COMMISSIONER OF INCOME TAX Vs. CHOWDHURY RAMZAN ALI

JUDGEMENT

(1.) This appeal by special leave arises out of a judgment passed by a Division Bench of the High Court in Company Appeal No. 6 of 1968.

(2.) The Income Tax Officer, Companies Circle, made an assessment u/s. 23 of the Income Tax Act for the year 1962-63 demanding Rs. 11,98,326/- as tax from the Official Liquidator, Dacca Electricity Development Company under liquidation. The Commissioner of Income Tax sent demand to the Official Liquidator, who rejected the demand on the ground that it was time barred. Thereafter the Appellate Commissioner of Income made an application before Company Judge for direction on the Official Liquidator to make provision for payment of the demand in respect of the income tax and super tax assessed for the assessment year 1962-63 from the fund of the Company in liquidation. The Company Judge rejected the application on the ground that the price offered by the Government was not for sale but for the .compulsory acquisition of machinery, plants, etc. of the Company and the Company had ceased to be an assessee on acquisition by the Government. It is further held that the provision u/s. 10(1)(vii) of the Income Tax Act, as amended by the Finance Act, 1962 was not attracted because the price offered by the Government was not for the sale but it was price for acquisition of machinery, plants, etc, of the Company. An appeal was preferred against the order of the Company Judge and the said appeal was heard by a Division Bench of the High Court which dismissed the appeal.

(3.) Leave was granted to consider substantial questions of law involved in the case, namely, whether the High Court was wrong in holding that provisions of section 10(1)(vii) was not attracted, whether the High Court was wrong in failing to hold that the Company Judge has no jurisdiction to adjudicate the validity or otherwise or an assessment made under the Income Tax Act in view of the fact that the Income Tax Act itself provides special forum for challenging the assessment made under the said Act, and whether the High Court was correct in holding that the Company was not an assessee since 31-5-57.