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TMI Blog1980 (4) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ince deceased was appointed the official liquidator of the company and by a subsequent order the official receiver was appointed liquidator in place and stead of Mr. S. N. Bhattacharya after his death. By an order dated the 17th of December, 1962, the official receiver was discharged and the official liquidator attached to the High Court, Calcutta, was appointed in the place and stead of the said official liquidator of the said company. By an order dated the 10th of April, 1961, this court appointed Mr. Dhiren Dey, Bar-at-Law, since deceased, as special officer to frame a scheme of partition of the assets of the company. The said Dhiren Dey submitted report to this court which was filed on the 31st of July, 1961. By an order dated the 23rd of February, 1962, made by this court, the assets were allotted to the contributories of the company and the income was directed to be distributed to the said contributories of the company as mentioned in the order except that certain properties were kept earmarked for meeting the liabilities of the company. Several attempts were made by the official liquidator to sell the said properties to meet the liabilities of the company but due to objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvalid. The Commissioner referred the matter to the CBDT directing the Commissioner to move this court for permission for charging interest under s. 220(2) of the I.T. Act, 1961. In these circumstances, the present application is made by the official liquidator for condoning the delay in the payment of income-tax and for remission of the said income-tax for the assessment years as mentioned above. Mr. Pallab Banerjee, appearing for the official liquidator, submitted that the present case is an unfortunate one and very peculiar, where for no fault of the contributories who are the only beneficiaries in the winding-up of the company to get refund of the capital by way of dividends out of the sale proceeds of the properties of the company, most of which have already been sold leaving behind only a few. It is admitted that all the arrears of income-tax have been paid out of the sale proceeds and it is further admitted that pursuant to the previous order dated the 23rd February, 1962, of Mr. justice S. P. Mitra, as he then was, the assets of the company were allotted pursuant to the report of the Commissioner of Partition appointed by the court on the 10th of April, 1961, and the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances, it will be gross injustice and hardship on the contributories if the said penalty is imposed and the company is made liable to pay the same for no fault of the contributories. It is purely due to mismanagement and misunderstanding to which the I.T. authority has contributed considerably. Therefore, Mr. Banerjee submitted that this is a fit case where the court should direct the I.T. authority to remit the interest and, condone the delay in payment in the interests of justice and the contributories should not be penalised for no fault of their own for nonpayment of their income-tax dues of the company by the official liquidator. Mr. Ajit Sengupta, appearing for the respondent, the ITO, submitted that the imposition of the interest for non-payment of the taxes is statutory provision under s. 220(2) of the I.T. Act, 1961, and, therefore, the I.T. authority has to impose the said statutory liability. The said liability arose due to default on the part of the liquidator to pay the income-tax which fell due on raising the demands by serving notices on the company represented by the official liquidator. It is submitted that the Commissioner was directed to move this cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contributories of the respective allotted under the scheme of partition by the order dated the 3rd of February, 1962, and he had not sufficient funds to pay the income-tax dues. The circumstances of the present case are very peculiar and to some extent unfortunate. As I have already mentioned there was also a huge defalcation out of the rents collected from the properties of the company (in liquidation) by the staff of the official liquidator's office who were entrusted with the said collection. That is also a factor for lack of funds on the part of the official liquidator to pay taxes in time. However, after most of the properties of the company (in liquidation) have been sold and out of the sale proceeds all arrears of income-tax have been paid in full, it will be, in my opinion, unfair and unjust to saddle the company (in liquidation), with the liability to pay the interest under s. 220(2) of the I.T. Act, 1961, and in effect deprive the innocent and helpless contributories of the company of their legitimate share by way of dividend and return of capital. It is true that the I.T. authorities are not in position to forgo the statutory interest under s. 220(2) of the I.T. Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute would amount to hardship, cause grave miscarriage of justice and injury to the contributories who are innocent and helpless citizens of India. As in this case, if the history of the present company (in liquidation), is gone into, it would appear that due to sheer carelessness on the part of certain contributories and inefficient, irresponsible and to some extent unscrupulous management by the official liquidator's office, it has put the company in liquidation in such an embarrassing condition. As I have already observed a solvent company was wound up due to the internecine squabble between the ex-directors and the group of contributories which was the cause for the winding up of the company and administration by the official liquidator through the court. Therefore, this is a fit and proper case where the claim of the I.T. authorities for the interest should not be allowed as the court has ample power under s. 446(2)(b) read with r. 9 of the Companies (Court) Rules, 1959, which gives the power to this court notwithstanding any Act and any other law which includes the I.T. Act, s. 220(2), to pass an order for the ends of justice as may be necessary. Therefore, considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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