Income Tax Officer Ward 12(3) vs Registrar Of Companies And Ors.

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. Gorja Builders Pvt. Ltd. in the Register of Companies maintained by the Registrar of Companies

(“RoCâ€​), Respondent no.l.

Service of notice 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 no. 2. As per averments, M/s. Gorja Builders Pvt. Ltd. is incorporated on 03.09.2004 under the Companies Act, 1956. That at the time of

strike off the registered office of the Assessee was at Shop No. 14-21, NN Mall, Manglam Place, Sector-3, Rohini, New Delhi-110085.

The Assessee Company has not filed return of income for the assessment year 2017-18. Pertinent here is the fact that the Assessee is a Company

and is mandatorily required to file its return of income under Section 139(1) of the Income Tax Act, 1961.

From the Information available with the Revenue through NMS/ITD Software, information from AIR/CIB Statements and Individuals Transaction

Statements (ITS), 26AS, I-taxnet data and ITBA-AIMS statement, it is observed that substantial case deposits to the tune of Rs. 32,50,000/- (i.e., Rs.

12,00,000/- in A/c. No. 5492000100006 with Karnataka Bank Ltd., Rohini, Delhi, Rs. 4,00,000/- in A/c. No. 5492000100004 with Karnataka Bank

Ltd., Rohini, Delhi and Rs. 12,00,000/- in Account No. 4310102000028 with Axis Bank Ltd., Rohini, New Delhi) was made in the Bank accounts of

the Respondent Company, during the period of demonetization in Financial year 2016 relevant to the A.Y. 2017-18.

As the Respondent Company did not file the Income Tax Return for A.Y. 2017-18 and did not disclose fully and truly all the material facts

necessary for assessment, the Appellant has reason to believe that an amount of at least Rs. 32,50,000/-has escaped assessment within the meaning

of Section 147 of the Income Tax Act, and remained untaxed during the A.Y. 2017-18, additionally there is an outstanding demand of Rs. 26,362/-

against the Respondent Company pertaining to A.Ys 2007-08, 2009-10 and 2011-12.

That under the Income Tax Act, 1961, every company has to mandatorily file its return of income within the prescribed time as stipulated u/s 139 of

the Act. However, the assessee has not filed its return of income for the Assessment Year 2017-18.

That as the assessee has not filed return of income for AY 2017-18, no assessment could be made so as to arrive at correct taxable income of the

assessee. Since no assessment has been made under scrutiny u/s 143(3), the Ld. Assessing Officer had no occasion to scrutinize the transactions

entered into by the assessee during the year.

A notice dated 09.01.2018 under Section 142(1) (i) of the Income Tax Act was sent to the Respondent Company asking it to submit the return of

income, but there was no compliance by the Respondent Company.

Thereafter notices dated 26.08.2019, 17.10.2019, 25.10.2019 & 15.11.2019 under Section 142(1) of the Income Tax Act was sent to the

Respondent Company asking it to submit the return of income, but there was no compliance by the Respondent Company.

That during the course of enquiry about the Assessee the Ld. Assessing Officer learned that the Assessee has been struck off from the register

of the Ld. ROC and therefore is no more an existing entity. That the company by getting its name struck off from the register of the Ld. ROC, in the

guise of a dead company, is trying to escape assessment proceeding and liability which may accrue from such proceedings. It is humbly submitted that

the assessment proceedings against a dead company may not hold good in the eyes of law. Therefore, for any assessment proceedings to commence

and continue, the name of the Assessee has to be restored in the register of the Ld. ROC.

That the name of the Assessee has been struck off by the Ld. ROC without any proper enquiry. It is also submitted that neither the Assessing

Officer nor the superiors in the case of the Assessee were informed or made privy to the proceedings for removal of the name of the Assessee

Company from the register of the Ld. ROC.

That the procedure laid down under Section 252 of the Companies Act, 2013 and 560 of the Companies Act, 1956 for getting the name of the

company removed from the register of the Ld. ROC does not in any stretch of imagination can be allowed to be invoked resulting in escapement of

tax liability or any other statutory liability on the company which seeks to get its name removed from the register of the Ld. ROC. It is submitted that

the Ministry of Corporate Affairs, Government of India has introduced schemes to facilitate and enforce these Sections namely Fast Track Exit Mode,

2011 and Easy Exit Scheme, 2011 which specifically disallowed the benefit of Section 550 of the Companies Act to the companies which have

liabilities towards Income Tax Department or any other department of the Central Government or State Government.

That the cause of action arose on 09.01.2018 when the Department issued notice under Section 142(1) (i) of the IT Act which remained unserved/

uncompiled with. For framing the assessment order and for recovering the taxes due, it is necessary that the Respondent no.2's name be restored to

the register maintained by the RoC.

Despite several efforts and even after publication of notice in the Newspaper the Respondents other than AROC remain silent. Finally, they were

set ex-parte vide order dated 04.01.2021.

In view of the grounds raised by the Appellant which remain unrebutted, their prayer merits consideration. The appeal is therefore allowed. The

RoC is therefore directed to restore the name of Respondent no.2 in its register and also proceed to take such other and further penal action against

the respondents in accordance with the statutory provisions.

We, however, make it clear that this Bench has only directed restoration of the name of the appellant company in the Register of Companies

maintained by the RoC on the basis of averments made in the petition and have in no way endorsed or adjudicated about the Applicant's entitlement to

recover any amount as tax etc. which shall be adjudicated by the Department subject to the laws of limitation governing such recoveries. Charges

involved in seeking restoration of the company's name with the office of the ROC shall be borne by the applicant. Petition is disposed of in terms of

the above. Compliance be made with the ROC within 30 days.