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2021 (6) TMI 317 - Tri - Companies LawSeeking approval for reduction of share capital - only objection raised by the income tax department is with regard to an outstanding demand towards fringe benefit tax - Section 66 of the Companies Act 2013 - HELD THAT - The petitioner has already deposited the amount towards fringe benefit tax and the receipt thereof has been placed on record. Further, no other objection has been raised by the Income tax department. The Application is allowed for reduction of the share capital of the company.
Issues:
Application for reduction of share capital under Section 66 of the Companies Act 2013. Analysis: The Application was filed seeking approval for the reduction of share capital by a Private Limited Company. The Company had 5 directors, 6 shareholders, and no secured or unsecured creditors. The current share capital was INR 1,00,00,000 divided into 10,00,000 equity shares of INR 10 each. The Company intended to reduce its capital to optimize resources for future plans. A special resolution was passed in an Extraordinary General Meeting on December 15, 2017, in accordance with Section 66(1) of the Companies Act, 2013, to approve the reduction. The Articles of Association allowed for the reduction of capital by special resolution. The Company provided the necessary certificates from auditors regarding creditors, compliance with accounting standards, and no arrears in repayment of deposits. The Regional Director's report confirmed the Company's regular statutory filings and no objections to the reduction scheme. The income tax department had a minor objection regarding fringe benefit tax, which was resolved by the Company. After hearing arguments and reviewing the records, the Tribunal allowed the reduction of share capital. The authorized share capital was reduced to INR 1,00,000 divided into 10,000 equity shares of INR 10 each. The approved minutes for reduction were to be submitted to the Registrar of Companies within thirty days. The reduced amount was to be paid to shareholders proportionally. The Applicant Company was directed to make necessary alterations in the Memorandum of Association and file required forms with the Registrar of Companies within the specified timeline. Consequently, the application was allowed and the case was disposed of.
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