2020 (9) TMI 473 - Tri - Companies Law

Restoration of the name of the Company in the Register of Companies - Section 252(1) of the Companies Act, 2013 - HELD THAT - The petition is filed under Section 252(1) of the Act, however, it can be seen that it actually satisfied the provisions of Section 252(3) of the Act and it would be appropriate to consider and decide the present petition under Section 252(3) of the Act. The present petition is filed by the petitioner within a period of 20 years from publication in the Official Gazette of notice under Section 248(5) of the Act - The Income Tax Department has raised outstanding demand of ₹ 4,40,60,940/- including interest under Section 234A 234B of the Income Tax Act, 1961. It has been stated that an appeal against the demand is pending before the Commissioner of Income Tax (Appeals)-2, Chandigarh. It would be in the interest of Income Tax Department that the company is revived so that recovery proceedings can be continued by the Department, expeditiously. The petitioner-company has entered into agreement to purchase the land (Annexure 5) and the learned counsel representing petitioner-company has submitted that the company has filed appeal against the civil suit in respect of the specific performance before the High Court of Punjab and Haryana - thus, the ingredients provided for in 252(3) of the Act, are satisfied. The petition is allowed and the name of the company be restored in the Register of Companies, subject to deposit of ₹ 30,000/- as costs with the Pay and Accounts Officer, Ministry of Corporate Affairs within a period of three weeks from the receipt of certified copy of this order.

Summary

Issues:
1. Restoration of company's name in the Register of Companies under Section 252(1) of the Companies Act, 2013.
2. Company's compliance with statutory requirements and financial statements filing.
3. Dispute with landowners affecting business operations.
4. Outstanding tax demand and pending appeal before the Income Tax Department.
5. Legal proceedings and judgments related to the company's operations.

Issue 1: Restoration of Company's Name in the Register of Companies
The petitioner, Blue Sea Sites Private Limited, filed a petition seeking restoration of its name in the Register of Companies under Section 252(1) of the Companies Act, 2013. The Registrar of Companies had struck off the company's name due to alleged inactivity and non-filing of financial statements. The petitioner argued that it had been carrying on business despite disputes with landowners, as evidenced by agreements and ongoing legal proceedings. The Tribunal considered the provisions of Section 252(3) and ordered the restoration of the company's name, subject to certain conditions, including a deposit of costs and compliance with filing requirements.

Issue 2: Compliance with Statutory Requirements
The petitioner submitted financial documents, including a Balance Sheet as of 31.03.2019, showing loans and advances. The Income Tax Department had raised a significant demand against the company, which was under appeal. The Tribunal noted the importance of reviving the company for the Income Tax Department to continue recovery proceedings promptly. The petitioner was directed to pay costs, file pending financial statements, and meet all statutory obligations within specified timelines upon restoration of the company's name.

Issue 3: Dispute with Landowners
The company had entered into agreements for land purchase, but disputes with landowners led to legal actions, including a civil suit and subsequent appeals before the Punjab and Haryana High Court. The ongoing litigation was cited as a reason for the delay in commencing construction activities, indicating that the company had been carrying on business operations despite challenges.

Issue 4: Outstanding Tax Demand and Legal Proceedings
The Income Tax Department had issued a demand against the company, including interest, for the assessment year 2006-07. The petitioner had appealed this demand, and the matter was pending before the Commissioner of Income Tax (Appeals)-2, Chandigarh. The Tribunal emphasized the need for the Income Tax Department to take necessary actions for non-filing or belated filing of tax returns and recovery of outstanding demands.

Issue 5: Legal Proceedings and Judgments
The company's history included legal actions such as a civil suit for specific performance, which was dismissed, leading to appeals before the High Court. The Tribunal considered these legal proceedings as part of the company's operational challenges and reasons for non-compliance with statutory requirements.

In conclusion, the Tribunal allowed the petition for restoration of the company's name in the Register of Companies, subject to specified conditions and timelines for compliance with statutory obligations and financial filings. The judgment addressed the complex issues of business disputes, tax demands, and legal proceedings, emphasizing the importance of regulatory compliance and business revival.