COMMISSIONER OF INCOME TAX, JAIPURversusM/S GOPAL SHRI SCRIPS PVT. LTD.

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


A               COMMISSIONER OF INCOME TAX, JAIPUR
                                        v.
                    M/S GOPAL SHRI SCRIPS PVT. LTD.
                         (Civil Appeal No.2922 of 2019)
B                           MARCH 12, 2019
                     [ABHAY MANOHAR SAPRE AND
                       DINESH MAHESHWARI, JJ.]

            Income Tax Act, 1961 – s.260A and Chapter XV – Companies
C     Act, 1956 – s.560 – High Court dismissed the appeal on the ground
      that it had become infructuous as the name of the respondent-
      assessee (company) was struck off from the register of the company
      u/s.560(5) of the Companies Act, 1956 – Propriety of – Held: High
      Court was wrong in dismissing the appeal rendering it infructuous
D     as it did not decide the appeal keeping in view the two relevant
      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 provisions specifically deal with the cases of
      the Companies, whose name has been struck off u/s. 560(5) of the
E     Companies Act – Thus, order of the High Court not legally
      sustainable – Accordingly, case remanded to the High Court for
      deciding the appeal afresh.
            Remanding the matter to the High Court, the Court
            HELD: 1. The High Court failed to notice Section 560 (5)
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      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”. [Para 13] [707-D]
            2. The aforementioned two provisions, namely, one under
G     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.
      [Para 14] [707-E]

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                                       704
  COMMISSIONER OF INCOME TAX, JAIPUR v. M/S GOPAL                           705
              SHRI SCRIPS PVT. LTD.

       3. These provisions provide as to how and in what manner             A
the liability against such Company arising under the Companies
Act, 1956 and under the Income Tax Act, 1961 is required 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            B
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 relevant provisions of Companies Act and the Income                C
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     D
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                            E

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


A           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
B           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.
C             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.
D           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
E           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.”

F            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.
G
            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


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  COMMISSIONER OF INCOME TAX, JAIPUR v. M/S GOPAL                          707
   SHRI SCRIPS PVT. LTD. [ABHAY MANOHAR SAPRE, J.]

the case to the High Court for deciding the appeal afresh on merits in     A
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       B
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      C
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    D
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          E
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.                     F
       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       G
remanded to the High Court for deciding the appeal afresh on merits in
accordance with law keeping in view the relevant provisions of


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


A     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
B     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


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