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2025 Supreme(Online)(NCLT) 4078
NATIONAL COMPANY LAW TRIBUNAL
Shri Rajeev Bhardwaj, J, Shri Sanjay Puri, T
The Income Tax Department Office of the Income Tax Officer, Ward-16(3), Hyderabad – Appellant
Versus
The Registrar of Companies Telangana – Respondent
Company Appeal/30/252/2025
For the Appellant: Ms. B. Sapna Reddy, Junior Standing Counsel of IT Department
For the Respondent: Mr. Ravi Metta, DRoC for RoC office
NCLT affirmed the Income Tax Department's status as a creditor, allowing restoration of a struck-off company for pending tax assessments under Companies Act provisions.
Headnote:(A) Companies Act, 2013 - Section 252(3) - Jurisdiction of NCLT - Restoration of struck off company for tax assessment - The Income Tax Department appealed for the restoration of M/s. Mark Well Software Private Limited’s name to facilitate tax recovery proceedings, asserting income escaped assessment due to non-filing of returns. (Paras 1, 11, 13)
(B) Income Tax Act, 1961 - Assessment proceedings - The Appellant contended that multiple notices under the Income Tax Act went unanswered due to the company's struck-off status, impeding tax recovery; NCLT recognized the department as a ‘creditor’ entitled to restoration for assessment purposes. (Paras 9, 10)
Facts of the case:
The company had been non-compliant for over two years, leading to its name striking off; significant undisclosed income necessitated its restoration to facilitate tax assessments and recover taxes due.
Findings of Court:
The NCLT found it just to restore the company's name for completion of pending assessments and recovery of taxes, given its business engagement at the time of striking off.
Issues: Whether the striking off of a company impedes the completion of tax assessments and recovery actions against it.
Ratio Decidendi: The court ruled that the Income Tax Department qualifies as a ‘creditor’ under Section 252(3) facilitating restoration to recover income due tax assessments.
Result: Appeal allowed and company’s name restored.
| Table of Content |
|---|
| 1. filing history and tax assessments of the struck-off company (Para 1 , 2) |
| 2. nclt's jurisdiction over restoration requests (Para 3 , 4 , 6 , 7 , 8 , 12) |
| 3. income tax department's status as a creditor (Para 9 , 10) |
| 4. legal grounds for restoration of the company (Para 11) |
| 5. final order regarding the company's status (Para 14) |
ORDER
1. The instant Company Appeal CA No. 30/252/HDB/2025 is filed by the Income Tax Department (Appellant/IT Dept.), Office of the Income Tax Officer, Ward-16(3), Hyderabad, under Section 252 of the Companies Act, 2013 , inter alia, seeking to set aside the proceedings of the Registrar of Companies (ROC/1st Respondent) striking off the name of M/s. Mark Well Software Private Limited (Company/2ndRespondent), vide Notice No. ROC- (H)/248(5)/STK-7/Drive 111/1347/2019 dated 29-10-2019 and to direct the 1st Respondent to restore the name of the Company on the Register maintained by the Registrar of Companies (ROC) in order to enable the Appellant to complete and finalize the Income Tax proceedings pending as on date, and collect taxes due thereon.
2. The gist of the Appeal, in brief, is as follows -
2.1. M/s. Mark Well Software Private Limited was incorporated on 22.12.2014, with CIN: U72200TG2014PTC096911, having its Registered Office at 6-3-652, Flat No. 204, Amrutha Estate Somajiguda, Hyderabad – 500082 Telangana, India. The Authorised Share Capital of the Company is Rs. 10,00,000/-(Rupees Ten Lakh Only). The issued, subscribed and paid-up share capital of the Company is Rs.1,00,000/-(Rupees One Lakh Only).
2.2. The Company, M/s Mark Well Software Private Limited failed to file its return of income for the Assessment Year 2017–18.
2.3. It is stated that income amounting to Rs 1,53,64,000/- was found to have escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961 , for the financial year 2016–17.
2.4. A notice under Section 148 was issued on 28.03.2024 within the extended time limit provided under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, and related notifications. The assessment proceedings are currently pending.
2.5. Despite multiple notices, including under Sections 148 A(b) dated 29.02.2024, 148A(d) dated 28.03.2024, 148 dated 28.03.2024, and 144B dated 12.07.2024, the assessee did not respond or comply. In addition, a show-cause notice under Section 144 dated 13.09.2024 for A.Y. 2020–21, and multiple notices under Section 142(1) dated 16.07.2024, 31.07.2024, 13.08.2024, and 10.01.2025 were issued for A.Y. 2017–18 but went unanswered.
2.6. Since the company remains struck off and non-compliant, revival is essential to complete pending assessment proceedings and recover tax dues under the Income Tax Act.
2.7. A letter was addressed to the Registrar of Companies requesting revival of the company. Further, approval was granted by the Pr. Commissioner of Income Tax-4, Hyderabad, vide letter F.No.Pr.CIT- 4/ITO HQ-2/NCLT/2024-25 dated 27.01.2025, for filing the present petition before the Tribunal.
2.8. Further it is submitted that due to striking off of the name of the Company, the fate of proceedings is uncertain and the means of conducting the Income-Tax proceedings as well as collection of any tax arrears, subject to the outcome of such proceedings have become impossible. The restoration of the struck off Company is requested to protect the legitimate interest of the revenue. Restoration of the Company would enable the Income Tax Department to recover the demand and take the pending proceedings to a logical conclusion.
2.9. It is submitted that the Company has committed serious violations of provisions of the Income Tax Act, 1961 . In order to carry out income tax proceedings, it is necessary that the Company should be in existence as a legal juristic person so that proper action can be taken against the Company and its Directors.
2.10. If the name of the Company is not restored in the Register maintained by ROC, great prejudi
