2020 (5) TMI 367 - Tri - Companies Law

Striking off of the name of M/s. Mandakini Vacations Pvt. Ltd. (the Company), from the Register of Companies - Appellant contends that in order to recover the taxes on the undisclosed income of the Company statutory dues and recover the revenue from the transactions of the company, there is a need of restoration of M/s. Mandakini Vacations Pvt. Ltd. in the Register of Companies. HELD THAT - The Respondent No. 2 Company has also filed an Appeal bearing 340/252/ND/2019 for restoring its name in the Register of ROC. The Respondent No. 1 i.e. ROC has not filed its reply despite several opportunities. However, the representative of RoC present during the proceedings, did not rais any objection. The Income-tax Department is an aggrieved party within the meaning of section 252(1) read with 252(3), as it has to recover taxes payable by Respondent Company and great prejudice will be caused to its revenues, if the name of the Company is not restored back. Accordingly, in sequel to the above, the Appeal is allowed. The Registrar of Companies, is directed to restore the name of M/s. Mandakini Vacations Pvt. Ltd, in its Register, as if the name of the Company had not been struck off in accordance with section 248(1) of the Companies Act, 2013. Petition allowed.

Summary

Issues:
- Appeal against striking off the name of a company from the Register of Companies
- Failure to file Income-tax Return for the Assessment Year 2012-13
- Alleged tax evasion and undisclosed income
- Need for restoration of the company in the Register of Companies
- Role of the Income-tax Department as an aggrieved party

Analysis:
The appeal before the National Company Law Tribunal involved the striking off of the name of a company from the Register of Companies. The Income-tax Officer, Ward 22(3), filed the appeal against the striking off of M/s. Mandakini Vacations Pvt. Ltd. The company was incorporated under the Companies Act, 1956, with specific details regarding its capital and registered office. The Appellant alleged that the company had not filed its Income-tax Return for the Assessment Year 2012-13, leading to concerns about undisclosed income and tax evasion.

The Appellant provided details of the company's financial transactions during the relevant period, highlighting substantial amounts of contractual receipts, rental income, and interest income. Despite issuing a notice under section 133(6) of the IT Act to the company, no response was received, leaving cash deposits unexplained. The Appellant contended that the Assessing Officer had reason to believe that a significant income had escaped assessment due to the company's failure to file its Income-tax Return.

In light of the alleged tax evasion and undisclosed income, the Appellant sought the restoration of the company in the Register of Companies to recover taxes and statutory dues. The Tribunal noted that the Income-tax Department was an aggrieved party as it needed to recover taxes from the company, emphasizing the potential prejudice to revenue if the company's name was not restored. Consequently, the Tribunal allowed the appeal, directing the Registrar of Companies to restore the name of M/s. Mandakini Vacations Pvt. Ltd. in the Register and take any necessary penal action against the respondents for defaults.

The judgment highlighted the importance of compliance with tax obligations and the consequences of failing to file Income-tax Returns. It underscored the role of the Tribunal in addressing tax evasion issues and ensuring the recovery of taxes owed to the government. The decision aimed to uphold the integrity of the tax system and protect the interests of the revenue authorities, ultimately emphasizing the significance of maintaining accurate records and fulfilling tax obligations to avoid legal repercussions.