R.S. SECURITIES AND LABOUR SERVICES PVT. LTD.,KHIRKI VILLAGE, MAIN ROAD V. INCOME TAX OFFICER, NEW DELHI

ITA 3309/DEL/2024

AI Insights

The case involves R. S. Securities and Labour Services Pvt. Ltd, which appealed against the orders of the National Faceless Appeal Centre (NFAC) and the Income Tax Officer (ITO), Ward-20(4), Delhi. The core issue was the validity of the assessment and subsequent orders against a company whose name had been struck off the records of the Ministry of Corporate Affairs (MCA) and was thus non-existent at the time the orders were issued. The tribunal found that both the assessment order and the NFAC's order were issued after the company's dissolution, rendering them invalid.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 36825 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act, 1961, Companies Act, 2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARTI SHARMA
• Assessee Lawyers: GAURAV JAIN
• Section: 147; 144

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 3308 & 3309/Del/2024 (Assessment Year: 2011-12) R. S. Securities and Labour Services Pvt. Ltd, 808, Khirki Village, Main Road, New Delhi-110017 Vs. ITO, Ward-20(4), New Delhi PAN: ALTPK5011F Assessee by : Shri Gaurav Jain, Adv Revenue by: Ms. Bharti Sharma, Adv Date of Hearing 11/02/2025 Date of pronouncement 11/02/2025 O R D E R 1. The appeal in ITA No.3308 & 3309/Del/2024 for AY 2011-12 arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] dated 31.05.2024 against the order of assessment passed u/s 147 r.w.s. 144 of the Income-tax Act, 1961 dated 03.12.2018 (hereinafter referred to as ‘the Act’) by ITO, Ward-20(4), Delhi (hereinafter referred to as ‘ld. AO’). 2. The only effective issue to be decided in both these appeals is as to whether the ld NFAC was justified in confirming the action of the ld AO in passing an order on a company whose name had already been struck off in the records of the Ministry of Corporate Affairs, Government of India. 3. We have heard the rival submissions and perused the materials available on record. It is a fact that the name of the assessee company had been struck off in the records of Ministry of Corporate Affairs, Government of India on 21.8.2017 in terms of section 248(5) of the Companies Act, 2013. Notification in the official gazette in this regard has been issued on 1.9.2017 by the Ministry of ITA No. 3308 & 3309/Del/2024 R. S. Securities and Labour Services Pvt. Ltd Page | 2 Corporate Affairs, Government of India. Pursuant to this striking off, the company stands automatically dissolved. Admittedly, no action has been taken by the Income Tax Department for restoration of this company for removing the striking off of the name with the Ministry of Corporate Affairs (MCA) , Government of India, as mandated by CBDT Notification dated 29.12.2017 which is enclosed in Pages 1 to 3 of the Paper Book. Among the 24945 companies which were struck off by the MCA, the name of the assessee company figures in serial no. 16836. The present appeal has been filed by the erstwhile director of the assessee company. The assessment order has been framed on 3.12.2018 and order of ld NFAC was passed on 31.5.2024. Both the orders of the lower authorities had been framed after the date of dissolution of the assessee company as stated above. 4. In view of the aforesaid facts, we have no hesitation to quash the orders passed by the lower authorities as having been passed on a non-existent entity. The grounds raised by the assessee are allowed. 5. Since the quantum assessment is quashed, the penalty proceedings would have no legs to stand. 6. In the result, both the appeals of the assessee are allowed. Order pronounced in the open court on 11/02/2025. -Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated:11/02/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) ITA No. 3308 & 3309/Del/2024 R. S. Securities and Labour Services Pvt. Ltd Page | 3 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "