Income Tax Officer, Ward 26(4) 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 Virsa Ventures India Pvt. Ltd. in the Register of Companies maintained by the Registrar of Companies ("RoC"), Respondent no. 1.

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 Virsa Ventures India Pvt. Ltd. is incorporated on 05.06.2008 under the Companies Act, 2013. That at the time of strike off, the registered office of the Assessee was at C/o. Sheer Trade Consultants INC, Great Eastern Centre, 70, Nehru Place, New Delhi-110017.

It is submitted by the I.T. Department that the information available with the Revenue through NMS/ITD Software, information from AIR/ CIB Statements and Individual Transaction Statements (ITS) it is observed that during the financial year 2010-11 relevant to A.Y. 2011-12, the respondent company has received fees for Professional/Technical services aggregating Rs. 91,55,926/ - on which TDS under Section 194J of the I.T. Act has been deducted. Further, on perusal of the bank account of the Respondent Company it has been found that there are cash deposits of Rs. 2,05,000/- in the bank account of the Respondent Company during the financial year 2010-11, relevant to A.Y. 2011-12.

Further the Income Tax Department has submitted that the Respondent did not file its ITR and did not disclose truly and fully the complete details required for assessment. The Assessing Officer has reason to believe that an estimated amount of at least Rs. 91,55,926/- has escaped assessment within the meaning of Section 147/148 of the IT Act and has not been brought under tax for the A.Y. 2011-12.

As per 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 2011-12.

Further the I.T. Department has submitted that as the assessee has not filed return of income for AY 2011-12, 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.

That for the aforesaid facts the Ld. Assessing Officer had reason to believe that income of Rs.91,55,926/- from professional fees as well as Rs. 2,05,000/- from cash deposits has escaped assessment for AY 2011-12 in the case of the assessee within the meaning of Section 147 of the Act.

Letters dated 06.02.2013, 30.07.2013, 05.10.2013, 18.10.2013, 11.01.2014, 14.03.2017 and 09.08.2017 were issued to the Respondent Company requesting it to furnish response as per standard operating procedure which remained non-complied by the Respondent Company. Thereafter, letter dated 06.03.2018 was issued to the Respondent Company for seeking information under Section 133 (6) of the Income Tax Act about filing of income tax return for A.Y. 2011-12 and details of payments in its bank account for F.Y. 2010-11 relevant to A.Y. 2011-12.

A notice u/s 148 of the IT Act, dated 20.03.2018, was issued to the assessee after taking due approval of the relevant authorities. However, the said notice has remained unserved/ uncomplied with.

Income Tax Department has submitted 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 on 26.05.2014 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.

Despite several efforts and even after publication of notice in the newspaper, the respondents other than ROC remained salient. Finally they were set ex parte vide order dated 19.02.2021.

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.