Income Tax Officer, Ward 14(2) vs Registrar Of Companies And Ors.

This Appeal has been filed by Income tax Officer, Ward 1(1), New Delhi invoking the provisions of Section 252(1) of the Companies Act, 2013 for restoration of the name of the Respondents -Company M/s. Karuna Mercantile Private Limited in the register maintained by the Registrar of Companies, NCT of Delhi & Haryana.

As per the avemients, M/s. Karun.a Mercantile Pvt Ltd is a private limited company registered with Registrar of Companies, NCT of Delhi & Haryana on 07.03.1996 having its office at A-64, Temple Colony, Samaypur, Delhi North, Delhi 110042 having CIN No. U51909DL1996PTC076884 and authorized capital of Rs.1,00,000 and paid -up share capital of Rs.1,00,000/-.

That Directors of the Respondent No.2- company, being Jasbir Singh Grover and Ranjit Singh have been arrayed as Respondent No.3 and Respondent no.4 respectively.

From the information available with the Revenue that respondent-company had filed its Income-tax Return for the A.Y. 2012-13 and the said return was processed U/Sec.143(1) of the Income-Otax Act, 1961. Information received from Income Tax Officer, (I&CI), Kanpur vide communication dated 28.12.2015 informing that during the F.Y. 2011-12 relevant to A.Y. 2012-13, the respondent-company had invested an amount of Rs.24,25,000/- for purchase of shares of M/s. Passion Infradevelopers Pvt Ltd. Upon receiving the said information, the Appellant perused the Income-tax Return of the respondent-company for A.Y. 2012-13 and it was noticed that in para A of the balance sheet, the respondent has shown Nil against the investment column. Further against the column under the head of Unsecured Loans and Bank balances, the respondent gave NIL information. Further, it was observed that the financial details as disclosed by the respondent-company in its Return for the A.Y. 2012-13, respondent-company did not justify the source of investment of Rs.24,25,000/- by it in the shares of M/s. Passiopn Infradevelopers Pvt Ltd.

As the respondent-company did not disclose fully all the material facts necessary for assessment the Appellant had reason to believe that an amount of at least Rs.24,25,000/- has escaped assessment within the meaning of Sec.147 of the Income-tax Act and remained untaxed in A.Y. 2012-13. Therefore, Notice dated 30.03.2019 U/Sec.148 of the Income-tax Act, 1961 was issued to the respondent-company asking it to prepare a true and correct return of its income in respect of which it is assessable under the Income-Tax Act, 1961 during F.Y. 2011-2012 relevant to A. Y. 2012-13. The Assessment for A.Y. 2012-13 in respect of the respondent-company is still pending. The appellant attached copy of Assessment order dated 11.11.2019 U/sec.144/ 147 assessing income of respondent-company at Rs.33,32,810/- charging interest U/sec.234A, 2234B & 234C as per provisions of Income-tax Act, 1961 alongwith Demand Notice and Penalty Notice dated 13.11.2019 u/sec.271(1)(c) and 271(1)(b) issued for concealment and non-compliance of notices.

The income received by the respondent-company is required to be verified and assessed in the hands of the Appellant under the Income-tax Act, 1961 and to undertake assessment proceedings, name of the respondent-company has to be restored in the Register of RoC.

Appellant submitted that assessment proceedings against a dead company cannot be sustainable in the eyes of Law. Hence the appeal filed by the Appellant.

To render the Assessment Order valid in the eyes of Law and to enable the Appellant take effective 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 Company was never struck off.

The respondent-company is trying to escape the Assessment proceedings and the liability that may arise out of the said proceedings.

On perusal of the MCA website, the appellant came to know that respondent- company's name was struck off by ROC initially by issuing Notice No. ROC-DEL/248/STK-5/721 dated 27.04.2017 followed by Notification dated 30.06.2017, striking off the name of Company at Sr.No.10213 from the Register of Registrar of Companies.

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 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 for recovering the taxes due and for any further consequential proceedings against the respondent-company.

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 respondent-company failed to appear before the Court to provide its defence. Hence, the Order was reserved on 25.03.2021.

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 company 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.

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 allowed and disposed of accordingly.

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