Income Tax Officer, Ward 20(1), New Delhi vs Registrar Of Companies, Delhi & Ors

Rahul Bhatnagar, Member (Technical)

The instant company appeal is filed by and through the Income Tax Officer, Ward 20 (1), New Delhi, (“Appellant”), under Section 252(1) read with Section 252(3) of the Companies Act, 2013 (“the Act”) read with Rule 7 & 9 of Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 seeking restoration of the name of M/s. Pusa Holidays 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 ROIC

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.

Brief facts of the case, as mentioned in the instant appeal and averred by the appellant, which are relevant to the issue in question, are as follows:-

a) The appellant submits that the Respondent No.2 Company i.e., M/s. Pusa Holidays Private Limited was incorporated on 17.06.2014 having CIN: U63000DL2014PTC268045 and PAN: AAHCP8018K. The appellant further submits that the appellant has jurisdiction over the Respondent No.2 Company as the registered office of the Respondent No.2 Company is situated at 220/1,Ground Floor, Savitri Nagar, MALVIYA Nagar, Sheikh Sarai-I, New Delhi - 110017.

b) The appellant submits 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. The appellant submits that as per the information collected and received by the Appellant, the Respondent No.2 had not filed Income TAX Return for the A.Y. 2017-18 and the Respondent No.2 had made huge cash deposits in their Bank Accounts.

c) The appellant further submits that the appellant had passed the Assessment order under Section 144 of the Income Tax Act, 1961 for AY 2017-18 and the penalty proceedings were initiated. That the demand notice u/s 156 of the Income Tax Act for Rs.10,82,23,562/-was issued to the Respondent N. 2 Company

d) The appellant submits that the appellant is an aggrieved party and a creditor within the meaning of Section 252(1) and (3) of the Companies Act 2013 and great prejudice will be caused to Revenue and public at large, if the name of the Respondent No.2 Company is not restored back in the register of companies.

e) The appellant further submits that the Respondent No.2 Company by having its name struck off from the Register of Companies has indirectly sought to evade the tax liabilities. The appellant adds that denial to restore the name of the Respondent No.2 Company in the Register of the Respondent No.1 will indirectly not only condone the wrong doing of the Respondent No.2 Company but it will also encourage the escaping of tax liabilities by such subterfuge which will be prejudicial to the interests of the Revenue in the long run.

Heard. 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 Notice issued under Section 144 of the Income Tax Act, 1961 for Assessment Year 2017-18.

c) Copy of Assessment order under Section 147 read with Section 144 and Section 144 B of the Income Tax Act dated 12.12.2019.

d) Copy of the Demand Notice dated 12.12.2019 under Section 156 of the Income TAX Act, 1961 for the assessment year 2017-18 demanding a sum of Rs.10,82,23,562/-.

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 04.07.2022, directed the appellant to issue notices to the respondents. This Tribunal vide order dated 10.03.2023, considering the fact that despite, the service of notice the Respondents failed to appear, this Tribunal had proceeded the Respondents ex-parte. During the course of hearing of the instant appeal dated 13.06.2023, the Ld. Counsel for the ROC i.e., Respondent No.1 appeared and submitted that Respondent No.1 had no objection, if this Tribunal allows the restoration of the name of the Respondent No.2 Company in the register of companies maintained by the Respondent No.1.

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.”

Be it noted that a mere running of the eye on 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.”

We are of the considered view that the appellant has succeeded in substantiating that demand of Rs.10,82,23,562/- is pending for the AY 2017-18, 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.

Accordingly, in the interest of Revenue and Public, 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. Pusa Holidays Private Limited having CIN: U63000DL2014PTC268045 in the register of companies maintained by the Registrar of Companies, NCT of Delhi and Haryana to enable the appellant to recover the outstanding demand of the tax liability of the Respondent No.2 Company.

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.126/252/ND/2022 stands allowed.

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