Income-Tax Officer vs Registrar Of Companies And Ors.

Sumita Purkayastha, (Member Technical)

This Appeal has been filed by Income-tax Officer, Ward 3(4), New Delhi invoking the provisions of Section 252(1) read with Sec.252(3) of the

Companies Act, 2013 for restoration of the name of the Respondents Company M/s. Axon Tradelinks Private Limited, 2753, Kucha Chalan, Darya

Ganj,New Delhi 110 002 in The register maintained by the Registrar of Companies, NCT of Delhi & Haryana. The respondent- company is engaged

inTrading activities as its principal business.

As per the averments, M/s. Axon Tradelinks Private Limited was incorporated on 01.10.2009 as a private limited company and has its registered

office at 2753, Kucha Chalan, Darya Ganj,New Delhi 110 002 having CIN No. U51101DL2009PTC194839 . The Authorized share capital of the

Company is Rs.1,00,000/- and paid up share capital of the Company is Rs.1,00,000/-.

The directors of the company, being, Iqbal Singh and Shujatt Hussain Mallick and Baber Alam Malik have been arrayed as Respondent No. 3 and

Respondent No.4 respectively.

It is submitted by the appellants that ITD System reflects that during A.Y. 2011-12, the respondent company declared an income of Income of

Rs.6,027/- in the ITR for A.Y. 2011-12 on 31.03.2012. Information was received from Assistant Director of Income â€"tax Officer (Investigation),

Unit-2(1) that respondent company has opened a current account and used the same for rotating funds. Upon enquiries, it was found that the company

and Directors are untraceable and no reply to summons was received. Therefore, Investigation Wing concluded that the credit entries of

Rs.62,90,000/- from Grassroots Marketing Pvt. Ltd., to the respondent company are unexplained as the identity, genuineness and creditworthiness of

M/s. Grassroots Marketing Pvt Ltd was not established. Receipts of Rs.62,90,000/- from M/s. Grassroots Marketing Pvt Ltd are not normal business

transaction as the respondent company has not shown any sale/ turnover during F.Y. 2010-11. Therefore, appellant has reasons to believe that an

estimated amount of at least Rs.62,90,000/- has escaped assessment within the meaning of Section 147/148 for A.Y. 2011-12 thereby rendering the

respondent â€"company liable for consequences under Income Tax Act, 1961 and entitling the Revenue to initiate proceedings against the company.

The case of respondent company has ben re-opened u/sec.147 of IT Act for assessing the transactions in the hands of the company. Appellant issued

Notice dated 31.03.2018 u/sec.148 of Income Tax Act for AY 2011-12 for initiating assessment proceedings.

On perusal of the MCA website, the appellant has come to know that the name of the respondent company was struck off vide Notification dated

08.08.2018 at Sr. No.2499, in terms of provision of Section 248(1) of the Companies Act, 2013 read with Rule 7 and Rule 9 of the Companies

(Removal of Names of Companies from the Register of Companies) Rules, 2016 by the ROC.

It is submitted by the appellant that the name of the respondent company had been struck off by the ROC without enquiry and the same was not

intimated to the Appellant, Assessing Officer Income-tax or the concerned Commissioner of Income Tax. The same could not be allowed to be

invoked resulting in escapement of tax liability or any other liability on the company which seeks to get its name removed from the Register of the

RoC.

The appellant submitted that the Income Tax department being aggrieved under the Section 252 of the companies Act 2013 by the removal of the

name of the company from the register by the registrar of the company as for the reopening of assessment proceedings the company has to be in

existence for framing Assessment Order for recovering the taxes due and for any further consequential proceedings against the respondent-company.

It is further submitted that since the respondent company has become non-existent entity, the respondent company and its directors are trying to

escape the assessment proceedings and the liability that will arise out of the said proceedings.

The appellant has further submitted that in order to initiate proceedings for assessment of income against the respondent â€" company for AY

2011-12 whcih are pending and getting time barred by limitation on 31.12.2018 as per the provisions of Sec.153(2) of Income tax Act, 1961. To render

assessment order valid in the eyes of Law and to enable the Appellant to take steps for recovery of taxes and for any further consequential

proceedings, the respondent- company’s name be restored to the Register of Companies as if the name of the company was never struck off.

Denial to restore the name of the respondent company in the Register of the ROC will not only condone the wrong doing of the respondent

company but it will also encourage of escapement of tax liabilities by such subterfuge which will be prejudicial to the interest of the revenue in the long

run. The service of notice to respondents has been made through publication in newspaper, but none appeared.

The respondents failed to appear before the Court to provide its defence. Hence, the Order was reserved on 8.12.2020. Upon perusal of the

documents and submissions made, this appeal is allowed. The Registrar of companies is 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 respondent in accordance with the statutory provisions. The

name of the respondent Company shall then, as a consequence, stand restored to the Register of the Registrar of Companies, as if the name of the

company had not been struck off in accordance with Section 248(1) of the Companies Act, 2013.

The appeal is disposed of accordingly.

Let the copy of the order be served to the parties.