2021 (8) TMI 155 - Tri - Companies Law

Seeking for restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana - Section 252 of the Companies Act, 2013 - HELD THAT - It is observed that the company has not filed its Financial Statements since its incorporation. Further, the Balance Sheets of the Appellant Company annexed since Financial Year 2013-14 to 2015-16 depict 'NIL' Revenue from its operations - Furthermore, the Appellant Company has failed to produce any Income Tax return for any of the Assessment Years. That as per Section 139(1) of the Income Tax Act., it is mandatory for every Company to file its Income Tax Returns. Although the Balance Sheet of the Appellant Company for the year 2016-17 reflects revenue from operations to the tune of ₹ 5,77,334, as pointed out by the RoC the same is not accompanied with Auditors Report. Further, when we peruse the Bank Statements of the Appellant Company for the year 2016-17, it is observed that entries of the said period do not seem to be arising out of its business operations - That the Balance Sheet filed for the year 2017-18 and the GST Certificate dated 17.07.2018 shall have no relevance for consideration since the same pertain to the post-strike off period. The Appellant Company has failed to establish that it was in operation, carrying out its business, or it is just to restore the name of the Company in the register of RoC - this Bench is not inclined to interfere with the striking off action taken by the RoC against the Appellant Company under Section 248(5) of the Companies Act 2013. Appeal dismissed.

Summary

Issues:
1. Restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana.
2. Compliance with statutory requirements for filing Financial Statements & Annual Returns.
3. Evidence of the Appellant Company's business operations and financial activities.
4. Failure to file Income Tax returns.
5. Interpretation of Section 252(3) of the Companies Act, 2013 regarding restoration of struck-off companies.

Analysis:
1. The appeal sought restoration of the Appellant Company's name in the register due to its strike-off by the RoC for non-compliance with statutory requirements, invoking Section 252 of the Companies Act, 2013.
2. The RoC initiated proceedings under Section 248 of the Companies Act, 2013, and struck off the company's name for failure to file Financial Statements & Annual Returns. The Appellant claimed to be active and submitted documents supporting its operations, including financial statements, bank statements, GST registration, and customs documents.
3. Despite the Appellant's submissions, the RoC contended that the strike-off was legal as the company had not carried out any operations for two consecutive financial years. The Appellant failed to provide audited financials and adequate evidence of business activities.
4. The Income Tax Department did not file a reply, and the Appellant did not submit Income Tax returns, which are mandatory under the Income Tax Act, further weakening their case for restoration.
5. The Tribunal referenced a judgment highlighting the conditions for restoration under Section 252(3) of the Companies Act, emphasizing the necessity for the company to be actively carrying on business or demonstrating just reasons for restoration. The Tribunal concluded that the Appellant failed to establish its operational status, leading to the dismissal of the appeal and upholding the RoC's strike-off decision.

Overall, the Tribunal dismissed the appeal, stating that the Appellant Company did not meet the criteria for restoration as required by the Companies Act, 2013, and failed to provide sufficient evidence of its business activities during the relevant period. The judgment underscores the importance of compliance with statutory obligations and the need for companies seeking restoration to demonstrate ongoing business operations or justifiable reasons for reinstatement.