REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL  APPEAL No. 2922 OF 2019 (Arising out of S.L.P.(C) No.10639 of 2017)

Commissioner of Income  Tax, Jaipur ….Appellant(s)

VERSUS

M/s Gopal Shri Scrips Pvt.Ltd.             ….Respondent(s)

                 J U D G M E N T

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

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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 India­Income 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 260­A 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.

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:

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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 Respondent­assessee (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 sub­section(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 07.04.2011, 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 liberty 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.

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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 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

respondent­assessee 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 respondent­Company stands

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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 506(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 506 (5) of the Companies Act.  

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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 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

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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.         

                                    .………...................................J.                                    [ABHAY MANOHAR SAPRE]                                       

    …...……..................................J.              [DINESH MAHESHWARI]

New Delhi; March 12, 2019

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