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TMI Blog1970 (10) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the court was delivered by GOVINDA BHAT J.- This is an appeal brought on behalf of the official liquidator of the Mysore Spun Silk Mills Ltd. (in liquidation) against the order of the learned company judge (Narayana Pai J.), as he then was, made in Company Application No. 16 of 1967 on 23-1-1968 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 he had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the learned company judge held that, even after a winding-up order is passed, the company continues to be a person within the meaning of section 4 of the Income-tax Act, and, therefore, any receipt of income in the course of the winding-up which would attract liability to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his intention of treating the liquidator as the principal officer of the company in liquidation. Therefore, the only question is whether the liquidator comes within the class of persons mentioned in clause (a) of section 2(35) of the Act, namely, the secretary, treasurer, 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 Rajashekharamurthy, 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 Rajashekharamurthy relied on the decision in Commissioner of Income-tax v. Official Liquidato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l then the company has corporate existence and corporate powers. The property of the company does not vest in the liquidator : it continues to remain vested in the company. On the appointment of 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 asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is represented by the liquidator who functions as its agent for the purpose of winding-up. One of the duties of the court, 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 requir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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