9911796707
TMI Blog1978 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... aken to get the sanction from the liquidation court. For the delay the ITO levied Rs. 6,228 as interest under s. 220(2) of the I.T. Act, 1961. When the demand for that amount was made, the learned single judge passed the order from which this appeal has been filed. By that order after finding that the provisions of s. 446(1) and (2) of the Companies Act, 1956, applied to the levy and demand of interest; the ITO was restrained from enforcing the claim for interest in any manner other than that provided for in those provisions. Now, s. 220 of the I.T. Act, so I far as is relevant for the present purpose, reads : "(1) Any amount, otherwise than by way of advance tax, specified as payable in a notice of demand under section 156 shall be pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960 ......" Section 446(1) of the Companies Act prohibits the commencement of any legal proceeding after the making of a winding-up order except with the leave of the court. There is dispute as to whether the demand by the ITO of interest levied by him under s. 220(2) of the I.T. Act after the winding-up order is not a legal proceeding as contemplated by s. 446 of the Companies Act. In Governor-General in Council v. Shiromani Sugar Mills Ltd. [1946] 14 ITR 248; 16 Comp Cas 71, the Federal Court held that proceeding regarding recovery of income-tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the decision in Governor-General in Council v. Shiromani Sugar Mills Ltd. [1946] 14 ITR 248 (FC) is applicable to recovery proceedings regarding tax. This was made clear in the later portions of the decision in S. V. Kondaskar v. V. M. Deshpande [1972] 83 ITR 685 (SC), wherein the decision of the Mysore High Court in Mysore Spun Silks Mills, In re : Official Liquidator v. CIT [1968] 68 ITR 295; 38 Comp Cas 272, was discussed and cited with approval. In the Mysore case, it was held that for the purpose of quantification or collection of income-tax, the ITO had to obtain the leave of the winding-up court. One reason given by the Supreme Court in S. V. Kondaskar v. V. Al. Deshpande [1972] 83 ITR 685, for, holding that s. 446(1) and (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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