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), Shama India Constructions 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, and one Director. Service was also effected through publication in Hindi newspaper "Jansatta", Delhi edition dated 09.12.2019 (Company's name appears at Sr. No. 13) & English Newspaper "Financial Express" Delhi edition dated 09.12.2019 (Company's name appears at Sr. No. 13). During the hearing, the Ld. Counsel for the Appellant (IT Dept.) and Ld. ARoC appeared. None appeared on behalf of Respondent Nos. 2 to 4 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 30.06.2017.

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, Company was incorporated on 30.06.2009 having registered address at 226, 2nd Floor, Living Style Mall, Jasola Vihar, New Delhi-110025.

IT Dept. has submitted that the Respondent Company No. 2 had entered into cash transactions amounting to Rs. 1,20,000 for the period relevant to AY 2011-12. The Company did not submit IT Return for AY 2011-12. A show cause notice was sent to the Company on 14.11.2018 by Speed post and also through mail, fixing the case for 22.11.2018 but nobody from the Respondent Company attended the case. Finally, the Appellant passed the Assessment order for AY 2011-12 with a Tax Demand of Rs. 1,03,083. Subsequently, penalties of Rs. 10,000, Rs. 5000 and Rs. 37,080 were also imposed after reopening the case under Section 147 of IT Act as the case was getting time barred as on 31.12.2018.

It is submitted by the IT Dept. that 'Strike Off status of the Company will affect the validity of the assessment order and penalty proceedings. For framing the assessment order, for recovering the tax dues and for any further consequential proceedings under the IT Act, it is just and equitable and in public interest that the name of the Company be restored to the Register as if the name of the Company had not been struck off from the Register.

Ld. Counsel for the IT Dept. submits that the aforesaid facts (para 5) of tax dues necessitate restoration of the name of the Company in the Register to proceed further in accordance with law. 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 averment made in the memo of appeal filed by the Appellant and the submissions made by the Ld. Counsels appearing for the Appellant (IT Dept) as well as ARoC. We find that ARoC has not raised any objection. The reasons for restoring the Company is that an amount of Rs. 1,03,083 and penalty are recoverable by IT Dept. Therefore, we are of the considered view that this appeal is liable to be allowed. Accordingly, the appeal is allowed and we hereby set aside the order dated 30.06.2017 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 4 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.