Will The Move to Deregister 1.20 Lakh Companies Help Square-up Black Money?

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Modi Government is all set to bulldoze black money by deregistering 1.20 Lakhs more companies for not complying the provisions of Company’s Act.

This step has been taken by the Government against the companies/firms in the backdrop of the failure of various compliance of company ethics and for being inactive since long.

Earlier in November, 2017, the Government struck off around 2.24 Lakhs companies including shell companies which were inactive for more than 2 years. The registration of these companies had been cancelled by the government for non-filing returns of three consecutive years 2013-14 to 2015-16 and did not submit annual statement to the Ministry of Corporate affairs.

Last year, Narendra Modi has directed to the Enforcement Directorate and the Income Tax Department to find list of shell companies who supports by siphoning off black money.

In a move towards curbing of black money, the Enforcement Directorate and Income Tax authorities had made surprised raids and issued Tax notices to both individuals and companies who were suspected to have unaccounted money. Even the Government disqualified directors and auditors of these companies having engaged in illegal transactions. While corporate industry has made allegation that many innocent directors suffered by this act of the government and the3 tax authorities.

The Income Tax Department is mulling over to scrutinize those companies and individuals who had deposited huge cash in banks account before demonetizations and during relaxation period of demonetization.

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