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Four lakh companies may face deregistration for not filing IT returns

By Newsd
Updated on :
Source: indianexpress

As large numbers of Indian companies have failed to file their returns for three financial years, more than a third of the 11 lakh active Indian companies face the chances of their names being struck off or deregistered. The development is as part of the check on shell companies.

Lately, notices are being directed to over four lakh companies that have failed to file returns for 2013-14 and 2014-15. These companies have also not filed their returns for the 2015-16 financial years. However, the window for filing has not completely closed.

These companies are being specified 30 days to file their returns. And now, if they fail, the government proposes to strike off their names. The ministry of corporate affairs (MCA) will also make their names public to confirm that the defunct companies are incapable to undertake transactions. They will share info about the companies and their directors with the income tax department, banks and the RBI.

Although the Companies Act offers companies to seek a “dormant” label, very few have actually chosen it. At the end of March 2015, there were 14.6 lakhs companies. Only10.2 lakhs were active with just 214 categorized as dormant.

The threat of names being struck off has encouraged companies to file their returns, said sources to TOI. “We do not know if these companies actually transact any business or are just paper companies. First, we need to know their status,” said a source justifying the action by MCA.

Now, the government is also classifying corporations that have little turnover but have issued shares at a bulky premium or have huge capitals. The acknowledged cases will then be sent for further inquiries. The government is taking several steps against shell companies, which were mainly found to have deposited cash during demonetization.