NCLT New Delhi Restores Struck-Off SL Contractors Only to Enable Recovery of ₹7.62 Crore in Tax Dues
Pranav B Prem
The National Company Law Tribunal (NCLT), New Delhi, has restored the name of SL Contractors Private Limited in the Register of Companies solely to enable the Income Tax Department to recover outstanding dues amounting to ₹7.62 crore. While allowing the appeal filed under Section 252(3) of the Companies Act, the Tribunal refused to accept the company’s contention that it was operational when it was struck off and made it clear that restoration was warranted only in the interest of revenue recovery.
The Bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri observed that “the Appellant has failed to establish that the Company was carrying on business or was in operation at the time of strike-off.” The Tribunal noted that the company had last filed statutory documents for the financial year 2015–2016 and had not filed annual returns and financial statements for subsequent years. It further recorded that the company had remained non-compliant “even up to the date of the present appeal” and had furnished only unaudited financial statements that could not be verified.
The company, incorporated on 14 March 2014, was struck off in October 2019 following a public notice issued under Section 248. The appellants sought full restoration and claimed that non-compliance occurred due to the sudden demise of their compliance professional. They asserted that the business was active and relied on invoices, bank statements and income tax filings to demonstrate continuity of operations. However, the Tribunal held that prolonged failure to meet statutory filing obligations could not be treated as an inadvertent lapse and that the explanations offered did not justify years of defaults.
The Registrar of Companies opposed the restoration and submitted that the company had shown nil revenue in recent years and had made no effort to regularise filings even after it was struck off. The Tribunal accepted this position and recorded that the company had not produced credible material to show that it was operational during the relevant period. It also noted that a challenge to the strike-off procedure itself should have been filed under Section 252(1) within three years, which had not been done.
What ultimately influenced restoration was the report of the Income Tax Department dated 18 July 2025 confirming pending tax demands against the company. The Department reported that ₹7,62,76,240 was due pursuant to a notice under Section 147 of the Income Tax Act, along with an additional penalty of ₹10,000, and that proceedings under Sections 271AAC(1) and 271A were also pending. While the Department did not oppose restoration, it requested that restoration be granted to enable continuation of recovery proceedings.
The Tribunal held that although the appellants had not demonstrated that the company was operational, restoration was still necessary to allow enforcement of tax liabilities. It observed that “the outstanding demand by Income Tax Department is a sufficient ground to restore a company in the Register of Companies,” citing judicial precedent affirming that restoration may be allowed in the interest of revenue.
Accordingly, the appeal was allowed but only on strict conditions. The Tribunal directed that the restoration would be subject to (i) payment of ₹9 lakh to the Prime Minister’s Relief Fund, (ii) clearing outstanding tax dues along with applicable interest and producing proof before the Registrar of Companies, and (iii) filing all pending statutory documents within 45 days from the date of restoration. It further directed filing of a certified copy of the order with both the Registrar of Companies and the Income Tax Department within 30 days of receipt. The Tribunal clarified that its order does not prevent the Registrar from taking action for any other violations committed before or during the period of strike-off.
Ultimately, the company’s name was restored not because its business was proven to be ongoing, but solely to enable the Income Tax Department to recover outstanding tax dues, and the appeal was disposed of on those terms.
Appearance
For Appellant: Advocates Aayushmaan Vatsyayana, Vansh Pandey, and Gourav.
For Respondent: Senior Standing Counsel Puneet Rai, with Junior Standing Counsels Rishabh Nangia, Ashwini Kumar and Advocate Nikhil Jain for Income Tax Department.
Cause Title: SL Contractors Private Limited & Ors. V. Registrar of Companies & Anr.
Case No: Company Appeal No. 174/252/ND/2024
Coram: Judicial Member Ashok Kumar Bhardwaj, Technical Member Reena Sinha Puri
