The Income Tax Department, as a statutory authority, is a 'person aggrieved' under Section 252(3) of the Companies Act, 2013 and can seek restoration of a struck-off company for the limited purpose of completing tax reassessment proceedings for a period when the company was in existence.

Headnote:(A) Companies Act, 2013 - Sections 248, 252(1) and 252(3) - Income Tax Act, 1961 - Sections 143, 144, 147, 153A, 153C and 156 - Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 - Rules 4 and 7 - Appeal to Tribunal for restoration of struck off company - Locus standi of statutory authority - Section 252(3) permits restoration if company was carrying on business, in operation, or if it is otherwise just to restore - The provision is distinct from Section 252(1) and has a 20-year limitation period - The expression "person aggrieved" under Section 252(3) cannot be construed restrictively to exclude statutory authorities like the Income Tax Department. (Paras 35, 36, 51, 62, 63)

(B) Restoration - Just and equitable grounds - Pending tax reassessment proceedings for a period when the company was in existence can justify restoration, even if the company was not carrying on business at the time of strike off - Restoration for a limited purpose to enable completion of such proceedings is permissible - The financial statements filed at the time of strike off cannot conclusively establish absence of statutory liabilities like income tax, which are based on income and transactions. (Paras 55, 56, 60, 61, 65, 70)

(C) Restoration - Limitation - The three-year limitation under Section 252(1) for challenging the validity of a striking off order has no application to a proceeding under Section 252(3), which does not challenge the validity of the order but seeks restoration for a just purpose. (Para 62)

Facts of the case:
The Department of Income Tax filed an appeal under Section 252(3) of the Companies Act, 2013, seeking restoration of the name of a company that was struck off from the Register of Companies on 17.09.2018 following a voluntary application under Section 248(2). The Company had been incorporated on 10.05.2007. Reassessment proceedings under the Income Tax Act for the Assessment Year 2016-17 (Financial Year 2015-16) were initiated against the company on 07.06.2021, after its dissolution. These proceedings culminated in an assessment order dated 26.03.2023 raising a tax demand of Rs. 15,26,160/-. The Income Tax Department argued restoration was necessary to complete these proceedings and recover government dues. The Respondents (the company and its directors) opposed the restoration, contending the department lacked locus standi, the strike off was lawful, the company had no liabilities at the time, and the reassessment proceedings were initiated after dissolution.

Findings of Court:
The Tribunal allowed the appeal, holding that the Income Tax Department is a "person aggrieved" under Section 252(3) and has locus to file the application. The Court found that the pending reassessment proceedings for a period before the company was dissolved constituted sufficient grounds for restoration, as it would be otherwise just to restore the company to enable the department to complete these proceedings. The restoration was ordered for the limited purpose of completing the tax reassessment, not for carrying on business. The Court rejected the argument that the three-year limitation under Section 252(1) applied to this proceeding under Section 252(3).

Issues: The main issues were whether the Income Tax Department is a 'person aggrieved' with locus standi to file an appeal under Section 252(3); and whether the mere existence of a tax demand from reassessment proceedings initiated after the company's strike off constitutes a just ground for restoration of a company that was not carrying on business.

Ratio Decidendi: The court ruled that the term 'person aggrieved' under Section 252(3) should be interpreted broadly to include statutory authorities with a legitimate interest, such as the Income Tax Department pursuing tax reassessment. The court held that restoration can be ordered for a limited purpose, such as completing pending legal proceedings, if it is otherwise just to do so, even if the company was not carrying on business at the time of its strike off. The financial health of the company at the time of strike off is not conclusive of the absence of statutory liabilities. Result : Appeal allowed. The Registrar of Companies was directed to restore the company's name for the limited purpose of enabling the completion of reassessment proceedings and taking consequential steps in accordance with law. The company was also directed to file all overdue statutory returns and financial statements.

Table of Content
1. applicant’s factual background and basis for appeal under section 252(3) of the companies act, 2013 for restoration of struck-off company due to pending reassessment proceedings under income tax act. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10)
2. respondents’ objections: voluntary strike-off was proper, company not carrying business, no liabilities at dissolution, and applicant lacked locus standi. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30)
3. applicant’s rejoinder: income tax department is a ‘person aggrieved’ under section 252(3), restoration is just due to pending tax proceedings. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46)
4. court’s analysis: applicant qualifies as aggrieved creditor; restoration justified as just under section 252(3) for limited purpose of tax proceedings. (Para 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70)
5. final order: appeal allowed; company name restored for limited purpose to complete reassessment proceedings. (Para 71 , 72)

JUDGEMENT

1. This is a Company Appeal No.11/MP/2024 filed under Section 252(3) of the Companies Act, 2013 (the ‘Act’

The Applicant’s case in brief

2. It is submitted that the Company M/s Gyansu Marketing Private Limited was incorporated on 10.05.2007 under the Companies Act, 1956 having Corporate Identity Number(CIN) U52335MP2007PTC019518. The said Company was involved in the business of Other retail trade of new goods in specialized stores.It is further submitted that the certificate of incorporation was issued by Registrar of Companies (ROC), Gwalior, and the company was having Mr. Sandeep Patel and Mr. Dandamudi Kumar Raja as directors of the company.

3. It is submitted that the name of the Company was struck off from the Register of Companies and stood dissolved with effect from 17.09.2018 and notice to that effect was published in the official gazette. A copy of the said order/notice is annexed as Annexure-A and B (Colly).

4. It is submitted that reassessment proceedings under the provisions of the Income Tax Act, 1961 are pending against the Company for the Assessment Years 2016–17, corresponding to Financial Years 2015–16. It is further submitted that notice under Section 156 of the Income Tax Act, 1961 has been issued in respect of the aforesaid assessment year and copy of such notice is annexed as Annexure- E.

5. It is submitted that the present application has been filed by the Income Tax Department pursuant to CBDT Circular No. F.No. 225/423/2017/ITA-II dated 29.12.2017 and 18.04.2018, wherein directions have been issued to file applications for restoration of struck off companies in specified circumstances. A copy of the said Circular is annexed as Annexure C.

6. It is submitted that as per the aforesaid Circular, restoration is required in cases where proceedings under Sections 143(3)/144/147/153A/153C are pending or contemplated, or where departmental appeals, penalty proceedings, prosecution proceedings are pending, or where there is pendency of outstanding tax arrears.

7. It is submitted that in the present case, reassessment proceedings are pending against the Company and therefore the case falls within the conditions specified in the aforesaid Circular.

8. It is further submitted that the Income Tax Department has addressed a communication dated 07.08.2023 to the Registrar of Companies, Gwalior requesting revival of the Company. A copy of the said communication is annexed as Annexure D.

9. It is submitted that unless the name of the Company is restored, the Income Tax Department would not be in a position to effectively proceed with reassessment and recovery proceedings.

10. It is submitted that restoration of the Company is necessary to enable the Applicant to take the pending proceedings to their logical conclusion and to protect the legitimate interest of revenue.

Reply by Respon

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2026 Supreme(Online)(NCLT) 2770

NATIONAL COMPANY LAW TRIBUNALDEPARTMENT OF INCOME TAX – AppellantVersusGYANSU MARKETING PRIVATE LIMITED – RespondentAppeal - 11/2024

The Income Tax Department, as a statutory authority, is a 'person aggrieved' under Section 252(3) of the Companies Act, 2013 and can seek restoration of a struck-off company for the limited purpose of completing tax reassessment proceedings for a period when the company was in existence.

NATIONAL COMPANY LAW TRIBUNAL
DEPARTMENT OF INCOME TAX – Appellant
Versus
GYANSU MARKETING PRIVATE LIMITED – Respondent
Appeal - 11/2024