Income Tax Office Ward 24(4) vs Registrar Of Companies And Ors

Dr. V.K. Subburaj, Member (T)

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, viz. M/s. Surmount Sales Pvt. Ltd., in the Register of Companies maintained by the Registrar of Companies ("RoC"), Respondent No. 1.

Service 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 the information available, it is seen that assessee company had deposited cash during the demonetization period i.e. F.Y. 2016-17 relevant to A.Y. 2017-18, and in spite of the aforesaid the assessee company did not file its return of income for A.Y. 2017-18.

That assessing officer issued notice under Section 142(1) of the Act directing the assessee company to furnish requisite information and documents for the purpose of assessment for A.Y. 2017-18. That neither the director nor any other representative of the company replied to the said notices. The relevant provision of Section 142(1) of the Act has been produced below:

"Enquiry before assessment.

(1) For the purpose of making an assessment under this Act the Income-tax Officer may serve on any person who has made a return under Section 139 or upon whom a notice has been served under sub-section (2) of Section 139 (whether an return has been made or not) a notice requiring him, on a date to be therein specified, (i) to produce, or cause to be produced, such accounts or documents as the Income-tax Officer may require, or (ii) to furnish in writing and verified in the prescribed manner information in such form and on such points or matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the Income-tax Officer may require:

Provided that --

(a) the previous approval of the Inspecting Assistant Commissioner shall be obtained before requiring the assessee to furnish a statement of all assets and liabilities not included in the accounts;

(b) the Income-tax Officer shall not require the production of any accounts relating to a period more than three years prior to the previous year."

On further enquiry, it was found that the assessee is not in existence and its name has been struck off by the Ld. ROC from the Registrar of Companies.

The appellant submits that he/she was not intimated about the proposed action of removal or striking off the name of the company and his/her objections were not sought in relation to this matter in accordance with the companies Act, 2013.

That the procedure laid down under Section 252 of the Companies Act, 2013 for getting the name of the company removed from the register of the Ld. ROC cannot be allowed to be invoked so as to result in escapement of tax liability or any other liability.

That the assessee company is mandatorily required to discharge its liabilities and obligations. In this regard, reference be made to Section 252 of the Companies Act, 2013 which is reproduced below:

"250. Effect of company notified as dissolved

Where a company stands dissolved under Section 248, it shall on and from the date mentioned in the notice under sub-section (5) of that section cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been cancelled from such date except for the purpose of realizing the amount due to the company and for the payment or discharge of the liabilities or obligations of the company."

That the income received by the assessee is required to be verified and assessed in the hands of the assessee under the Income Tax Act, 1961. It is submitted that to undertake the assessment proceedings, the name of the assessee has to be restored in the register of the Ld. ROC.

That the cause of action arose when the assessing officer learnt that the name of the assessee company stood struck off from the Register of Companies. For framing the assessment order and for recovering the taxes due, it is necessary that the Respondent 2's name be restored to the register maintained by the ROC.

In view of the grounds raised by the Appellant which remain un-rebutted, 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.