Law:

Section:

JUDGMENT Narayana Pillai, J.-This is an appeal from the order of a learned single judge functioning as a company judge and reported as Official Liquidator v. ITO [1978] 111 ITR 398 (Ker). After a winding-up order was passed regarding a company, the ITO demanded from it the tax due from it. That was paid by the official liquidator. But there was a delay of seven days in paying it. That was due to the time taken to get the sanction from the liquidation court. For the delay the ITO levied Rs. 6,228 as interest under s. 220(2) of the I.T. Act, 1961. When the demand for that amount was made, the learned single judge passed the order from which this appeal has been filed. By that order after finding that the provisions of s. 446(1) and (2) of the Companies Act, 1956, applied to the levy and demand of interest, the ITO was restrained from enforcing the claim for interest in any manner other than that provided for in those provisions. Now, s. 220 of the I.T. Act, so far as is relevant for the present purpose, reads : "(1)Any amount, otherwise than by way of advance tax, specified as payable in a notice of demand under section 156 shall be paid within thirty-five days of the service of the notice at the place and to the person mentioned in the notice :... (2)If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at twelve per cent. per annum from the day commencing after the end of the period mentioned in sub-section (1)............" and s. 446 of the Companies Act: "(1)When a winding-up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding-up order, shall be proceeded with, against the company, except by leave of the court and subject to such terms as the court may impose. (2)The court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of- (a)any suit or proceeding by or against the company ; (b)any claim…

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