9911796707
TMI Blog2002 (10) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... waiving the demand for interest and penal interest claimed by various creditors. In the affidavit filed in support of the above application, it is stated that the report of the Official Liquidator dated November 1, 2001, shows that totally a sum of Rs. 2,07,67,007 is due by the company to the various authorities enumerated therein and the individual creditors. The factual position of the various amounts due to the Department is as follows: The demand for wealth-tax for the periods 1984-85 to 1992-93 is stated to be Rs. 59,49,151. The interest component claimed under section 31(2) of the Wealth-tax Act, 1957, for non-payment of the demand within 35 days thereof is stated to be Rs. 91,13,057. The total amount claimed is Rs. 1,50,62,248. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficial Liquidator s report dated October 17, 2001, in the bank account totalling in all Rs. 96,96,920.63. The said amount would suffice to pay the admitted or actual amount. The demand for payment of interest is not justifiable and is liable to be waived. The balance of convenience is in favour of waiving the demand for payment of interest. No prejudice will be caused to any person or authority if the same is waived. Though the applicant has furnished details regarding property tax, urban land tax, water tax, commercial tax, etc., it is fairly stated that in this application he is questioning the demand for payment of interest/penal interest towards income-tax. It is stated that payment of interest on wealth-tax, does not arise now in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Though Mr. J. Naresh Kumar, junior standing counsel for income-tax has relied on the judgment of the Supreme Court in the case of Imperial Chit Funds (P.) Ltd. (In Liquidation) v. ITO [1996] 219 ITR 498 1 to the effect that the Income-tax Department is a secured creditor, since the issue relates to waiver of interest/penal interest, I am of the view that except stating that Income-tax Department is treated as a secured creditor, no further discussion is required. Before going into various decisions cited by Mr. M.K. Kabir, learned counsel for the petitioner, it is also relevant to note that tax is due, and interest for the tax amount from the assessment year 1972-73 onwards. Section 156 of the Income-tax Act, 1961, speaks about not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age of justice and injury to contributories. They further held that, if the court is satisfied on the facts of a particular case that the claim for statutory interest under the Income-tax Act, 1961, would amount to hardship, cause grave miscarriage of justice and injury to the contributories, the court has power under section 446(2)( b ) of the Companies Act, 1956, to disallow the Department s claim for interest under section 220(2) on arrears of income-tax. After saying so, their Lordships rejected the claim of the income-tax authorities for the interest. In the case of ITO v. Official Liquidator [1986] 59 Comp. Cas. 514 (Ker.), the dispute related to the claim for interest under section 220(2) of the Income-tax Act. After analysing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a company in the Companies Act and its tax liability under the Income-tax Act held that, if the proceedings to be taken by the liquidator under section 178(3) of the Income-tax Act are taken out of the control and overall supervision of the company judge under section 446 of the Companies Act, then it would defeat the entire scheme of the Companies Act about the disbursement of the company s assets during the winding up proceedings. All the above decisions clearly show the power of the company court under section 446(2)( b ) of the Companies Act, 1956, which overrides any other law more particularly section 220(2) of the Income-tax Act, 1961. The only restriction is that the court has to satisfy on the facts a particular case that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
