2021 (8) TMI 104 - Tri - Companies Law

Seeking restoration of the name of the Respondents-Company M/s. R Sons Builders Private Limited in the register maintained by the Registrar of Companies - Section 252(1) of the Companies Act, 2013 - HELD THAT - The income received by the respondent-company is required to be verified and assessed in the hands of the Appellant under the Income-tax Act, 1961 and to undertake assessment proceedings but name of the respondent-company has to be restored in the Register of RoC. To render assessment order valid in the eyes of Law and to enable the Appellant to take steps for recovery of taxes and for any further consequential proceedings, the respondent-company's name be restored to the Register of Companies as if the name of the company was never struck off - Denial to restore the name of the respondent company in the Register of the ROC will not only condone the wrong doing of the respondent company but it will also encourage of escapement of tax liabilities by such subterfuge which will be prejudicial to the interest of the revenue in the long run. The service of notice to respondents has been made through publication in newspaper, but none appeared. The Registrar of companies is 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 respondent in accordance with the statutory provisions - Application allowed.

Summary

Issues involved:
- Restoration of the name of a company in the register maintained by the Registrar of Companies, NCT of Delhi & Haryana under Section 252(1) of the Companies Act, 2013.
- Alleged concealment of income by the company leading to assessment proceedings under the Income-tax Act, 1961.
- Removal of the company's name from the register by the Registrar of Companies without intimation, affecting assessment proceedings and tax recovery.

Analysis:

1. Restoration of Company's Name in Register: The appeal was filed by the Income Tax Officer seeking restoration of the name of the respondent company in the Register of Companies. The company's name was struck off by the Registrar of Companies without proper intimation, impacting the assessment proceedings and tax recovery process. The Tribunal directed the Registrar to restore the company's name in the register as if it was never struck off, in accordance with Section 248(1) of the Companies Act, 2013.

2. Alleged Concealment of Income: The appellant alleged that the respondent company had concealed income, leading to assessment proceedings under the Income-tax Act, 1961. The company failed to file its return of income for the relevant assessment year despite receiving interest and other securities. The Assessing Officer proposed the case for assessment under Section 147 of the Act, and notices were issued for non-compliance. The Tribunal emphasized the need for the company's name to be restored to facilitate effective assessment and tax recovery.

3. Impact on Assessment Proceedings: The removal of the company's name from the register without proper enquiry or intimation to the relevant authorities hindered the assessment proceedings and tax recovery efforts. The Income Tax department was aggrieved by the company's removal from the register, as it impeded the process of recovering taxes and pursuing further consequential actions. The Tribunal highlighted that denying the restoration of the company's name would condone wrongdoing and encourage evasion of tax liabilities, which is detrimental to revenue interests.

In conclusion, the Tribunal allowed the appeal, directing the Registrar of Companies to restore the name of the respondent company in the register and take necessary penal actions in accordance with statutory provisions. The decision aimed to uphold the integrity of assessment proceedings, facilitate tax recovery, and prevent evasion of tax liabilities by ensuring the company's name was reinstated as if it had never been struck off.