2021 (1) TMI 985 - Tri - Companies Law

Restoration of the name of the Appellant Company in the register of the Registrar of Companies - Section 252 of the Companies Act, 2013 - HELD THAT - That the Income Tax Department has filed its Report and has reconfirmed this fact from their records that 'nil' taxes were paid or negative income was shown by the Appellant Company for the Assessment Years from 2012-13 to 2017-18 - That the 'NIL' revenue from operations in Balance Sheets, 'NIL' income shown in the Income Tax Returns and insignificant entries in bank statements - all reflect that the Appellant Company was neither in operation nor doing any significant business at the time when its name was struck off from the register of RoC. It is worthwhile to refer to the Judgement of Hon'ble NCLAT in the matter of Alliance Commodities Private Limited Vs. Office of Registrar of Companies, West Bengal 2019 (7) TMI 1467 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI where it was held that A Shell Company or a Company having assets but advancing loans to sister concerns or corporate persons for siphoning of the funds, evading tax or indulging in unlawful business or not abiding by the statutory compliances cannot be allowed to invoke this expression or otherwise which would be a travesty of justice besides defeating the very object of the Company. 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 name of the Appellant Company in the register of the Registrar of Companies.
2. Compliance with statutory requirements under Section 248 of the Companies Act, 2013.
3. Active status of the Appellant Company.
4. Justification for striking off the name of the Appellant Company by the RoC.
5. Interpretation of Section 252(3) of the Companies Act, 2013.

Analysis:

1. The Appellant, M/s Suvidha Polymers Private Limited, sought restoration of its name in the RoC register under Section 252 of the Companies Act, 2013.

2. The RoC initiated proceedings under Section 248 and struck off the Appellant Company's name due to defaults in statutory compliances, specifically the failure to file Financial Statements & Annual Returns since 31.03.2015.

3. The Appellant presented evidence of its active status, including audited balance sheets showing 'NIL' revenue from operations, income tax returns with 'NIL' income, and bank statements with insignificant entries.

4. The RoC justified the striking off by stating that the Appellant Company was not carrying on any operations for two preceding financial years, as required under Section 455 of the Companies Act, 2013.

5. Referring to a judgment by the NCLAT, the Tribunal emphasized the importance of demonstrating that the company was carrying on business or in operation at the time of striking off. The Tribunal declined to restore the name of the Appellant Company, as it was not carrying on business or in operation when struck off, aligning with the legislative intent of Section 252(3).

6. The Tribunal dismissed the appeal, upholding the RoC's decision to strike off the name of the Appellant Company under Section 248(5) of the Companies Act, 2013.

7. The order was issued for the parties involved to obtain a copy for reference and compliance.