ITAT Nullifies Tax Order on Struck-Off Company: Assessment Declared Invalid

The applicant, Ultima Realtors Pvt. Ltd filed an appeal against a tax order passed by the Income Tax Department. The applicant filed its ITR for the financial year 2013-14 (AY 2014-15), which was processed under section 143(1) of the Act on 27/11/2014. Therefore, the assessee filed the revised ITR on 28/03/2016 , which was also processed u/s 143(1) of the Act on 25/04/2016.

Later, on June 23, 2018, the company was struck off and no longer existed. Even though the company did not exist anymore, the Income Tax Department issued a notice under Section 148 (for reopening assessment) on 31 March 2021.

Objections of Assessee

The grievance of the assessee was as follows:

• The CIT(A) stated that the appeal filed by the appellant was not maintainable under section 246A of the Income Tax Act.
• The CIT(A) passed the order, even though the assessee had made written submissions.
• The assessee was not given a chance to be heard even after submitting a written request, which is a violation of natural justice.
• The Order was passed on a non-existent company.
• The reassessment order was Invalid
• The AO wrongly added Rs 13,13,77,096, as income, which the company never received or was receivable.
• Disallowance of Rs 10,17,22,904 on loss of valuable asset.
• AO passed an ex parte order and ignored the submissions made by the applicant.
• AO failed to dispose of objections to reopening, which is again a violation of natural justice.
• Reopening and reassessment should not have been upheld.
• levy of interest under Sections 234A and 234B

The CIT(A) dismissed the appeal because the company was non-existent, so the appeal itself was not valid.

ITAT Decision

The Income Tax Appellate Tribunal (ITAT) disagreed with the CIT(A). As per ITAT, “Considering the facts of the case in totality, we have no hesitation in holding that the assessment order and the notice, both, are bad in law, as the same are in the name of a non-existing entity. We accordingly annul the impugned assessment order and allow the appeal of the assessee”.

Therefore, the ITAT allowed the appeal of the assessee and cancelled the order.