CBDT Wants Restoration Of 4,000 De-Registered Shell Companies To Recover Unpaid Taxes

Amidst the government’s crackdown on numerous shell companies, the Central Board of Direct Taxes (CBDT) wants about 4,000 such firms to be restored to collect unpaid taxes, reports The Hindu BusinessLine.

This move finds its rationale in the development that owing to de-registration of a large number of shell companies over the past few years, the CBDT is left with no means to recover tax dues from many of the now de-registered shell firms.

“If there is no identity of the companies, whom do we chase to recover our dues from? So the applications are being filed for restoration,” a CBDT spokesperson said.

The CBDT which functions under the administrative control of the Ministry of Finance has built consensus with the Ministry of Corporate Affairs (MCA) over the issue, with the latter asking it to file the restoration application with the National Company Law Tribunal (NCLT).

As a result, the CBDT has directed its field formations across the nation to file applications with the NCLT for the restoration of shell companies.

The Union Government had struck off around 2.26 lakh shell companies in the first drive from FY14 to FY15, while another 1,00,150 companies were struck off between FY16 and FY17 in a bid to counter tax evasion, money laundering, obscuring ownership and benami properties.