Income Tax Officer vs Registrar Of Companies And Ors.

Sumita Purkayastha, (Member Technical)

This Appeal has been filed by Dy. Commissioner of Income-tax , Circle 13(2), New Delhi invoking the provisions of Section 252(1) read with Sec.252(3) of the Companies Act, 2013 for restoration of the name of the Respondents Company M/s. D Ways Marketing Private Limited, H-51, Nanakpura, Moti Bagh-2, New Delhi 110021 in the register maintained by the Registrar of Companies, NCT of Delhi & Haryana.

As per the averments, M/s. D Ways Marketing Private Limited, New Delhi was incorporated on 04.12.2008 as a private limited company and has its registered office at H-51, Nanakpura, Moti Bagh-2, New Delhi 110021 having CIN No. 51101DL2008PTC185499. The Authorized share capital of the Company is Rs.1,00,000/- and paid up share capital of the Company is Rs. 1,00,000/-.

The directors of the company, being Mr. Israel Rajah and Mr. William Bond have been arrayed as Respondent No. 3 and Respondent No. 4 respectively.

It is submitted by the appellants that ITD System reflects that a payment during F.Y.2010-11 relevant to A.Y. 2011-12, the respondent company entered into transactions/ turnover amounting to Rs.51,85,611/-. The respondent company did not file ITR for AY 2011-12 and violated the provisions of the Income-tax Act by not filing the ITR and did not disclose all material facts necessary for assessment, hence the Appellant has reason to believe that respondent escaped assessment within the meaning of Section 147/ 148 of the Income-tax Act.

The Appellant issued notice dated 31.03.2018 u/Sec.148 of IT Act for AY 2011-12 to the respondent company. The case of respondent has been re-opened U/Sec.147 of the IT Act for framing assessment order, for recovering taxes due and for any further consequential proceedings against the company under the Income-tax Act. There was no response from the respondent-company to the said notice. Hence the Assessment Order was passed on 12.12.2018 u/sec.144 w/r sec.147 of the Income-tax Act against respondent company for the AY 2011-12. Accordingly the income-tax Dept raised demand of Rs.44,54,630/- against the respondent- company. Vide Demand Notice dated 18.06.2019, 27.06.2019 U/Sec.156 of the Income-tax Act.

After following due process, Penalty Order was passed by Appellant on 18.06.2019, 27.06.2019 and 18.06.2019 against the respondent-company imposing penalty of Rs.10,000/-, Rs.16,02,353/- and Rs.5,000/- respectively under Sec.271(1)(b), 271(1)0 and Section 271F and Demand Notices were issued to respondent company. Further, appellant submits that the respondent company also did not filed ITR for A.Y. 2012-13.

On perusal of the MCA website, the appellant has come to know that the name of the respondent company was struck off vide Notification dated 30.06.2017 at Sr. No.4502, in terms of provision of Section 248(1) of the Companies Act, 2013 read with Rule 7 and Rule 9 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 by the ROC.

It is submitted by the appellant that the name of the respondent company had been struck off by the ROC without enquiry and the same was not intimated to the Appellant, Assessing Officer Income-tax or the concerned Commissioner of Income Tax. The same could not be allowed to be invoked resulting in escapement of tax liability or any other liability on the company which seeks to get its name removed from the register of the Ld.

ROC.

The appellant submitted that the Income Tax department being aggrieved under the Section 252 of the companies Act 2013 by the removal of the name of the company from the register by the registrar of the company as for the reopening of assessment proceedings the company has to be in existence.

It is further submitted that since the respondent company has become non-existent entity, the respondent company and its directors are trying to escape the assessment proceedings and the liability that will arise out of the said proceedings.

The appellant has further submitted that in order to render assessment order valid in the eyes of Law and to enable the Appellant to take steps for recovery of taxes and for any further consequential proceedings, the respondent- company's name be restored to the Register of Companies as if the name of the comvspi ' ny was never struck off.

Denial to restore the name of the respondent company in the Register of the ROC will not only condone the wrong doing of the respondent company but it will also encourage of escapement of tax liabilities by such subterfuge which will be prejudicial to the interest of the revenue in the long

run. The service of notice to respondents has been made through publication in newspaper, but none appeared.

The respondents failed to appear before the Court to provide its defence. Hence, the respondents were proceeded ex-parte vide order dated

05.02.2020. Upon perusal of the documents and submissions made, this appeal is allowed. The Registrar of companies is directed to restore the name of the Respondent Company in their Register and also proceed to take such other and further penal action against the respondent in accordance with the statutory provisions. The name of the respondent Company shall then, as a consequence, stand restored to the Register of the Registrar of Companies, as if the name of the company had not been struck off in accordance with Section 248(1) of the Companies Act, 2013.

The appeal is disposed of accordingly.

Let the copy of the order he served to the parties.