May 24, 2018

IT-department to file pleas in NCLT to extract tax due from shell firms


The Income Tax (I-T) Department is an "aggrieved creditor" to many de-registered shell companies and will petition the National Company Law Tribunal (NCLT) to recover tax dues of crores of rupees.

The Central Board of Direct Taxes (CBDT) has directed the I-T Department to form a special team of officers to complete the task of filing these petitions in various NCLT benches across the country by this month-end, and has written to the Ministry of Corporate Affairs seeking its help. The CBDT, the policy-making body for the department, is concerned over crores of rupees of its “legitimate” taxes being stuck, after these shell firms were de-registered by the government in the recent past as part of its drive against black money and fraud business operations.

The PTI has accessed a letter written recently by the CBDT to all its regional chiefs stating that the tax department is an "aggrieved creditor" vis-a-vis these struck-off shell companies and the taxman should hence undertake all efforts to file these petitions to get its dues from them.

"A good amount of information is already in the possession of the department in this context and this will be finalised once the entire data is compiled by the deadline of May 31," a senior official said.

The CBDT believes that the appeals for "restoration" of these firms are required to recover tax dues and "protect the legitimate interests of revenue".

A Standard Operating Procedure (SOP) has been issued by the CBDT in 2017 for the tax department for filing such appeals that stated that shell firms against whom the department has pending cases of departmental appeal, penalty and prosecution among others will be petitioned before the NCLT.

The CBDT said that the Ministry of Corporate Affairs has informed it about issuing "suitable directions to all regional directors and Registrar of Companies (RoCs) to extend cooperation to the tax department while filing applications for restoration of name of struck off/de-registered companies before the jurisdictional NCLT bench".

The ministry has also told the CBDT that its regional directors and RoCs will "not oppose" the tax department's applications before the NCLT.

The CBDT said it has also requested the ministry to intimate the regional RoCs to ensure issue of "public notice" of striking off or de-registration of companies to the designated nodal officers of the tax department in the country.

The Board instructed the taxman to swiftly respond with a "statement of objection" and status of pending tax arrears in a case-to-case basis against those firms whom the tax department thinks is required to be 'held on' for realisation of taxes.

The CBDT also told the department to harness the data available against such firms in the public domain. It has also asked the ministry to help it in identifying companies already struck-off or de-registered by furnishing to it a list of all such cases during the 2017-18 financial year.

As part of the Modi government’s policy drive to curb the black money menace, the Corporate Affairs Ministry had in the past one year deregistered little over 2.26 lakh companies for not carrying out business activities for long.

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