oO IN THE NATIONAL COMPANY LAW TRIBUNAL, SINGLE. BENCH ‘NEW DELHI Appeal No.256/2017 INTHE MATTER OF SECTION 282 (1) AND 252 (3) OF THE COMPANIES ACT, 2013. In the matter of: Pr. Commissioner of Income Tax Delhi-6 (M/s Nexus Marketing Pvt. Ltd.) Registrar of Companies, NCT of Delhi & Haryana, 4° Floor, IFCI Tower, 61, Nehru Place, New Delhi-110019, Coram: R.VARADHARAJAN, Hon’ble Member (JUDICIAL) APPELLANT «= RESPONDENT.Counsel for the Petitioners: Mr. Zoheb Hossain, Sr. Standing Counsel for Income Tax Department ‘Counsel for the Respondents : Mr. Manish Raj, Co. Prosecutor Order delivered On: 13.03.2018 ORDER ‘The present Appeal has been preferred by the Principal Commissioner, Income Tax DeIhi-6 in relation to orders ofthe Registrar of Companies passed under Section 560(5) of the Companies Ac, 1956 dated 29.8.2011. The Appellant further represents that the Respondent RoC by virtue of the said order dated 29,8.2011 has struck the name of M/s Nexus Marketing Pvt Ltd. (for brevity] the Company, bearing CIN No.U51109012007PTC159451 and the said Company was having PAN No.AACCNS460G. The striking off, itis avered in the Appeal has arisen based on the Company filing the application availing. Fast Track Ext Mode, 2014 Scheme announced by the Central Government vide General Circular No.36/2011 dated 07.06.2011. According to the Appellant - income Tax 2ipage Fe. Commissioner of income Tax vs, Registrar of Componies Appest No.256/201 oOauthority, the assessee has not filed the return oft income forthe year 2010-11 even though the assessee Company has recelved an amount of Rs.6,04,280 and that Ld. Assessing Officer has reasons to belleve that income has escaped assessment based on Form 26AS as_alko to ascertain the undisclosed income With a view to ensure that the said income does not escape the iby to tax, has Proposed reopening of the assessment under Section 147/148 ofthe Income Tax ‘Ac. 1961 and in the interest of revenue has fled this Appeal before tis Tebunal seeking for restoration of the name of the Company. 2 Ud. Sr. Standing Counsel for income Tax Department appearing for the ‘Appellant also cites in support of the appeal the case filed by the Income Tax Department in Appeal No.213/2017 in the matter of Pr. Commissioner of income Tax Delhi (M/s New Ways Steels Private Limited) vs. Registrar of Companies and the order delivered by the Hon'ble Principal Bench on 21.12.2017 and represents that the case is apposite to the present one and in the circumstances seeks for restoration of the name of the Company in the register of RoC and thereby to Drotect the interest of revenue. Perusal of the above order cited before this ‘Tribunal of the Hon'ble Principal Bench and the facts enumerated therein and the 31pane Pr Commissioner of tacome s. Registrar of Companiesconclusion arrived there at is relevant for consideration and in the Circumstances the order is reproduced as follows ORDER “This sppeal under Section 252 (1) read with Section 252 (9) of the Companies Act, 2013 has been preferred by the Principal Commissioner of income Tax, Delhi with « prayer for restoring the name of the Avsessec’ in the “egister of the Registrar of Companies and by quashing the netifeation dated 10.05.2014 passed by the Registrar of Companies who has removed the name of the Assessee company nemely M/s, New Ways Steels Private Limited which has caused serous prejudice to the interests of the revenue, ‘The respondents Registrar of Companies as well os M/s. [New Ways Steels Private Limited have been serves, The Registrar of Companies has filed its reply on 20.12.2017. ‘The matter carne up for hearing yesterday i.e. 20.12.2017 when we asked the Registrar of Companies to produce the srginal record joncerning this case and the prosess which ha: been followed for striking off the names of thousands of compenies by issuing, fone order, The name of the M/s. New Ways Steels Private Limited from the register of the Registrar of Companies has also been struck off in the same fashion. The baaie object was to ascertain whether any notice to the Acorssing olficer/Jurisdictional Commissioner of income Tax was inwuca before accepting the application of the compary for striking olf its name. The stand of the Registrar of Companies is that the Feapondent company fled an aldavit under the voluntany exiet scheme, Learned counsel for the petitioner has pdnted out that one Mr. Sachin Garg, Director of M/s. New Ways Steels Private Limited fled an affidavit dated 08.01.2014 deposing in para 8 that on the date of the fling the affidavit the company did not ‘have any dues of Income tax/Sales tex/Central Bxcize/Banks and Financial Institutions or any other Central of State Gorerament Departmnents/Authorities or any Local authorities, It was also deposed in para 9 that no litigati: was pending ‘against or involving the company namely M/s. New Ways Steals Private Limited. The other Director also filed amilar” affdavit making the same statements 7 ; 4lPoee Appeal No.256/2017 7 aPe wv When the matter came up for hearing yesterday we have asked for production ofthe original Mle concerning tis case and the maiter was adjourned for today ic. 21.12.2017. in the forenoon session today it war stated on behalf of Registrar of Companies that the original fle would be produced in the fallernoon session. There is urgency in the mater because the petitioner-revenue ia likely t incur @ loss of revenue ea there is Jhuge demand on behalf of the revenue. However, the original record concerning this matter has not been produced, Wie are unable to appreciate the stance of che Registrar of Companies by not producine the record aiid the voluntary exist scheme itself In view of the above we find that prima-face the affidavit fled by the erstwhile Directors of M/s. New Waye Steels Private Limited is patently false as the petitioner revere has pointed fut that there has been tax demand of Rs. 1.9699,770/-whieh is outstanding as on date against the scseseee including the interest calculated til 25.10.2017. According to the order dated 30.12.2009 the Income Tax Offices, Ward No, 13 (2), New Delhi framed the assessment and held that sum of Rs, ,80,00,000/. alleged to have been received by the assessee company against share capital issued by it waa held to be unexplained cash credit tunder Section 68 of Income Tax Act and the same was to be treated as the income of the aseessce. Acordingly, the ‘assessment was framed and penalty proceedings were ordered (9 be initiated under Section 271 (1) ‘The Commissioner income Tax (Appeal) reversed the order ofthe Assessing Officer on 22.06.2012 and the matter was taken to the Income Tex Appellate Tribunal which en 2607-2017 restored the assessment order passed by the Income Tax Officer. It is thus obvious that the Directors of M/s. New Ways Stocls Private Limited had fled fale affidavit with regard to the fact ‘hat no litigation was pending on 01.02.2014, Its obvious tht the appeal before the Income Tax Appellate Tribunal on that date was pending and the aforesaid fact has been ‘mis sated and ‘uppressed. It was also incumbent upon the Regatrar of Companies to issue’ appropriate notice to ascertain the authenticity of the statement made in the afidavit by the Directors of Ms. New Ways Steels Private Limited! Obviously the Registrar of Companies miserably failed to performs hie duty. SiPaee Commissioner of Income Tax vs. Registrar of CompaniesIn view of the above we find that there i a prima-facie case to restore the name of the company on the Register of the Registrar of Companies in order to protect the interest of the revenue. Accordingly, we pass an interim order restoring the ‘name of the company. M/s. New Ways Steels Private Limited for the purposes. of issuance of demand by the Income Tax Department, ‘The aforesaid course is being slopted as the erstwhile Directors of the company are not prevect. Lat fresh notices be issued to the erstwhile Directors of the company returnable on 19.02.2018. On the adjourned date the original record concerning thie ‘case shall be produced by the Registrar of Company. If the ‘original record is not produced then the Regitrer of Companies shall remain present in the Court Notices be given dast A copy of the order be given dasti under the signatures of the Bench officer. List for further consideration on 19.02.2018" 3. However, on facts there seems to be a significant difference between the fone on hand and the order cited by the Ld. Senior Standing Counsel as extracted above. It is seen in the instant case that the Income Tax Department is yet to quantify the tax demand in elation to the Company whose name has been struck off and dissolved based upon the instigation of the persons in the management of the company, namely the 2" and 3" respondent, as evident from the individual affidavits filed by these respordents declaring that the ‘Company (ie. Nexus Marketing Private Limited) does not have any dues towards bl rose Pr. Commissioner of Income Tax vs, Registrar of Companies Appeal No.250/2017 Or'ncome Tax or any other Central or State Government Department/Authorities or ‘any Local Authorities, 4. When queried in this connection by this Tribunal about the provisions of Section 179 of income Tax Act1961 where tax due in relation to @ private limited company In respect of any Income of any previous year cannot be recovered from the Company, then recourse can be had to Section 179 ofthe sald Actas it can be recovered from directors of such company who are made_ jointly and severally liable, i represented bythe La, Senior Standing Counsel thatthe tox due is yet to be quantied and in view of the name of the Company in the meanwhile having been struck off without notice to it, the assessment was not able to be completed as against the Company and henee the appeal seeking restoration, 5. If that were so will it enable the income Tax Department to file this appeal Seeking for restoration in itself is @ moot point. Section 560(6) of Companies Act, 1956 prior to its repeal stood as under: HY company, or any member or creditor there, feels sesrieved by the company having been stuck of the reiter, the Tribunal on an appistion made by the company, member or creditor before the expy of twenty Year ‘rom the publeation in the Official Gazette ofthe notice sores, may 71Pese Pr. Commissioner of tacome Tax vs. Registrar of Companiae OYsatisfied thatthe company was, at the time of the striking of, caring on basnes orn operation or there that ts thatthe canpary be restored to te register, order the name of the company tobe restored tothe repste and the (Tobunal] may, By the order, ge such drections and snake such ‘rovisions at seem jurt for placing the company anda ote petsons In the same pasion as nearly as may be as ifthe name ofthe company had nt bean struck Presently after the provisions of Section 252 Companies Act of 2013 which was notified and stands enforced with effect from 26.12.2016, sub-section (3) of Section 252 reads as follows: If a company, or any member or creditor or werkman thereof {eels agarieved by the company having its name struck off from the register of companies, the Tribunal on an agplication made by the company, member, creditor or workman before the expiry of twenty years from the publication in the Official Gazette of the notice under sub-section (5) of section 248 may, if satisfied that the company was, at the time ofits name being struck off, carrying on business or in operation or otherwise it is Just that the name of the company be restored to the register ‘of companies, order the name of the company to be restored to the register of companies, and the Tribunal may, by the order, sive such other directions and make such provisions as deemed just for placing the company and all other persons in the same position as nearly as may be as ifthe name of the company had not been struck off from the register of companies. alPoge Pr. Commissioner o! income Tax vs. Registrar of Companies Appeal No y6. The above provision gives aright to file an appeal seeking for restoration of the name of the Company which has been struck off to the following categories, namely: company or i) any member or Il) Creditor or iv) Workman (by virtue of 2013 Act). ‘Thus Income Tax Department can fll at best under the category of Creltor, Provided tax or any other demand or sum is due under the Act from the Company which had been struck off. In the order cited as above of the Hon'ble Principal Bench, NCLT by the Ld. Senior Standing Counsel itis seen that at the time of striking off, a demand for tax was in place, however pending before the appellate authorities in appeal nthe instant case no such demand has crystalized and nothing has also been spectied as due in the appeal. 7. Im the absence of any demand having been raised or even the estimate of ‘ax that may be due having also not been disclosed any where in the appeal, we S]raee Pe. Commi Bistear of Companies Appeo! No.256/2017 ware unable to appreciate, merely based upon mere reatons to believe on the part of the Income Tax Authority that income has escaped assessment, the department can prefer this appeal seeking for restoration of the name of the Company which has been struck off Its pertinent to point out in this ease that Subsequent to the notice being served to one of erstwhile Directors of the Company namely, Mr. Hem Prakash Sharma, represented by his Advocate has expressed its desire to settle the tax demand, if any, as may be raised by income Tax Department in relation to the Company. 8 This undertaking is taken on record and the Appellant will proceed accordingly against the other respondents Jn ase if any taxis found due all subject to the provisions of income Tax Act, 1961 and in accordance with law. In the circumstances this appeal stands dismissed accordingly without costs. MEMBER (JUDICIAL) vomens apo 10[P 250 Pr. Commissioner of lacome Tax vs. Regi Appest No.255/2097