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Judgment
PER BRAJESH KUMAR SINGH, AM,
This appeal by the Revenue is directed against the order dated 15.10.2025 of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the assessment order dated 31.03.2023 passed under section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) by the Income Tax Officer, Ward 17(1), Delhi (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2018-19.
Brief facts of the case: The AO noted that the assessee had sold an immovable property worth Rs. 7,80,00,000/- during the Financial Year 2017-18. A notice under Section 148A(b) dated 15.03.2022 was issued to the assessee, providing details of the transactions including TDS of Rs. 3,40,000 deducted under Section 194-IA. A subsequent notice under Section 148 was issued, but the assessee did not file its return of income. The AO noted that the assessee has neither filed its return nor submitted any reply and consequently, the AO treated the entire amount of Rs. 7,80,00,000/- as undisclosed receipts and added it to the total income of the assessee.
The relevant extract of the assessment order making the addition of Rs. 7,80,00,000/- is reproduced as below:
“ 5. The facts and circumstances of the case have been considered. As per ROC, ShriMohd. Farhan is amongst one of the Directors of the assessee company. Further, in view of the pending proceedings, an appeal before the Hon'ble NCLT has been filed for revival of the assessee company.
5.1During the course of proceedings, as the information and details were not forthcoming from the assessee, the same was called for u/s 133(6) of the Act from the two parties to whom the properties were sold. The information received from M/s Vishwas Electricals Pvt. Ltd. indicate that the property bearing No.B-41, Hosiery Complex, Noida has been sold on 24.07.2017 for a consideration of Rs. 3,90,00,000/-. The information received from M/s High Profile Softech P. Ltd. reveals that property bearing No.B-34, Hoseiry Complex, Noida has been sold on 20.06.2017 for a consideration of Rs.3,90,00,000/-. As the assessee has neither filed the return of income nor filed any details to indicate the treatment of sale consideration by way of giving details of LTCG, the whole of the consideration of Rs.7,80,00,000/- is treated as undisclosed receipts of the assessee and are assessed in its hands.
Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) deleted the said addition. The relevant extract of the same is reproduced as under:
“5.13It may be appreciated that during the course of popular proceedings, the assessing officer was requested to furnish details of the order of the NCLT with respect to the revival of the company which was strike off as mentioned supra. The assessing officer has applied vide letter dated 21/05/2025 that the matter was pending before the NCLT and the company was not revived so far.
It is not out of place to mention that nothing has been brought out on record that on the date of issue of notice under section 148 i.e. while assuming the jurisdiction and on the date of passing of the assessment order, the assessing officer has obtained revival of the assessee company from NCLT and such company was revived. Therefore, in absence of such revival order, the fact remains that the assessing officer has issued notice under section 148 and subsequently passed order under section 147 read with section 144 of the IT Act in the case of non-existent company. Therefore, considering the facts and circumstances of the case, submission of the assessee, findings of the assessing officer and respectfully following the decision of Hon'ble Supreme Court in the case of Maruti Suzuki India Ltd (supra), the grounds of appeal contested by the assessee at serial No. 2 is allowed.
6 Since the effective ground of appeal contested by the assessee for assumption of jurisdiction to issue notice under section 148 and subsequently passed order under section 147 read with section 144 is allowed in favour of the assessee as mentioned supra, grounds of appeal contested by the assessee at serial No. 1 and 3 rendered infructuous and academic. Therefore, grounds of appeal contested by the assessee at serial No. 1 and 3 are allowed for statistical purpose.
7 In the result, the appeal of the assessee is allowed.”
(emphasis supplied by us)
Aggrieved with the said order, the Revenue is in appeal before us on the following grounds of appeal:
“1.Whether, on the facts and in the circumstances of the case, and in law, the Ld. CIT.A has erred in holding that the reassessment proceedings initiated under Section 148 and the assessment order passed under Section 147 r.w.s. 144 of the Income Tax Act, 1961 are invalid, solely on the ground that the assessee company was struck off by the Registrar of Companies.
2.Whether, on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in holding reassessment proceedings invalid u/s 147/144 contrary to the ruling of Hon’ble Delhi High Court in the case of Ravinder Kumar Aggarwal v. ITΟ 2023 451 ITR 100 Del.
3.Whether, on the facts and in the circumstances of the case. and in law, the Ld. CIT(A) has erred in relying upon the judgment of the Hon’ble Supreme Court in PCIT v. Maruti Suzuki India Ltd. 2019 107 taxmann.com 375 SC, which is distinguishable on facts, as the said case pertained to amalgamation and not to the striking off of a company under the Companies Act.
4.Whether, on the facts and in the circumstances of the case, and in law, the Ld. CIT(A) has failed to consider that the assessee did not file any return of income in response to the notice issued under Section 148, nor furnished any explanation OR documentary evidence regarding the source and nature of Rs. 7.80 crore received from the sale of immovable property.
5.Whether, on the facts and in the circumstances of the case, and in law, the Ld. CIT(A) has erred in ignoring that the entire 5 sale consideration was verified through third party confirmations and TDS data, and that the addition made by the AO as undisclosed receipts was rightly brought to tax
6.That the appellant craves leave to add, alter, amend, OR withdraw any of the grounds of appeal at the time of hearing.”
During the course of hearing, the Ld. Sr. DR filed a reply from the AO stating that during the course of assessment proceedings, the assessee, vide its submission dated 01.03.2023, for the first time intimated that the company had been struck off from the records of the Registrar of Companies. Further, it was stated that accordingly, appeal before Hon’ble NCLT was filed on 31.03.2023 for revival of the same. The relevant extract of the reply of the AO is reproduced as under:
Further, the Ld. Sr. DR relied upon the grounds of appeal and relied upon the order of the Hon’ble Delhi High Court in the case of Ravinder Kumar Aggarwal v. ITO 2023-451 ITR 100 (Del), and submitted that relying upon the ratio of this decision, the notice u/s 148 of the Act dated 23.03.2022 and the consequent assessment order passed u/s 147 r.w.s. 144 of the Act dated 31.03.2023 were valid and as per law. In support of his contention, the Ld. AR submitted that in the present case, the assessee informed the Department only on 01.03.2023 about the striking off of the company, whereas the company was struck off on 08.08.2018. Further, the Ld Sr. DR submitted that the AO before passing the assessment order had filed an application on 31.03.2023 before the NCLT for the revival of the company, which was still pending before the NCLT. The Ld. DR submitted that AO had taken the necessary step for getting the company revived, which was still pending before the NCLT and therefore, the Revenue should be allowed to recover the demand against the assessee company for transaction occurring on F.Y. 2017-18, prior to the company getting struck off on 18.06.2018 i.e. in F.Y. 2018-19 relevant to A.Y. 2019-20.
On the other hand, the Ld. AR supported the order of the ld. CIT(A) and relied upon certain case laws in support of its submission that since the assessee company was struck off, when the impugned notice u/s 148 of the Act was issued on 23.03.2022 and therefore, the consequent assessment proceedings resulting in the assessment order u/s 147/144 of the Act dated 31.03.2023 was invalid since it was carried out against a non-existence person.
We have heard both the parties and perused the material available on record.
The public notice for striking off the company is on page no. 15 of the Ld. CIT(A) of the order, which is reproduced as under:
The name of the assessee company appears at Sr. No. 16620 of in Annexure – ‘A’ as referred in the above order.
Both sides have relied upon the case laws in support of their respective contentions as to whether in this case, the notice u/s 148 of the Act dated 23.03.2022 and the consequent assessment order dated 31.03.2023 was a valid/ notice/ order in view of the fact that during the entire assessment proceedings, the assessee company remained struck off. After perusing the decisions relied upon by the both the sides, we are of the considered view that the decision of the Hon’ble Delhi High Court in the case of Ravinder Kumar Aggarwal v. ITO (supra) is closest to the facts of the present case. To appreciate the facts of this case, a list of dates relevant to the issue in dispute is reproduced as under:
| 09.07.1993 | Company was incorporated |
| 18.06.2018 | Company was struck off by the ROC u/s 248(1) of the Companies Act, 2013 |
| 15.03.2022 | Notice u/s 148(A) (b) of the Act was issued |
| 21.03.2022 | Assessee filed its response inter-alia informing about the death of the single shareholder. |
| 23.03.2022 | Order u/s 148A(d) of the Act passed & notice u/s 148 of the Act issued. |
| 03.11.2022 | Reply by assessee filed during the re-assessment proceedings |
| 01.03.2023 | The assessee submitted before the AO during the course of reassessment proceedings. that the company METLON India P. Ltd. was struck off by the Registrar of Company and did not exist on the date of issue of notice under section 148(A)(b) of the Act. Further it was informed that major shareholder Mr. MohdRais who was holding 100% shares had also died on 11.04.2021. |
| 17.03.2023 | Vide reply dated 17.03.2023, the assessee has reiterated its earlier stand apart from citing certain case laws. |
| 31.03.2023 | Order u/s 147 r.w.s. 144 passed making an addition of Rs. 7,80,00,000/- |
In the case of Ravinder Kumar Aggarwal v. ITO (supra), the Hon’ble Delhi High Court had dismissed the writ petition filed by the said company wherein the learned counsel for the Petitioner had submitted that the order of the NCLT, restoring name of the Company in the register of companies on 25th September, 2019 is to no effect because as on 28th March, 2019, when the impugned notice was issued, the Company was admittedly struck off and the subsequent order restoring the Company would not cure the defect of issuance of impugned notice in the name of non-existent Company, on the date of issue.
In this regard, the head note of the order in the case of Hon’ble Delhi High Court in the case of Ravinder Kumar Aggarwal v. ITO (supra) is reproduced as under:
“Section 148 of the Income-tax Act, 1961, read with sections 248, 250 and 252 of the Companies Act, 2013 Income escaping assessment - Issue of notice (Struck off company) -Company was initially struck off by Ministry of Corporate Affairs on 30-6-2017 due to its default in filing its statutory return with ROC Notice under section 148 of Income-tax Act dated 28-3-2019 was issued to company Thereafter, name of company was restored by order passed by NCLT dated 25-9-2019-Petitioner, director of company, filed instant petition seeking quashing of impugned notice dated 28-3-2019 on ground that said notice was null and void, as it had been issued in name of struck off company Whether section 252(3) of Companies Act, 2013 expressly states that Tribunal's order directing restoration of a company will have effect of placing company in same position as if name of company had not been struck off from register of companies Held, yes Whether therefore, even on date of issuance of impugned notice, company would be deemed to be in existence Held, yes -Whether further, even section 250 of Companies Act, 2013 declares that, where a company is dissolved in consequence to it being struck off under section 248, it shall be deemed to continue to be in existence for purpose of discharging its liabilities Held, yes Whether, therefore, since NCLT upon realizing that detriment was caused to interest of Income-tax department due to striking off, restored company to enable department to recover its dues, impugned notice under section 148 of Income-tax Act, dated 28-3-2019, issued in name of company before its restoration was valid and justified - Held, yes [Paras 11 and 20] [In favour of revenue]” (emphasis supplied by us)
However, the facts in the present case to the aforesaid cited case is distinguishable as in the case of the assessee till the completion of the assessment order the company was not restored by the NCLT and as per records, the company is still to be restored, even though the AO had made an application before the NCLT for its restoration on 31.03.2023 i.e. on the date of passing of the assessment order in the case of assessee. Further, in the cited case, the AO in his rejoinder had stated that the Income-tax Department had filed an appeal before the NCLT for the restoration of the Company on 14th September, 2018 i.e., prior to issuance of impugned notice dated 28.03.2019 u/s 148 of the Act for the concerned assessment year wherein the Hon’ble Court held that by virtue of the order dated 25.03.2019 of the NCLT restoring the said company, the restoration of the said company would relate back to the date of striking off and the impugned notice will not suffer from any infirmity, whereas as stated above, the appeal for restoration in the case of assessee was filed by the department on 31.03.2023 on the date of passing of the assessment order and the assessee company was yet to be restored. Thus, as on date of the issue of notice u/s 148 of the Act dated 23.03.2022 and on the passing assessment order, the company was not restored by the NCLT and the notice u/s 148 of the Act dated 23.03.2022 and the passing of the assessment order on 31.03.2023 was on a non-existent person. Therefore, in the given facts of the case the decision of the Hon’ble Delhi High Court in the case of Ravinder Kumar Aggarwal v. ITO (supra) relied upon by the Revenue will not be applicable.
In fact, in the given facts of the case, the decision of the Hon’ble Gujarat High Court in the case of Chetan Chandrakant Kothari v. Income Tax Officer [2025] 170 taxmann.com 630 (Gujarat) relied upon by the Sr. AR holding such a proceedings to be bad in law will be applicable. In the case of Chetan Chandrakant Kothari v. Income Tax Officer (supra) the company was struck off on 07.01.2011 and the notice u/s 148 of the Act was issued on 29.03.2019 and the assessment order was passed on 01.12.2019. The relevant extract of the order is reproduced as under:
“7.In view of the above averments made on oath by the respondent, more particularly, when it is stated on oath that the petition is found to be in-order that the assessee company has already been 'struck off before issuance of the notice under Section 148 of the Act, we therefore, quash and set aside the impugned assessment order dated 01.12.2019 passed by the respondent-Assessing Officer under Section 144 read with Section 147 of the Income Tax Act, 1961. As the penalty proceedings are already stated to be have been dropped, no further order is required to be passed. The petition is accordingly disposed of. Notice is discharged.”
Respectfully, following the aforesaid order, we hold that, we hold that in the case of assessee the notice u/s 148 of the Act dated 23.03.2022 and the consequent assessment order dated 31.03.2023 on a non-existent person are bad in law. We, therefore, uphold the order of the Ld. CIT(A) in quashing the impugned assessment order. Ground no. 1 & 2 of the appeal are dismissed. In view of Ground no. 1 & 2 of the appeal being dismissed the other grounds of the appeal being Ground nos. 3 to 5 becomes academic and are left open in this case.
In the result, appeal of the Revenue is dismissed.