Income Tax Officer vs Registrar Of Companies And Ors

Kapal Kumar Vohra, Member (T)

This Appeal has been filed by Income Tax (IT) Dept. invoking the provisions of Section 252 of the Companies Act, 2013 (The Act) for restoration of the name of the Respondent No. 2 Company (the Company), Milkyway Agrisystems India Pvt. Ltd. in the Register of Companies (Register) maintained by the Registrar of Companies (RoC), Respondent No. 1.

Service was duly effected on the RoC. Service was also effected upon the Company and Directors through publication in Hindi newspaper 'Jansatta', Delhi edition dated 09.12.2019 (The Company name appears at Sr. No. 17) & English Newspaper "Financial Express' Delhi edition dated 09.12.2019 (The Company name appears at Sr. No. 17). During the hearing, the Ld. Counsel for the Appellant (IT Dept.) and Ld. ARoC appeared. None appeared on behalf of Respondent Nos. 2 to 5 to oppose the prayer made by the Appellant.

Ministry of Corporate Affairs, through the office of the RoC, had struck off names of several companies from Register for want of filing Statutory Returns. Name of the Company (Respondent No. 2), was duly struck off from the Register on 01.09.2017.

Invoking the provision of Section 252 of the Act, the IT Dept. prayed for the restoration of the name of the Company to the Register maintained by the RoC in order to effectively carry out tax proceedings initiated against the Company. As per averments, Respondent Company was incorporated on 31.05.1994 having registered address at B-196, Surajmal Vihar, Delhi-110092. As per the data available with the IT Dept, it was observed that the Company had made cash transactions between 9th November, 2016 and 30th December 2016 to the tune of Rs. 35,98,500 in its bank account with Karnataka Bank. The Company was asked by the IT Dept. to prepare a true and correct return of its income in respect of AY 2017-18 on 28.11.2017.

It is submitted by the IT Dept. that for framing the assessment order, for recovering the tax dues and for any further consequential proceedings against the Company under the IT Act, it is just and equitable and in public interest that the name of the Respondent Company be restored to the Register as if the name of the Company had not been struck off from the Register. In view of the grounds raised by the Appellant, being an aggrieved person, the prayer can be entertained u/s 252(1) read with Section 252(3) of the Act.

We have gone through the averments made in the memo of appeal filed by the Appellant (IT Dept.) and the submissions made by the Ld. Counsels appearing for the IT Dept. as well as ARoC. We observe that a large amount of Rs. 35,98,500 has been deposited as cash in the bank account by the Company during the short span of less than two months which necessitates due enquiry, assessment and recovery of tax by IT Dept. after restoration of name of the Company in the Register. Accordingly, the appeal is allowed and we hereby set aside the order dated 01.09.2017 of ARoC by which the name of the Company was struck off.

The RoC is directed to restore the name of the Company in their Register and also proceed to take such other and further penal action against the Respondent Nos. 2 to 5 in accordance with the statutory provisions if required.

We, however, make it clear that this Bench has only directed restoration of the name of the Company in the Register maintained by the RoC on the basis of averments made in the Appeal and in no way endorses IT Dept.'s entitlement to recover which shall be adjudicated by the IT Dept. subject to the laws of limitation and other laws governing such recoveries. Compliance be made with the RoC within 30 days.