Supreme Court of India

COMMISSIONER OF INCOME TAX, JAIPUR v. M/S GOPAL SHRI SCRIPS PVT. LTD

Supreme Court sets aside High Court dismissal of tax appeal against struck-off company; remands case

The Supreme Court allowed the Income Tax Department's appeal and set aside the High Court's order dismissing the appeal as infructuous. The case was remanded to the High Court to decide the appeal afresh on merits, and the Court requested a decision preferably within six months.

Why it matters: The Court held that provisions of the Companies Act and the Income Tax Act specifically govern liability of companies whose names are struck off under Section 560(5), so the High Court had to consider them.

Summary written with AI and checked against the judgment text. It is not part of the judgment; read the full text or PDF.

Headnote

Headnote as published with the judgment in the Supreme Court Reports dataset; it is not part of the judgment.

Court: Supreme Court of India
Case number: CIVIL APPEAL No. 2922/2019
Date of judgment: 12 March 2019
Petitioner / Appellant: COMMISSIONER OF INCOME TAX, JAIPUR
Respondent: M/S GOPAL SHRI SCRIPS PVT. LTD
Neutral citation: 2019 INSC 351
SCR citation: [2019] 4 S.C.R. 704
Bench: ABHAY MANOHAR SAPRE, DINESH MAHESHWARI
CNR: ESCR010007112019
Result: Allowed

Download PDF Find it on the Supreme Court SCR site Get the signed copy

Signed copy from the Supreme Court. On the court's Judgments page, open the Case Number tab, choose the case type Civil Appeal, enter the case number 2922 and the year 2019, solve the captcha, and open the PDF in the Judgment column. Or use the Judgment Date tab with 12-03-2019 as both dates. The court's page asks for a captcha, so this step is yours.

This is the Supreme Court Reports (SCR) copy, with citation and headnotes, obtained through the Indian Supreme Court Judgments open dataset (CC-BY-4.0, Dattam Labs) and unchanged. To find it on the Supreme Court's own SCR site (scr.sci.gov.in), enter the neutral citation 2019 INSC 351 in its Neutral Citation field. It is not the plain signed judgment and not a certified copy; for a certified copy use the Certified Copy service on sci.gov.in. The text below is extracted automatically and may contain errors, and the result label is read from the closing lines of the judgment, so it can occasionally be wrong. The PDF is the authoritative version.

704 SUPREME COURT REPORTS [2019] 4 S.C.R.

COMMISSIONER OF INCOME TAX, JAIPUR

M/S GOP AL SHRI SCRIPS PVT . LTD.

(Civil Appeal No.2922 of 2019)

MARCH 12, 2019

[ABHA Y MANOHAR SAPRE AND

DINESH MAHESHW ARI, JJ.]

Income Tax Act, 1961 – s.260A and Chapter XV – Companies Act, 1956 – s.560 – High Cour t dismissed the appeal on the gr ound that it had become infr uctuous as the name of the r espondent- assessee (company) was str uck off fr om the r egister of the company u/s.560(5) of the Companies Act, 1956 – Pr opriety of – Held: High Court was wr ong in dismissing the appeal r endering it infr uctuous as it did not decide the appeal keeping in view the two r elevant provisions i.e. s.560(5) proviso (a) of the Companies Act and 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’ – These pr ovisions specifically deal with the cases of the Companies, whose name has been struck off u/s. 560(5) of the Companies Act – Thus, or der of the High Cour t not legally sustainable – Accordingly, case r emanded to the High Cour t for deciding the appeal afr esh.

Remanding the matter to the High Court, the Court HELD: 1. The High Court failed to notice Section 560 (5)

proviso (a) of the Companies Act and fur ther 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”. [Para 13] [707-D] 2. The aforementioned two pr ovisions, 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 of f under Section 560 (5) of the Companies Act.

[Para 14] [707-E]

[2019] 4 S.C.R. 704

704

705

3. These provisions provide as to how and in what manner the liability against such Company arising under the Companies Act, 1956 and under the Income Tax Act, 1961 is r equired to be dealt with. [Para 15] [707-F] 4. 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. [Para 16] [707-F] 5. The case is remanded to the High Court for deciding the appeal afresh on merits in accordance with law keeping in view the r elevant pr ovisions of Companies Act and the Income tax Act. [Para 17] [707-G-H; 708-A] CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2922 of 2019.

From the Judgment and Order dated 09.08.2016 of the High Court of Judicature for Rajasthan at Jaipur Bench, Jaipur in Income Tax Appeal (ITA) No. 53 of 2000.

A. N. S. Nadkarni, ASG, Ms. Purnima Bhat Kak, Ms. Nisha Bagchi, Mrs.Anil Katiyar, Advs. for the Appellant.

T. R. B. Sivakumar, Adv. for the Respondent.

The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J. 1. Leave granted.

2. This appeal is filed against the final judgment and order dated 09.08.2016 passed by the High Court of Judicature for Rajasthan at Jaipur in 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 India-Income 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 260-A 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.

COMMISSIONER OF INCOME TAX, JAIPUR v. M/S GOPAL SHRI SCRIPS PVT . LTD.

706 SUPREME COURT REPORTS [2019] 4 S.C.R.

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:

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 Respondent-assessee (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 sub-section(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 07.04.201 1, 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 liber ty 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.

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 A B C D E F G H 707 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 respondent-assessee 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 respondent-Company stands 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.

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 COMMISSIONER OF INCOME TAX, JAIPUR v. M/S GOPAL SHRI SCRIPS PVT . LTD. [ABHAY MANOHAR SAPRE, J.] A B C D E F G H 708 SUPREME COURT REPORTS [2019] 4 S.C.R.

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 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.

Ankit Gyan Matter remanded to High Court