2019 (9) TMI 1675 - Tri - Insolvency and Bankruptcy

Tax Authority Restores Company Name Amid Allegations: Compliance Emphasized

In the matter of Income Tax Officer, Ward 20 (3) Central Revenue Building New Delhi Versus Registrar of Companies NCT of Delhi & Haryana, RKA International Pvt. Ltd., Rishabh Agarwal, Ravinder Aggarwal

The Income Tax Authority successfully petitioned for the restoration of a company's name, M/s RKA International Pvt. Ltd, in the Register of Companies ... Seeking restoration of the name of the Respondent No. 2 company in the Register of Companies maintained by the RoC - Section 252 of the Companies Act, 2013 - HELD THAT:- Upon notice being issued, respondents 3 and 4 appeared and filed their reply impugning the demand stating that the assessment order was against a dead company and therefore the appellant is merely seeking to legalise its act which is contrary to the provisions of law. The assessments made against a struck off company are nonest. Keeping in view the submission made, the appellant has justified the grounds on which it seeks restoration of the name of the company so as to proceed further. li. is equally expedient for ihe respondent company to seek its restoration as they wish to contest the claim made by the appellant before any judicial forum. The RoC is therefore 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 respondents in accordance with the statutory provisions - Petition allowed. Issues:1. Restoration of company name in Register of Companies under Section 252 of Companies Act, 2013.2. Allegations of income tax evasion and non-disclosure of income.3. Impact of company strike-off on assessment and recovery proceedings.4. Obligations of RoC in notifying changes to Jurisdictional Assessing Officer.5. Legal validity of assessment orders against struck-off companies.6. Judicial directions regarding assessment proceedings against struck-off companies.7. Justification for restoration of company name in ROC records.8. Decision on restoration of company name and clarification on recovery entitlement.Analysis:1. The petition filed by the Income Tax Authority sought restoration of a company's name in the Register of Companies under Section 252 of the Companies Act, 2013. The company, M/s RKA International Pvt. Ltd, was struck off by the RoC for non-filing of statutory returns.2. The Income Tax Department alleged that the company had evaded income tax by not disclosing true income, particularly regarding a significant amount received but not reflected in tax returns. The Department initiated proceedings for assessment and penal consequences under the Income Tax Act.3. The strike-off of the company's name hampered assessment and recovery proceedings, leading to a demand for payment and initiation of penalty proceedings. The Department highlighted the importance of restoring the company's name for further legal actions.4. The Department raised concerns about the RoC not notifying the Jurisdictional Assessing Officer about the company's status change, as required by law. This lack of communication affected the Department's ability to pursue recovery actions effectively.5. The respondents challenged the assessment orders against the struck-off company, arguing that such assessments were invalid. The High Court directed continuation of assessment proceedings but withheld the final order until further directions.6. Considering the submissions, the Tribunal found it just and equitable to direct the restoration of the company's name in the ROC records to facilitate further legal actions by the Income Tax Department and the company itself.7. The Tribunal clarified that the restoration decision did not determine the entitlement to recovery, which would be adjudicated by the Department based on relevant laws. The applicant was directed to bear the charges for seeking restoration of the company's name with the RoC.8. Ultimately, the petition was allowed, and the RoC was instructed to restore the company's name in the Register and proceed with penal actions as per statutory provisions. The decision required compliance within 30 days, emphasizing the importance of legal processes and obligations in such matters.