Assistant Commissioner of Income Tax vs Official Liquidator

The respondent-company is in liquidation and Official Liquidator has been appointed on a winding up order passed in the petition filed by the Reserve Bank of India. It seems that the respondent-company is in some liability qua Income Tax Department. In the search and seizure, conducted by the Income Tax Department, certain documents were seized which included fixed deposit receipt as well. Since the company is in liquidation, Income Tax Department filed CA No. 600/2002 seeking permission from the Company Judge to encash FDR. The learned Company Judge passed orders dated 16-10-2003 in the said application observing that since claims are yet to be invited by the Official Liquidator and the amount is lying in the Fixed Deposit Account, no effective order could be passed and the FDR shall be renewed by the bank on its maturity until further order of this Court.

Challenging that order, the present appeal is preferred by the Income Tax Department. We are informed that in the year 2005, Official Liquidator has invited the claims, but Income Tax Department did not prefer any claims. On the other hand, learned Counsel for the Income Tax refers to the provisions of Section 178 of the Income Tax Act and submits that as per the said provisions, the obligation of the Financial Liquidator has to inform the Income Tax Department before selling any of the properties if the company is in liquidation. It is also stated in the rejoinder filed by the Income Tax Department that, with regard to, outstanding Income Tax against the company, claim was filed on 24-1 -2002 which was refused vide letter dated 10-2-2004. It is also stated that up to date, claims of the Income Tax Department was conveyed to the Official Liquidator vide letter dated 16-9-2008 but the Income Tax Department did not respond to the letter inviting claims.

However, it is clear from the aforesaid communication addressed by the Income Tax Department to the Official Liquidator that the Income Tax Department has alleged its claim with the Official Liquida-tor. Therefore, aforesaid letters would be treated as claims with the Official Liquidator and Official Liquidator shall proceed further accordingly.