2023 (1) TMI 307 - AT - Companies Law

Seeking restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC) - it is alleged that the Appellant company has not filed its return of income since inception, thereby violating the mandatory provisions under Section 139 of the Income Tax, 1961 - HELD THAT - There is no illegality committed by the Ld. Adjudicating Authority while passing the impugned order and also there is no cogent reason to interfere. Therefore, we do not need to interfere in the impugned order. The impugned order passed by the National Company Law Tribunal (Court-V, New Delhi) is hereby affirmed. There is no merit in the Appeal. The Appeal is hereby dismissed.

Summary

Issues:
1. Appeal against restoration of company name in register.
2. Failure to prove company operations after strike off.
3. Financial statements and tax returns filing compliance.
4. Dissolution of company and legal procedures followed.

Analysis:
1. The appeal was filed under Section 421 of the Companies Act, 2013, challenging the order of the National Company Law Tribunal (NCLT) rejecting the restoration of the company's name in the register. The company, engaged in manufacturing steel alloy castings, faced closure due to financial difficulties, leading to the strike off by the Registrar of Companies (RoC). The Tribunal dismissed the appeal citing failure to prove company operations post strike off.

2. The appellant company's history revealed its manufacturing activities till September 1997, after which operations ceased permanently. Legal disputes, including a duty claim by the Central Excise Department, arose post-closure. The company's efforts to challenge these claims were delayed, resulting in adverse legal consequences. The company's strike off by the RoC further complicated its legal standing.

3. The appellant argued compliance with financial reporting requirements and tax filings, presenting evidence of income tax returns for specific assessment years. However, the respondent RoC highlighted the company's consistent failure to file financial statements and annual returns, leading to the strike off. The appellant's financial records and bank account details were submitted as evidence of compliance.

4. The respondent RoC and Income Tax Department justified the company's strike off based on non-compliance with statutory requirements. Legal notices and procedures were followed, leading to the dissolution of the company. The RoC's actions were deemed lawful and justified, considering the lack of evidence supporting the company's claim for restoration. The NCLT affirmed the dismissal of the appeal, concluding no legal errors warranting intervention.

In conclusion, the judgment upheld the NCLT's decision to dismiss the appeal, emphasizing the company's failure to substantiate operational continuity post strike off and comply with statutory obligations. The legal procedures followed by the RoC and Income Tax Department were deemed valid, leading to the affirmation of the original order. The detailed analysis of the company's history, financial compliance, and procedural adherence formed the basis for the judgment's conclusion.