Income Tax to file request for restoration of struck off companies name where proceedings are pending

Income Tax to file request for restoration of struck off companies name where assessment, penalty, appellate, or prosecution proceedings are pending-CBDT

In order to curb the paper/shell companies, during the current financial more than 2 lacs companies have been struck  off from the register of companies under section 248(5) of the Companies Act , 2013. 

Though ‘striking off’ such  companies do not affect their obligation to make payment or discharge of liabilities and as such pending demands of Income Tax and right to recover arrears of demand remains unaffected in case of  such struck off companies. However, as a result of being ‘struck off’ from the register, these companies have ceased to exist which creates uncertainty regarding various ongoing assessment/reassessment/appellate/penalty/prosecution proceedings under the Income-tax Act, 1961 

In view of the above Central Board of Direct taxes (CBDT) in the legitimate interest of the Revenue, has decided to make request/appeal for restoration of the name of such ‘struck off’ company from the date of being ‘struck off’ under the following situations :

According to CBDT, while making such request, it is to be emphasized that the concerned company had apparently committed serious violations of provisions of Income-tax Act rendering the entity liable to consequences as per the Income-tax Act and restoration of the company in the register of companies would enable the Income-tax Department to take the pending proceedings to a logical conclusion . It may also be emphasized that since some of the pending proceedings are of time-barring nature, the matter may be taken up most urgently. 

Immediate reference shall be made to the respective regional RoCs by Assessing Officers on a case to case basis for revival of ‘stuck off’ companies in the prescribed format

As an alternative, CBST has advised that jurisdictional Income-tax authorities on a case to case basis shall also file an appeal before the NCLT for revival of ‘struck off’ company immediately. in accordance with section(s) 248 to 252 of the Companies Act, 2013 read with Rule 87A of the NCLT (Amendment) Rules, 2017 and the Companies (Removal of Name of Companies from the Register of Companies) Rules,2016. 

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