pursue its cause. While the writ court had interpreted Section 176 of the Income Tax Act, 1961, and Section 252 of the Companies Act, 2013, to set aside the assessment, the High Court disagreed. It clarified that independent liabilities of a director under Section 179 of the Income Tax Act, 1961, remain distinct and can be defended separately.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This intra-Court appeal has been directed against the order dated 03.10.2023 made in W.P.No.11841 of 2022.
2. The said writ petition has been filed by the Director of M/s. Speed and Safe Freight Systems India Private Limited. It appears that the said Company has been struck off from the official Register of Companies, perhaps on account of the defaults committed by the Director. The arguments before the Writ Court was that the Company ceased to exist as it has been struck off from the Register of Companies.
