| Case ID |
1f4625cc-dcbc-4d2c-a3ca-f7d921a74eb2 |
| Body |
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| Case Number |
ORIGINAL SIDE APPEAL No. 4 OF 1968 |
| Decision Date |
Oct 14, 1970 |
| Hearing Date |
|
| Decision |
The court held that upon an order for winding-up being made, the liquidator becomes the 'principal officer' of the company as defined under section 2(35)(a) of the Income-tax Act, 1961. The company does not cease to exist after a winding-up order is passed and remains liable for its income tax obligations. The company judge was justified in directing the liquidator to file income tax returns concerning the income generated during the winding-up proceedings. The decision emphasized that the liquidator functions as an agent of the company and is responsible for ensuring that all liabilities, including income tax, are properly addressed in accordance with the law. |
| Summary |
In the case of Official Liquidator, Mysore Spun Silk Mills Ltd. v. Commissioner of Income Tax, the Mysore High Court addressed critical issues concerning the responsibilities of a liquidator during the winding-up process. The court clarified that even after a winding-up order, a company retains its corporate existence and thus continues to be liable for income tax. The ruling established that the liquidator, appointed by the court, acts as the 'principal officer' under the Income-tax Act, 1961, which is crucial for compliance with tax obligations. The court affirmed the necessity for liquidators to file returns for any income generated during the winding-up, ensuring that all liabilities are met appropriately. This case underlines the importance of understanding the legal status of companies in liquidation and the role of liquidators in managing tax responsibilities, making it a significant reference for future cases involving company law and tax liabilities. |
| Court |
Mysore High Court
|
| Entities Involved |
Income Tax Department,
Mysore Spun Silk Mills Ltd.
|
| Judges |
G.K. Govinda Bhat,
K. Jagannatha Shetty
|
| Lawyers |
Srinivasan,
S.R. Rajashekhara Murthy,
G.R. Ethirajulu Naidu
|
| Petitioners |
Official Liquidator, Mysore Spun Silk Mills Ltd.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1971 SLD 447,
(1971) 79 ITR 399
|
| Other Citations |
CIT v. Official Liquidator of the Agra Spinning and Weaving Mills Co. Ltd. [1934] 2 ITR 79 (All.),
Hari Prasad Jayantilal and Co. v. V.S. Gupta, ITO [1966] 59 ITR 794 (SC),
Knowles v. Scott [1891] 1 Ch. 717 (Ch. D.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
2(35),
4
|