Law: Income Tax Act, 1922

Section: 29,45

Law: Companies Act, (VII of 1913)

Section: 230

Income-tax Act (XI of 1922)----Ss. 29 & 45-Companies Act (VII of 1913)-S. 230-Company in liquidation-Assessment to Income-tax and issue of demand notice after winding up order-Income-tax a debt-Whether Government has priority - over other creditors. The Company was compulsorily wound up under orders of the Court in July, 1949, The Company was assessed to tax for the assessment years 1947-48 to 1950-51 in March, 1953 and demand notices under Section 29 were issued. Thereafter the Official Liquidator was asked to intimate whether the Income-tax claim should be filed with him and if the said claim would be given priority or preferential right over other creditors. The official liquidator referred the matter to the Chief Court for issue of necessary directions. Held, that the claim of the Government had no priority within the meaning of Section 230 of the Companies Act, because the assessments were made and the tax became due and payable long after the winding up order. Durga Parsad Chamaria A I R 1945 P C 62 and Governor-­General-in-Council v. Shirmonai Sugar Mills Limited (1946) 14 I T R 248 ref. Wallace Brothers & Co. Ltd. v. Commissioner of Income-tax Bombay 1960 P T D 934 ref. JUDGMENT INAMULLAH, J.-This is an application under section 183 (3) of the Companies Act by Mr. Raymond, Official Liquidator for certain directions and arises under the following circumstances. This Court on July 21, 1949 ordered that the Exchange Bank of India and Africa Ltd., Karachi, be compulsorily wound up. On the 2nd of March 1953 the said company was assessed by the Income-tax Officer, Companies Circle I for the business it had done. The order of assessment related to the following assessment years :- Rs. (a) Assessment year 1947-48 48,532 (b) Assessment year 1948-49 38,151 (c) Assessment year 1949-50 10,938 (d) Assessment year 1950-51 2,500 The Demand Notices under Section 29 of the Income-tax Act respecting the amount found due for the various assessment years were also issued on the 2nd of March 1953. The Official Liquidator has asked for direction on two questions :- (1) Whether the Income-tax Officer is also bound to file his claim as regards Income-tax amount due…

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