Income Tax Office Ward 23(2) vs Registrar Of Companies And Ors

Dr. P.S.N. Prasad, J

This appeal has been filed by Income Tax Authority invoking the provisions of Section 252 of the Companies Act, 2013 for restoration of the name of the Respondent No. 2 company, Shiv Shakti Infra Solutions Pvt. Ltd. in the Register of Companies maintained by the Registrar of Companies ("RoC"), Respondent no. 1.

Service of notice was duly effected on the Respondents. Other than the RoC, none appeared on behalf of the other Respondents to oppose the prayer made by the Appellant. The RoC submitted that they have no objections to the prayer of the Appellant being granted by this Tribunal.

Vide proceedings initiated by the Ministry of Corporate Affairs, through the office of the RoC several names of companies were struck off for want of statutory filings. Respondent No. 2 company, which had also not filed any returns or financial statements was duly struck off from the register of companies.

Invoking the provision of section 252 of the Act, the Income Tax Dept. prays for its restoration in order to carry out proceedings initiated against Respondent 2. As per averments made in the appeal the information available with the Revenue through NMS/ITD Software, information from AIR/CIB Statements and Individual Transaction Statements (ITS) it is observed that the respondent company has undisclosed cash transactions during the financial year 2011-12 relevant to the A.Y. 2012-13.

As per the Appellant, the respondent company had filed its ITR for A.Y. 2012-13 on 28.08.2012 declaring a loss of Rs. 26,000/- and the said return was processed under section 143(1), however information was received from Dy. Director of Income Tax (Investigation)- II, Jaipur vide communication dated 11.03.2019, informing that the credit entries in the Bank Account of the Respondent Company during the financial year 2011-12 relevant to A.Y. 2012-13 amounting to Rs, 20,75,000/- by cheque and Rs. 4,00,000/- in cash are unexplained.

It is further contended by the Appellant that the respondent company did not disclose fully and truly all the material particulars required for completing the necessary assessment, the Assessing Officer has reason to believe that an substantial amount has escaped assessment within the meaning of section 147/148 of the I.T. Act and has not been brought under tax for the A.Y. 2012-13, thereby rendering the company liable for consequences under Income Tax Act, 1961, and entitling the Revenue to initiate proceedings against the company. Thus, prima facie, there appears tax evasion which requires action in accordance with law.

Therefore, notice dated 26.03.2019 under section 142(1) of the I.T. Act for the A.Y. 2017-18 has been issued to the respondent company. The case of the respondent company has been re-opened under section 147 of the I.T. Act for framing the assessment order, for recovering the taxes due and for any further consequential proceeding against the company.

The Respondent No. 2 Company did not disclose fully and truly all material facts necessary for assessment thus escaped assessment within the meaning of section 147/148 of the Income Tax Act, 1961.

The Grievance of the Income Tax Department is that the name of the Respondent company had been struck off by the RoC thus, seriously affecting the assessment proceedings. It is submitted that "Strike Off status of the company will affect the validity of the assessment order. For framing the assessment order, for recovering the tax dues and for any further consequential proceedings against the company under the I.T. Act, it is just and equitable and in public interest that the name of the respondent company be restored to the register of companies as if the name of the company had not been struck off from the Register of Companies.

Ld. Counsel for the Income Tax Submits that the aforesaid facts necessitate restoration of the name of the Respondent Company in the Register of Companies to proceed further in accordance with law. In view of the grounds raised by the applicant being an aggrieved person, their prayer can be entertained U/S 252(3) of the Companies Act.

The Respondents' are ex-parte and in view of the grounds raised by the Appellant which remain unrebutted, their prayer merits consideration. The appeal is therefore allowed. The RoC is therefore directed to restore the name of Respondent 2 in its register and also proceed to take such other and further penal action against the respondents in accordance with the statutory provisions.

We, however, make it clear that this Bench has only directed restoration of the name of the appellant company in the Register of Companies maintained by the Roc on the basis of averments made in the petition and have in no way endorsed or adjudicated about the Applicant's entitlement to recover any amount as tax etc. which shall be adjudicated by the Department subject to the laws of limitation governing such recoveries. Charges involved in seeking restoration of the company's name with the office of the ROC shall be borne by the applicant. Petition is disposed of in terms of the above. Compliance be made with the ROC within 30 days.