OFFICIAL LIQUIDATOR Vs. V M DESHPANDE

JUDGEMENT

(1.) THIS is a judge's summons taken out by the official liquidator of the Colaba Land and Mills Co. Ltd. for an order that certain notices dated 23rd August, 1966, and 31st December, 1966, taken out by the Income-tax Officer and the proceedings taken pursuant thereto be quashed, and for an order that, if necessary, the respondents be directed not to proceed with those notices till further orders of this court, and on such terms as the court might impose and be restrained from in any way assessing or reassessing the Colaba Land and Mills Co. Ltd. in liquidation for the assessment years 1950-51 to 1955-56.

(2.) THE facts necessary for the purpose of this application are that the Colaba Land and Mills Co. Ltd. was ordered to be wound up, and the applicant was appointed liquidator by this court by its order dated 7th October, 1959. The entire undertaking of the Colaba Land and Mills Co. Ltd. had been sold on 21st May, 1958, and all the records (except the financial books) of the undertaking maintained by the company had been handed over to the purchasers for the purposes of running and working the said undertaking. On 23rd August, 1966, the Income-tax Officer served on the official liquidator, who is the applicant before me, notices under Section 148 of the Income-tax Act, 1961, proposing to re-open the assessment of the company and to reassess the company in respect of the assessment years 1950-51 to 1955-56. Copies of those notices have been annexed to the affidavit in support of the present judge's summons and collectively marked " C". On 31st December, 1966, the Income-tax Officer served further notices under Section 142 (1) of the Income-tax Act, 1961, upon the official liquidator, calling upon him to produce the accounts and documents specified on the reverse of the said notice and to furnish certain information called for by him. At the foot of the said notices it was stated that failure on the part of the official liquidator to comply with the terms of the said notices would not only result in an ex parte assessment against the company but might also entail a penalty under Section 271 of the Income-tax Act or even prosecution under Section 276 of the said Act. Certain negotiations thereafter ensued between the official liquidator and the Inspecting Assistant Commissioner of Income-tax which, however, proved infructuous. The official liquidator has stated that, in view of the fact that all the books of account, except a few of them, had already been handed over to the purchasers of the undertaking, he was not in a position to comply with the said notices. It has further been contended by the official liquidator that no case has been made out for the reopening of the assessment by the income-tax authorities, but I am not concerned with these contentions on the present summons.

(3.) THE main contention raised before me is to be found embodied in Clauses (a), (b) and (c) of paragraph 26 of the affidavit in support filed by the official liquidator on the present summons, and that is, (1) that reassessment proceedings against the company, if at all, can only be instituted or commenced after first obtaining the leave of the court which is winding up the said company under Section 446 (1) of the Companies Act, 1956 ; (2) that, without such leave, the reassessment proceedings instituted or commenced and the action taken in furtherance or in pursuance thereof by income-tax authorities were a nullity ; and (3) that the reassessment proceedings and the notices referred to above had been issued without jurisdiction or were barred by the provisions of the Companies Act, 1956, as, after the commencement of the winding-up of the company, all claims and questions arising under or in relation to the winding-up of that company can only be determined by the court which is winding up the company.