Law:

Section:

Section 178(1) of the Income-tax Act, 1961 - Company in liquidation - Assessment year 1963-64 - Petitioner was appointed liquidator on 28-10-1963 - He sent on 17-11-1963, a letter to ITO with return etc., making it clear that he was addressing ITO in his capacity as liquidator - On 13-12-1963 he informed that in view of loss there were no income-tax arrears and he proposed to distribute funds to shareholders - Loss return was accepted by ITO on 19-1-1965 - However, on 17-4-1966 Commissioner revised assessment order raising tax liability, which was sought to be recovered from liquidator personally under section 178(4), as amended from 1-4-1965 - Whether letter dated 17-11-1963 could be construed as a notice of appointment as liquidator - Held, yes - Whether amended provisions of sub-sections (3) and (4) could not apply since liquidator had been appointed in 1962 and notice of appointment, had been duly and substantially given on 17-11-1963 - Held, yes - Whether since ITO did not notify petitioner disputed amount of tax within three months from 17-11-1963, he could not be held personally liable for amount in dispute brought to tax by Commissioner in year 1966 - Held, yes FACTS The company H went into voluntary liquidation and the petitioner was appointed on 28-10-1963, as liquidator. On 17-11-1963, the petitioner in his capacity as liquidator submitted a letter to Income-tax Officer a return enclosing the balance-sheet and profit and loss account for the assessment year 1963-64. The said letter made it clear that he was addressing the Income-tax Officer in his capacity as liquidator. In letter dated 13-12-1963, the Income-tax Officer was told that due to loss there were no income-tax arrears, that income-tax advance and the contingent liability for income-tax were taken over by the Syndicate Bank and that in view of the fact that sufficient provision to meet the contingent liability of income-tax having been made already, he was proposing to distribute the funds to the shareholders. The assessment order was passed on 19-1-1965, accepting the petitioner's return of loss. But the said assessment was, revised by the Commissioner on 7-4-1966, and this resulted in the…

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