| COURT: | Supreme Court |
| CORAM: | Abhay Manohar Sapre J, Dinesh Maheshwari J |
| SECTION(S): | 560(5) Companies Act 1956 |
| GENRE: | Domestic Tax, Other Laws |
| CATCH WORDS: | defunct company, liability |
| COUNSEL: | A. N. S. Nadkarni |
| DATE: | March 12, 2019 (Date of pronouncement) |
| DATE: | March 15, 2019 (Date of publication) |
| AY: | - |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| Defunct companies: The fact that the assessee company stands dissolved as a defunct company u/s 560(5) of the Companies Act, 1956 does not mean that income-tax proceedings & appeals become infructuous. The liability against such companies has to be dealt with in accordance with s. 506(5) proviso (a) of the Companies Act and Chapter XV of the Income Tax Act which deal with "liability in special cases" and "discontinuance of business or dissolution" | |
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”. 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. 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
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