Income Tax Officer, Ward 21(1) vs Registrar Of Companies, Delhi

Dr. Sanjeev Ranjan, Member (Technical)

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, M/s Rudra Buildtech Pvt. Ltd., in the Register of Companies maintained by the RoC, Respondent No. 1.

Vide order dated 19.04.2023, the Appellant was directed to serve notice upon the Respondents through substituted service by paper publication. Service was duly affected via speed post and publication in newspapers dated 05.07.2023 on the Respondent Company. The proof of service via publication was filed vide an Affidavit of Service dated 05.07.2023.

Vide Proceedings initiated by the office of the RoC, names of several companies were struck off for want of filing Statutory Returns.

Respondent No. 2 Company, which had not filed any Return or Financial Statement, was duly struck off from the Register of Companies vide STK-7 dated 08.03.2019.

The name of the Respondent Company appeared in Serial No. 27 of the newspaper publication and the next date of hearing i.e. 12.07.2023 was mentioned in the public notice. Other than the RoC, none appeared on behalf of the Respondent Nos. 2 to 4 to oppose the prayer made by the Appellant. Vide order dated 12.07.2023 Respondents other than ROC were set as ex-parte.

RoC has not filed any reply but submitted that they have no objection if the company is revived as recorded in order dated 12.07.2023.

Invoking the provision of Section 252 of the Companies Act, the Income Tax Dept. prayed for its restoration in order to carry out proceedings initiated against them. As per the averments, the Appellant was in possession of information that there are many transactions by which income of the Respondent Company has escaped assessment for AY 2013-14 thereby rendering the Respondent Company liable for consequences under Income Tax Act, 1961. Hence, proceedings were initiated against the Respondent Company and notice dated 15.07.2022 U/s 148 of the I.T. Act was issued for A.Y. 2013-14.

The copy of Assessment Order dated 23.05.2023 along with Demand Notice for A.Y. 2013-14 reflecting the total outstanding demand of Rs. 3,43,55,860 is placed on record. It is submitted that penalty proceedings under Section 271(1)(b) of the Income Tax Act, 1961 was initiated against the Respondent Company.

The grievance of the Income Tax Dept. is that the name of the Respondent Company had been struck off by the ROC seriously affecting the assessment proceedings. The action of striking off of the Respondent Company creates immunity for the Assessee from discharging its tax liability. It is therefore necessary that in order to take steps for recovery of taxes and for any further consequential proceedings, that the Respondent Company’s name be restored to the Register of Companies as if the name of the Company was never struck off. The restoration of the name of the Respondent Company to the Register of Companies would be just and equitable and in public interest.

Ld. Counsel for the Income Tax Submits that the aforesaid facts necessitate restoration of the name of the Respondent Company in the Register of Companies to proceed further in accordance with law. In view of the grounds raised by the Appellant, being an aggrieved person, the prayer can be entertained U/s 252 of the Companies Act.

We have considered the submissions of the Ld. Counsel for the Income Tax Department. The provisions of Section 252 (3) confers power upon this tribunal to restore the name of the company to the Register of Companies maintained by the Registrar of Companies, if it is satisfied that the company was, at the time of its name being struck off, either carrying on business or was in operation or otherwise it is just that the name of the company be restored to the Register of Companies. Such power can be exercised before the expiry of twenty years of the publication of notice of the striking off published under Section 248 (5) of the Act.

Considering the facts and circumstances of the present case, we are of the considered view that it is “just and proper” to restore the name of the company to the Register of Companies as mention by the ROC.

The Appeal is, therefore, ALLOWED. The RoC is therefore, 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 respondents in accordance with the statutory provisions.

We however make it clear that this Bench has only directed restoration of the name of the Respondent Company in the Register of Companies maintained by the RoC on the basis of averments made in the appeal and in no way endorse or have adjudicated about their entitlement to recover which shall be adjudicated by the department subject to the laws of limitation governing such recoveries. Charges involved in seeking restoration of the Respondent Company’s name with the office of the RoC shall be borne by the Appellant. Compliance be made with the RoC within 30 days.