NCLT Indore Restores Struck-Off Company On IT Department's Plea, Affirms Locus As “Creditor” U/S 252(3)

The Indore Bench of the National Company Law Tribunal (NCLT) on 4 May allowed an appeal filed by the Income Tax Department seeking restoration of a struck-off company, holding that the Department qualifies as a “creditor” under Section 252(3) of the Companies Act, 2013 and is entitled to seek revival to pursue pending reassessment proceedings.

Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta allowed the appeal and directed restoration of Adaptec Real Estate Pvt. Ltd. in the register of companies maintained by the Registrar of Companies. The Bench held:

“The Income Tax Department, being empowered to assess and recover tax dues arising from the period when the Company was in existence, has a legitimate and subsisting interest in the affairs of the Company. Even though the tax liability may not have crystallized on the date of striking off, the pendency of reassessment proceedings indicates a potential statutory claim. Therefore, the Appellant cannot be said to lack locus to maintain the present Appeal.”

Adaptec Real Estate Pvt. Ltd., incorporated in 2009 and engaged in contractorship activities, was struck off by the Registrar of Companies, Gwalior, with effect from 5 May 2016 under Section 248(2) of the Companies Act, 2013.

The Income Tax Department sought restoration of the company on the ground that reassessment proceedings for Assessment Years 2014–15, 2015–16, and 2016–17 were pending. It stated that notices under Section 148 of the Income Tax Act had been issued and approvals under Section 151 had been obtained.

The Department also relied on CBDT circulars issued in 2017 and 2018, which advised restoration of struck-off companies where tax proceedings were pending or contemplated. It further submitted that restoration was necessary to enable completion of the pending reassessment proceedings and recovery of any consequential tax liability.

Adaptec opposed the appeal, contending that it was coercive in nature and aimed at extracting money towards an alleged liability. It argued that the Income Tax Department was neither a “creditor” nor an “aggrieved person” under Section 252(3), and that the appeal had been filed without disclosing a valid cause of action. The company also submitted that no tax demand or assessment order existed at the time of striking off, and that reassessment proceedings were initiated only thereafter.

The Tribunal held that the expression “creditor” under Section 252(3) cannot be read in a narrow sense so as to exclude statutory authorities. It observed that the Income Tax Department, as an authority empowered to assess and recover dues, has a legitimate interest in the affairs of a company for the relevant assessment years.

It further noted that the pendency of reassessment proceedings constituted a valid basis for seeking restoration, and that such proceedings relate to periods when the company was in existence. The Bench added that issuance of notices after striking off does not defeat the Department's locus.

Accordingly, the NCLT ordered restoration of Adaptec Real Estate Pvt. Ltd. in the ROC register, limiting the relief to enabling completion of reassessment proceedings and consequential actions.

For Appellants: Advocates Harsh Parashar and Yashika Bondwal

For Respondents: Advocates Rajat Lohia