Income Tax Dept warns public against cash dealings of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty.

Appeal proceedings can continue against co. whose name has been struck off from register of ROC

High Court by impugned order dismissed appeal filed by the Income-tax Department on ground that it was rendered infructuous as name of respondent-company had been struck off from the register and the said company was dissolved and appeal filed against such Company which stood dissolved would not survive for its consideration on merits. Dept. filed special leave before the Supreme Court.

The Supreme Court held that the High Court failed to notice proviso (a) to section 560(5) of the Companies Act and further failed to notice Chapter XV of the Income-tax Act which dealt with 'liability in special cases' and its clause (L) which dealt with 'discontinuance of business or dissolution'.

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. Since the High Court did not decide the appeal keeping in view the aforementioned two relevant provisions, the impugned order who not legally sustainable and had to be set aside.

Therefore, impugned order was set aside and case was remanded to the High Court for deciding the appeal afresh on merits in accordance with law keeping in view the relevant provisions of the Companies Act and the Income-tax Act uninfluenced by any observations made by instant Court on merits.
Refer:CIT v. Gopal Shri Scrips (P.) Ltd. - [2019] 104 taxmann.com 192 (SC)

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