2020 (1) TMI 1418 - Tri - Companies Law

Striking off of the name of the M/s Achates Developers Private Limited, from the register of companies - section 252 of Companies Act - HELD THAT - The income tax department is an aggrieved party within the meaning of section 252(1) as it has to recover taxes payable by respondent company and great prejudice will be caused to Revenue if the name of the respondent company is not restored back. In the above circumstances, this appeal is allowed. The Registrar of companies 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. 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. Application allowed.

Summary

Issues:
Appeal against striking off company's name from register of companies for non-compliance with income tax return filing and assessment proceedings.

Analysis:
1. The appeal was filed by the Income Tax Officer against the striking off of a private limited company's name from the register of companies. The company, incorporated under the Companies Act, 1956, had not filed its income tax return for the assessment year 2011-12, leading to reassessment proceedings under the Income Tax Act.

2. The appellant alleged that the company's income tax return analysis revealed discrepancies, indicating an estimated amount of at least ?3.01 crores had escaped assessment. The company's gross receipts and cash balances did not align with the significant cash deposits and credits, raising suspicions of tax evasion.

3. Notice under section 148 of the Income Tax Act was issued to the company, but as it was struck off from the register of companies due to non-compliance, the assessment/reassessment proceedings were hindered. The ROC had sought explanations from the company regarding its dormant status, which remained unanswered.

4. The appellant contended that the striking off the company's name was unjust as it impeded the tax recovery process. An assessment order had been passed, creating a tax demand, along with penalty orders for non-compliance with income tax return filing requirements.

5. The Tribunal, considering the revenue implications and the need to recover taxes, directed the Registrar of Companies to restore the company's name in the register. The restoration would enable further legal actions against the company and treat it as if the name had not been struck off, in accordance with statutory provisions.

6. The decision allowed the appeal, emphasizing the importance of restoring the company's name to facilitate tax recovery and penal actions. The order was issued for the restoration of the company's name in the register, ensuring compliance with legal procedures and enabling the income tax department to pursue necessary actions against the company.

7. The judgment concluded by disposing of the appeal and ordering the supply of a copy of the order to the concerned parties for compliance and reference in further proceedings.