Appellate Tribunal orders restoration of company name for non-filing, emphasizes compliance with statutory requirements

The Appellate Tribunal set aside the NCLT's order and directed the ROC to restore the company's name to the Register of Companies. The company, despite operational and generating revenue, had failed to file Annual Accounts and Returns. The Tribunal emphasized the rectifiability of non-filing and instructed compliance with statutory requirements, allowing the ROC to impose penalties. The company was required to submit all outstanding financial documents and adhere to statutory obligations, with no costs awarded in the appeal.

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Issues Involved:
1. Non-filing of Annual Accounts and Annual Returns.
2. Striking off the company's name by the Registrar of Companies (ROC).
3. Appeal for restoration of the company's name to the Register of Companies.
4. Assessment of the company's operational status and financial health.
5. Compliance with statutory requirements and imposition of penalties.

Issue-wise Detailed Analysis:

1. Non-filing of Annual Accounts and Annual Returns:
The Appellant company failed to file Annual Accounts and Annual Returns for the Financial Years 2016-2017, 2017-2018, and 2018-2019. The company attributed this failure to a lack of professional guidance and inadvertent mistakes by the management. Despite being active and operational, the company did not comply with statutory filing requirements, leading to regulatory actions.

2. Striking off the company's name by the Registrar of Companies (ROC):
The ROC, Gujarat, issued show cause notices in forms STK-1 and STK-5 due to the company's continuous non-filing of statutory returns for more than two years. The ROC struck off the company's name from the Register of Companies on 13.11.2019, citing non-compliance with Section 248(1)(c) of the Companies Act, 2013. The ROC's action was based on the company's failure to carry on business or operations for two immediate preceding financial years and not applying for dormant status under Section 455.

3. Appeal for restoration of the company's name to the Register of Companies:
The Appellant sought restoration of the company's name, arguing that the company was operational and generating revenue during the disputed period. The company provided evidence of its business activities, tangible and intangible assets, and employment of 22 to 25 employees. The Appellant contended that the non-filing of statutory documents was not deliberate but due to inadvertent mistakes.

4. Assessment of the company's operational status and financial health:
The NCLT dismissed the application for restoration, stating that the company did not generate income/revenue since the financial year ending 31.03.2017 and failed to provide future business plans or project reports. The NCLT noted accumulated losses and questioned the company's TDS deductions despite showing 'NIL' income. However, the Appellate Tribunal found that the company was operational, generating revenue, and had assets and employees, contradicting the ROC's claim of the company being defunct.

5. Compliance with statutory requirements and imposition of penalties:
The Appellate Tribunal acknowledged the company's operational status but highlighted the admitted default in filing Annual Returns. The Tribunal emphasized that non-filing of returns is a rectifiable default, and the company should be restored to the Register of Companies upon compliance with statutory requirements. The Tribunal directed the ROC to restore the company's name and allowed the ROC to impose penalties and interest for the default in filings.

Conclusion:
The Appellate Tribunal set aside the NCLT's order dated 29.01.2020 and directed the ROC to restore the company's name. The company was instructed to file all outstanding financial statements, Annual Returns, and Balance Sheets. The ROC was granted liberty to impose penalties and interest for the default in filings, and the company was required to comply with all statutory requirements. The appeal was allowed with no order as to costs.

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