Income Tax Officer vs Registrar Of Companies

Rahul Bhatnagar, Hon’ble Member (Technical)

The instant company appeal is filed by and through the Income Tax Officer, Circle 22(3), New Delhi, (‘appellant’), under Section 252(1) of the Companies Act, 2013 (‘the Act’) read with Rules of Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 seeking restoration of the name of M/s. Sarvin Buildwell Private Limited (‘the company’/ ‘Respondent No.2’), which was struck off by the Registrar of Companies, NCT of Delhi and Haryana vide Form STK7 dated 08.08.2018 (‘Respondent No.1) herein with the following prayers:-

a) To pass an order restoring the name of the Respondent Company in the Register of the Registrar of Companies;

b) To quash the order/notification of the Ld. ROC which removed the name of the Respondent Company from the Register of Companies;

c) To grant an ad-interim stay on the operation of the impugned order/notification of the ROC;

d) Any other relief which this Hon’ble Tribunal may deem fit and proper is awaited in favor of the appellant in the facts and circumstances of the case.

Briefly stated the facts of the present case, as averred by the appellant in the instant appeal which are relevant to the issue in question, are that the Respondent No. 2 Company i.e., M/s. Sarvin Buildwell Private Limited was incorporated on 03.11.2010 bearing CIN: U45204DL2010PTC210147 and PAN: AAPCS1642A. This Tribunal is having jurisdiction over the Respondent No. 2 Company as the registered office of the Respondent No. 2 Company is situated at House No. 954 G Street No. 3, Near Mother Dairy Shop Uttam Nagar, New Delhi 110059. The Appellant stated that the AY 2015-16 had escaped assessment thereby rendering the company liable to consequences under Income Tax Act, 1961.

Further, it was stated that the Respondent No. 2 Company and its directors i.e., Respondent No. 3 and Respondent No. 4 had failed to carry out their obligations and violated provisions of Income Tax Act 1961. It was further stated that proceedings were initiated against the Respondent No. 2 Company and notices under section 148 of Income Tax Act, 1961 were issued against the Respondent No.2 Company on 31.03.2021 for the Assessment Year 2015-16.

The Appellant also stated that the demand Notice under Section 156 of the Income Tax Act were issued on 10.03.2022 for A.Y. 2015-16 raising demand of Rs. 1,12,19,350/-. It was also stated that the appellant came to know from the MCA portal that the said Respondent No. 2 Company has been struck off by the Respondent No 1, vide Form STK7 dated 08.08.2018, wherein the Respondent No. 2 Company’s name appears at Serial No.18564.

Heard the Appellant. Record has been thoroughly perused. We observe that the appellant in order to sustain his case, has placed reliance on the following documents: -

a) Copy of the MCA Master data of the Respondent No.2 Company.

b) Copy of the Notices dated 31.03.2021 issued under Section 148 of the Income Tax Act, 1961 bearing no. ITBA/AST/S/148/2020-21/1031987061(1) for Assessment Year 2015-16.

c) Copy of Assessment Order under Section 147 read with Section 144 and Section 144 B of the Income Tax Act, 1961 dated 10.03.2022 for A.Y. 2015-16.

d) Copy of Notice of Demand under Section 156 of the Income Tax Act, 1961 dated 10.03.2022 for A.Y. 2015-16.

e) Copy of Notice of Striking off the office of Registrar of Company available on website of Ministry of Corporate Affairs. (Form No. STK-7 dated 08.08.2018)

This Tribunal vide order dated 30.05.2022, directed the appellant to issue notices to the respondents by way of publication. The appellant in compliance of the said order had filed affidavit of service and publication dated 09.07.2022 in the newspaper evidencing the service being affected to the Respondents. However, vide order dated 13.06.2023 none for the Respondent No. 2 Company, Respondent No. 3 and Respondent No. 4 (‘Directors’) have appeared, in spite of the service of notice made to respondents through publication in newspapers.

During the course of hearing of the instant appeal, the Ld. Counsel for the ROC i.e., Respondent No.1 appeared and submitted that they are having instructions that they need not oppose the present appeal filed by the Income Tax Department under Section 252 of the Companies Act, 2013.

At this juncture, it will be advantageous to examine the requirement of Section 252 (3) of the Companies Act, 2016 insofar as grant of relief to  the  appellant  is  concerned.  The  Section  252  (3)  of  the  Act  is reproduced below for better appreciation: “252. Appeal to Tribunal. –

(1) ………………………

(2) ……………………………

(3) If a company, or any member or creditor or workmen thereof feels aggrieved by the company having its name struck off from the register of companies, the Tribunal on an application made by the company, member, creditor or workman before the expiry of twenty years from the publication in the Official Gazette of the notice under subsection (5) of Section 248 may, if satisfied that the company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored to the register of companies, order the name of the company to be restored to the register of companies, and the Tribunal may, by the order, give such other directions and make such provisions as deemed just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off from the register of companies.”

Section 252 (3) of the Companies Act, 2013 shows that if a company or any member or creditor feels aggrieved, they would also be competent to file an ‘Appeal’ against the order of the Registrar of Companies before the expiry of twenty years from the date of publication of order in the Official Gazette. Further, Section 252(3) of the Companies Act, 2013 visualises that one of the three conditions are required to be fulfilled before exercising jurisdiction to restore a company to the register of companies on the file of the Registrar of Companies. (i) That the company at the time of its name was struck off was carrying on business (ii) or it was in operation (iii) or it is otherwise just that the name of the company be restored on the register.

Considering the facts and circumstances of the case before us and the averments as made by the appellant, this Tribunal is of the view that fairness and justice go hand in hand and so this Tribunal must weigh the requirement of being just from the lens of fairness and justice based on the reasons put forth by the appellant in the instant appeal. It is to be borne in mind that the presence of the word ‘or otherwise’ signifies that even if the Company was not carrying on any business or was not in operation at the time of striking off, it is still open to the Tribunal to order restoration if it appears to it to be ‘otherwise’ ‘just’. Further, it is pertinent to be mentioned that the term Creditor in Section 252 of the Companies Act, 2013 ought to be construed widely so as to include a ‘creditor’ whose debt was contingent or prospective.

At this juncture, it is relevant to refer the citation of ‘Sidhant Garg and Anr.’ V. ‘Registrar of Companies and Ors.’ reported in (2012) 171 Comp.Cas. 326, wherein the Hon’ble High Court of Delhi held that, “the word “just” would mean that it is fair and prudent from a commercial point of view to restore the Company and that the Court has to examine the concept of ‘justness’ not exclusively from the perspective of a creditor or a member or a debtor but from the perspective of the society as a whole.”

This is an appeal filed by the Income Tax Department and thus, revenue of the Government is involved. We are of the considered view that there is substance in the contention of the Appellant that demand of Rs. 1,12,19,350/- is pending for the A.Y. 2015-16, against the Respondent No. 2 Company as assessed by the appellant. Accordingly, the appellant succeeds in representing that the appellant is the creditor of the Respondent No. 2 Company who is aggrieved against the striking of Respondent No. 2 Company’s name vide Registrar of Companies’ order dated 08.08.2018 and established before this Tribunal that there is a cogent and convincing reason as to why the name of the Respondent No. 2 Company be restored in the register of companies maintained by the Registrar of Companies.

Accordingly, we are of the considered view that it is just and equitable to restore the name of the Respondent No. 2 Company i.e., M/s. Sarvin Buildwell Private Limited having CIN: U45204DL2010PTC210147 in the register of companies maintained by the Registrar of Companies, NCT of Delhi and Haryana.

The Registrar of Companies, NCT of Delhi & Haryana is therefore directed to restore the name of the Respondent No. 2 Company in their Register and also proceed to take such other and further penal action against the respondent in accordance with the statutory provisions. As a consequence, the name of the Respondent Company shall, 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.

Accordingly, the instant company i.e., Appeal No. 58/252/ND/2022 stands allowed.

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