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TMI Blog1972 (2) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... not, however, think this argument can be upheld when the applicant only wants leave to proceed in the matter according to the law - - - - - Dated:- 11-2-1972 - Judge(s) : P. N. SHINGHAL. JUDGMENT P. N. SHINGHAL J.-The summons in this case has been taken out by the Income-tax Officer, Central Circle-I. Jaipur, for leave of this court to take legal proceedings against the Golcha Properties (Private) Ltd., in liquidation, hereinafter referred to as "the company", for making an order requiring the company to pay advance tax under section 210 of the Income-tax Act, 1961, for the assessment year 1972-73. The official liquidator has objected to the grant of leave on the grounds that the company is not obliged to pay income-tax on any incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Beni Felkai Mining Co. In that case also, the liquidator of the company carried on its business after the commencement of the winding-up and earned profits on which income-tax was assessed. Maugham J. took the view that as the business of the company was carried on at a profit, the liability to pay income-tax was necessarily incurred as part of the expenses of the winding-up. Sub-section (6) of section 530 of the Act in fact clearly provides for the "retention" of such expenses in priority even to the preferential payments. The sub-section reads as follows: "530. (6) Subject to the retention of such sums as may be necessary for the costs and expenses of the winding-up, the foregoing debts shall be discharged forthwith so far as the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... official liquidator that as section 178 of the Income-tax Act specifically deals with a company in liquidation, that is the only section which can be availed of by the Income-tax Officer in respect of any claim for the payment of income-tax by a company in liquidation, and that it is not permissible for the Income-tax Officer to invoke section 210 at all. On this basis, it has been urged that in a case like the present, where the Income-tax Officer has not notified to the official liquidator any amount of income-tax which would be sufficient to provide for the tax which is likely thereafter to become payable by the company, it is not permissible for him to get over the omission or mistake by recourse to section 210 of the Income-tax Act. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reason that it is payable in advance and not as the actual expense of running the business of the company. Reference in this connection has been made to Tika Ram and Sons (Private) Ltd. v. Commissioner of Income-tax and Official Liquidator, High Court, Calcutta v. Commissioner of Income-tax, and it has been urged that the liability for any debt on account of income-tax is created only after its assessment so that it cannot be proved or paid as a preferential claim. This argument does not appear to me to be based on a proper appreciation of section 4(2) read with sections 207 to 219 of the Income-tax Act, to which reference has been made already, for when the liability to pay the advance tax is there, there is no reason why the official ..... X X X X Extracts X X X X X X X X Extracts X X X X
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