A reassessment order passed in the name of a struck-off, non-existent entity is illegal and void.

By | July 16, 2026
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A reassessment order passed in the name of a struck-off, non-existent entity is illegal and void.

A reassessment order passed in the name of a struck-off, non-existent entity is illegal and void.

Issue

Whether a reassessment notice issued under section 148 and a subsequent assessment order passed under section 147 read with section 144 are legally sustainable if they are issued in the name of a company that had already been voluntarily struck off by the Registrar of Companies prior to the date of the notice.

Facts

  • The assessee-company filed its original return of income for the assessment year 2016-17, and the initial assessment was completed under the scrutiny provisions of section 143(3).

  • The assessee-company subsequently applied for voluntary striking off under the provisions of the Companies Act.

  • The Registrar of Companies (RoC) officially struck off the name of the company from the register, causing it to dissolve.

  • Subsequent to the company being struck off and dissolving, the Assessing Officer issued a notice under section 148 to reopen the assessment.

  • Following the notice, the Assessing Officer proceeded to pass a reassessment order under section 147 read with section 144 in the name of the dissolved company.

Decision

  • Held, yes: The issue was decided entirely in favor of the assessee, and the impugned reassessment order was quashed.

  • Jurisdictional Defect: Since the assessee-company had corporate existence prior to the date of the notice under section 148, the notice was issued to a non-existent entity.

  • Order Null and Void: Any reassessment notice or subsequent assessment order passed in the name of a non-existent corporate entity is inherently illegal, bad in law, and void ab initio.

Key Takeaways

  • Existence is a Prerequisite for Jurisdiction: The tax department cannot initiate proceedings, issue notices, or pass assessment orders against a dead person or a dissolved corporate entity that has ceased to exist in the eyes of the law.

  • Struck-Off Status vs. Reassessment: A voluntary striking off by the Registrar of Companies completely extinguishes the corporate persona. If the section 148 notice is issued after this date, the defect is fundamental and cannot be cured.

  • Fundamental Jurisdictional Error: An assessment on a non-existent entity is not a mere procedural irregularity that can be overlooked or corrected; it is a total absence of jurisdiction that invalidates the entire proceeding.

HIGH COURT OF BOMBAY
Zaheer Syed Abbas
v.
Union of India
B. P. COLABAWALLA and FIRDOSH P. POONIWALLA, JJ.
WRIT PETITION NO. 545 OF 2023
JUNE  15, 2026
Madhur Agrawal, Ms. Srija Singh and Aditya Shirke, Advs. for the Petitioner. Subir Kumar and Ms. Ashita Agarwal, Advs. for the Respondent.
ORDER
1. Rule. Respondents waive service. With the consent of the parties, Rule made returnable forthwith and the Petition is heard finally.
2. This Petition has been filed by the erstwhile director of a company called Cicero Realty Ventures Pvt. Ltd. (CRVPL) (since dissolved). By this Petition, the Petitioner has challenged:
(i) Notice dated 31st March, 2021 issued under Section 148 of the Income-tax Act, 1961 (“the Act”) for assessment year 2016-17; and
(ii) Order dated 30th March, 2022 passed under Section 144 read with Section 147 of the Act consequent to notice dated 31st March 2021.
3. The principal challenge is that the impugned notice dated 31st March, 2021 issued under Section 148 of the Act as well as the consequential assessment order dated 30th March, 2022 issued under Section 144 read with Section 147 of the Act has been passed in the name of CRVPL, a company which had ceased to exist prior thereto.
4. The facts in so far as relevant to the present petition are that CRVPL had applied for voluntary striking off under Section 248 of the Companies Act, 2013, on 03rd May 2017, before the Registrar of Companies. Pursuant thereto, vide order dated 02nd July 2018, the Registrar of Companies struck off the name of CRVPL from the Register of Companies.
5. Prior to its dissolution, CRVPL had filed its return of income for the relevant assessment year on 30th September 2016. Subsequently, the case was selected for scrutiny and two notices under Section 143(2) dated 19th September 2017 and Section 142(1) dated 24th January 2018 of the Act were issued to CRVPL to scrutinize the genuineness of the source of the share capital of the entity.
6. During the course of the assessment proceedings, the Petitioner, acting as the ex-director of CRVPL, informed the Assessing Officer by communications dated 30th November 2018 and 14th December 2018 that CRVPL had already been struck off and dissolved and therefore ceased to exist.
7. The assessment proceedings were concluded and an assessment order dated 26th December 2018 under Section 143(3) of the Act was passed in the name of CRVPL, accepting the returned income of the erstwhile CRVPL as “NIL”.
8. Subsequently, on 31st March 2021, the Assessing Officer issued the impugned notice under Section 148 of the Act seeking to reopen the assessment of the erstwhile CRVPL, particularly to scrutinize the genuineness of the source of share capital of CRVPL and the applicability of Section 56(2) (vii)(b) of the Act.
9. In response, the Petitioner, being the ex-director of CRVPL, vide his letter dated 07th June, 2021, once again brought to the notice of the Revenue that CRVPL had ceased to exist and had already been dissolved and that the same was also brought to the notice of Assessing Officer during the course of assessment proceedings, pursuant to which an assessment order under Section 143(3) of the Act was already passed in the name of erstwhile CRVPL, and placed reliance on judicial precedents in support of his contention (CRVPL).
10. Notwithstanding the above, the Assessing Officer proceeded to pass the impugned assessment order dated 30th March 2022 under Section 144, read with Section 147, of the Act determining the total income of CRVPL at Rs. 25,66,70,000/- and raising a consequential tax demand of Rs. 16,25,55,840/- by issuing a demand notice under Section 156 of the Act in the name of the dissolved company (CRVPL).
11. The Petitioner, being the ex-director of CRVPL, thereafter filed the present petition challenging the impugned notice under Section 148 of the Act as well as the consequential assessment order under Section 144 read with Section 147 of the Act.
12. Mr. Agrawal, learned counsel appearing on behalf of the Petitioner, at the outset submitted that the undisputed fact is that both, the impugned reopening notice is issued, and the impugned assessment order is passed, in the name of a non-existent entity which had ceased to exist on account of its dissolution. Mr. Agrawal further stated that the Petitioner had, during the course of original assessment proceedings itself [in case of CRVPL], pointed out to the Assessing Officer that CRVPL has been dissolved and ceased to exist. Nevertheless, Respondent No. 2 had passed the original assessment order in the name of CRVPL which was not in existence.
13. Relying on judgment of the Hon’ble Apex Court in Pr. CIT v. Maruti Suzuki India Ltd 416 ITR 613 (SC), and order of this High Court in Jitendra Chandralal Navlani v. Union of India (Bombay), Mr. Agrawal submitted that once a company is dissolved, it ceases to exist in the eyes of law and that it cannot be thereafter regarded as a ‘person’ in terms of Section 2(31) of the Act against whom assessment proceedings can be initiated and an assessment order can be passed. He therefore submitted that in view of the settled position of law, the initiation of reassessment proceedings against CRVPL, a non-existent entity, is void ab initio. Consequently, the notice dated 31st March 2021 issued under Section 148 of the Act and the assessment order dated 30th March 2022 passed pursuant thereto cannot be sustained and ought to be quashed and set aside.
14. Per contra, Mr. Subir Kumar, learned counsel appearing on behalf of the Revenue, sought the leave of the Court to take appropriate steps under the Companies Act to apply to the appropriate forum to restore the company to the register and thereafter take such steps as available in law under the provisions of the Act. He also relied upon Section 250 of the Companies Act, 2013 to contend that liability of the dissolved entity continues.
15. We have heard both parties at length and also perused the documents, proceedings and affidavits filed by the parties in the present petition.
16. As mentioned earlier, the first challenge to the notice issued under Section 148 of the Act as well as to the assessment order is that the same is issued against a non-existent entity rendering the same illegal and bad in-law. As far as this issue is concerned, we find that from the facts of the present case that the erstwhile company ceased to exist with effect from 2nd July 2018. This is an undisputed position. Yet the notice under Section 148 has been issued to the erstwhile company on 31st March 2021.
17. We find that the issue regarding the invalidity of a notice issued to a non-existent entity is no longer res-integra and is covered by the decision of the Hon’ble Supreme Court in the case of Maruti Suzuki India Ltd. (supra). The Supreme Court, after considering the law on the subject (in the SCC report), held as under:
“36. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a coordinate Bench of two learned Judges which dismissed the appeal of the Revenue in Spice Enfotainment [CIT v. Spice Enfotainment Ltd. , (2020) 18 SCC 353] on 2-112017. The decision in Spice Enfotainment [CIT v. Spice Enfotainment Ltd. , (2020) 18 SCC 353] has been followed in the case of the respondent while dismissing the special leave petition for AY 20112012. In doing so, this Court has relied on the in Spice Enfotainment [CIT v. Spice Enfotainment Ltd. , (2020) 18 SCC 353]
37. We find no reason to take a different view. There is a value which the Court must abide by in promoting the interest of certainty in tax litigation. The view which has been taken by this Court in relation to the respondent for AY 2011-2012 must, in our view be adopted in respect of the present appeal which relates to AY 2012-2013. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable.”
18. Further, this Court in the case of Jitendra Chandralal Navlani(supra), has taken a similar view when a petition was filed by the ex-director of a company called Addler Security Systems Pvt. Ltd. (since dissolved), the entity in the name of which the reassessment notice under Section 148 of the Act was issued.
19. Considering the law laid down as discussed above, we are clearly of the view that in the present case, the notice issued under Section 148 to the erstwhile company, namely, Cicero Realty Venture Private Limited, cannot be allowed to stand and is hereby quashed and set aside. Once we have quashed the notice issued under Section 148, then naturally the impugned assessment order dated 30th March, 2022 also cannot be allowed to stand and is hereby quashed and set aside. This is for the simple reason that the said assessment order emanates from the notice issued under Section 148 of the Act. Also, the provisions of Section 250 of the Companies Act would not be applicable because on the date of the reopening notice, there was no liability/obligations to be fulfilled by the company. Therefore, the notice in the name of company which has already been struck off before the date of reopening is bad in law.
20. As regards the contention of Mr. Subir Kumar, learned counsel appearing on behalf of the Respondents, that steps may be allowed to be taken to revive the erstwhile entity before an appropriate forum, we are not making any observations regarding the same. If what Mr. Subir Kumar stated, as noted above, can be done in law, he may do so. At the same time, the rights and contentions of Petitioner also are kept open to defend any such action that may be taken by the Revenue, including the contentions with respect to the impugned notice as well as the impugned assessment order that the Revenue may seek to take pursuant to any such action.
21. Rule is made absolute in the aforesaid terms, and the Writ Petition is also disposed of in terms thereof. However, in the facts and circumstances of the present case, there shall be no order as to costs.
22. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.