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TMI Blog1970 (10) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... 68 ITR 295; 38 Comp. Cas. 272 (Mys.) by which a direction was issued to the liquidator to prepare and file returns before the Income-tax Officer with respect to the income of the company in liquidation derived in the course of the winding-up. In the course of winding-up of the company in liquidation, large sums of money came into the hands of the liquidator which could not be immediately applied for distribution of dividends to the creditors. The result was that ho had to invest the same pursuant to the relative provisions of the Companies (Court) Rules. The investments were mostly by way of bank deposits which earned interest in the course of six years from 1960-61 to 1965-66 amounting to Rs. 1,95,364.05. The auditors, Messrs. B.K. Ramad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o income-tax under its appropriate provisions would be liable to income-tax. At this stage, it is necessary to state that the said view of the learned company judge has rightly not been challenged in this appeal. In regard to the second contention, the learned company judge held that it is the duty of the court to see that all the liabilities of the company are properly met in accordance with the provisions of the law and that ,the liability to income-tax is one of the liabilities which the court is expected to provide for in the course of winding up, that the duties of the "principal officer" of the company after the winding-up are got performed by the court through the liquidator in the light of the special provisions of the Companies A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, manager or agent of the company. The argument of Sri Srinivasan was that the liquidator is not the secretary, treasurer, manager or agent of the company. Sri Rajashekhara Murthy, the learned counsel for the respondent, submitted that the liquidator of a company could be regarded as either the manager or the agent of the company in liquidation. In support of his contention, Sri Rajashekhara Murthy relied on the decision in Commissioner of Income-tax v. Official Liquidator of the Agra Spinning and Weaving Mills Co. Ltd. [1934] 2 ITR 79 (All.) In the said case, after the company in question was ordered to be compulsorily wound up, two advocates of the court were appointed official liquidators who,' in the interest of the company, wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a liquidator, all the powers of the board of directors and of the managing or whole-time directors, managing agents, secretaries and treasurers cease (section 491), and the liquidator may exercise the powers mentioned in section 512, including the power to do such things as may be necessary for winding up the affairs of the company and distributing its assets. The liquidator appointed in a members' winding-up is merely an agent of the company to administer the property of the company for purposes prescribed by the statute. In distributing the assets including accumulated profits, the liquidator acts merely as an agent or administrator for and on behalf of the company". (The underlining Here printed in italics is ours). In Knowles v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, as observed by the learned company judge, is to see that the liabilities of the company are properly met in accordance with the provisions of the law. The liability to income-tax is one of such liabilities. The official liquidator is the officer employed under the Companies Act for discharge of the said liability also. He can be rightly termed as the agent of the company. Therefore, the liquidator, on an order for winding up being made, becomes the "principal officer" of the company within the meaning of section 2(35)( a ) of the Income-tax Act, 1961. In that view, the learned company judge was right in requiring the liquidator to file returns before the Income-tax Officer. In the result, this appeal fails and is dismissed, but, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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