Demonetisation Effect: Government Targets Shell Companies, To Serve Notices To 2.25 Lakh Firms

The Ministry of Corporate Affairs is tightening the noose around 2.25 lakh companies, which failed to file tax returns between 2015 and 2017.

The new crackdown on 'shell companies' comes after the government served notices to nearly 3 lakh companies that failed to file returns in 2013-14 period, with 2.26 lakh entities losing their registration.

According to the report by Economic Times, the registrar of companies is in the process of dispatching notices to these entities and a failure to file returns will result in them being deregistered over the next few months.

Many companies, under the scanner this time round, had made suspicious transactions during the demonetisation drive when large sums of cash were deposited into their accounts, said sources.

This is the second straight year when the government is planning to act against those who failed to file the required returns under the Companies Act.