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

- **Citation:** [2019] 4 S.C.R. 704
- **Court:** Supreme Court of India
- **Decided:** 2019-03-12
- **Case number:** Civil Appeal No.2922 of 2019
- **Bench:** Abhay Manohar Sapre, Dinesh Maheshwari
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commissioner-of-income-tax-jaipur-v-m-s-gopal-shri-scrips-pvt-ltd-33526
- **Pages:** 5

## Headnote

Income Tax Act, 1961 - s.260A and Chapter XV - Companies
Act, 1956 - s.560 - High Court dismissed the appeal on the ground
that it had become infructuous as the name of the respondentassessee (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
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
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)
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
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]
 [2019] 4 S.C.R. 704
704
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3. These provisions provide as to how and in what manner
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
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
tax Act. [Para 17] [707-G-H; 708-A]

## Text

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SUPREME COURT REPORTS
[2019] 4 S.C.R.
COMMISSIONER OF INCOME TAX, JAIPUR
v.
 M/S GOPAL SHRI SCRIPS PVT. LTD.
(Civil Appeal No.2922 of 2019)
MARCH 12, 2019
 [ABHAY MANOHAR SAPRE AND
DINESH MAHESHWARI, JJ.]
Income Tax Act, 1961 - s.260A and Chapter XV - Companies
Act, 1956 - s.560 - High Court dismissed the appeal on the ground
that it had become infructuous as the name of the respondentassessee (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
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
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)
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
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]
 [2019] 4 S.C.R. 704
704
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3. These provisions provide as to how and in what manner
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
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
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
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
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
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
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.
COMMISSIONER OF INCOME TAX, JAIPUR v. M/S GOPAL
SHRI SCRIPS PVT. LTD.
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SUPREME COURT REPORTS
[2019] 4 S.C.R.
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
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.
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.
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.
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
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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 respondent-assessee 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
respondent-Company stands 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 560(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 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.
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
COMMISSIONER OF INCOME TAX, JAIPUR v. M/S GOPAL
SHRI SCRIPS PVT. LTD. [ABHAY MANOHAR SAPRE, J.]
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SUPREME COURT REPORTS
[2019] 4 S.C.R.
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
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