Ca/19/2014 Of Official Liquidator Of v. The Deputy Commissioner Of Income Tax

1. IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 2[nd]DAY OF JUNE 2015 BHFOREH THE HON’BLE MR. JUSTICE ANAND BYRAREDDY|COMPANY APPLICATION NO.19/2014 IN COMPANY PETITION Nos.143 & 193/2011 BETWEEN: OFFICIAL LIQUIDATOR OF M/S. DECCAN CARGO AND©EXPRESS LOGISTICS PVT LTD., IN LIQN)ATTACHED TO HIGH COURT OF KARNATAKACORPORATE BHAVAN, NO.26-27, 12TH FLOORRAHEJA TOWERS, M G ROAD,BANGALORE 560 001..APPLICANT. (By Sti KK S MAHADEVAN & Strt V JAYARAM, OFFICIAL LIQUIDATORS AND: 1.THER DEPUTY COMMISSIONEROF INCOME TAX CIRCLE 11(1)5TH FLOOR, R P BHAVANNRUPATHUNGA ROAD|BANGALORE 560 OO1 |OF INCOME TAX CIRCLE 11(1)5TH FLOOR, R P BHAVANNRUPATHUNGA ROAD|BANGALORE 560 OO1 | 2.THER DEPUTY COMMISSIONER OFINCOME TAX, TDS, CIRCLE 16(1),ATH FLOOR, NO. 59, HMT BHAVAN, |BELLARY ROAD, GANGANAGARBANGALORE-560 032INCOME TAX, TDS, CIRCLE 16(1),ATH FLOOR, NO. 59, HMT BHAVAN, |BELLARY ROAD, GANGANAGARBANGALORE-560 032 2.THE COMMISSIONER OF INCOME TAX~ CENTRAL PROCESSING CENTRE, | POST BAG NO.2, ELECTRONIC CITY POST OFFICE, BANGALORE-560 100. ». RESPONDENTS (By Sn K V ARAVIND, ADV.) This company application is filed Under Section 446[2][b] & [d] ofthe Companies Act, 1956 R/w Rules 6 & 9 of the Company [Court] Rules,|1959, praying that the respondents herein be ordered and|decreedto payto the applicant a sum of Rs.20,20,651/- with interest at 6% per annum|from 11.06.2013 to till the date of the judgment and future interest or any|other rate fixed by this Hon'ble Court and etc., This application coming on for orders, this day, the Court made thefollowing: ORDER The learned counsel for the respondent remains absent. It is seen that this Court vide order dated|30.10.2014, has recorded that the respondents in spite oftaking sufficient time has not clarified the position as to| whether the refund from the Income Tax Department oughtto be deposited in the account of the company in liquidation. Time having been granted repeatedly, there 1s little response| from the respondents. It was also recorded by this Coutt|that this Court would be left with no option but to allow the application in the absence of furnishing of details. Inspite of,subsequent adjournments, there 1s little response from therespondents. 2.Heard the learned counsel for the OfficialLiquidator. 4.The present application in CA.No.19/14 is filedin the tolowing background:- The company in liquidation was ordered to be woundup by this Court by order dated 11.6.2014 in Co.P.No.143_and 193/11. The erstwhile Managing Director of thecompany in liquidation by his letter dated 19.9.2013 1s said tohave informed the Official Liquidator that there is an income,tax refund of the company to the extent of Rs.20,20,651/-,and that the refund draft had been returned with the postal|shara that “party had shifted’’ on account of the registeredoffice of the company being locked. The Official Liquidator 1s said to have issued a demand notice dated 23.10.2013 to|Deputy Commissioner of Income Tax, Circle-11(1),|Nrupathuga Road, Bangalore, to pay the amount with|interest within fifteen days from the date of receipt of notice.The notice is said to have been duly served on the authority.In accordance with the provisions of Section 456(2) of theCompanies Act, 1956, all the property and assets of the|company are deemed to be in the custody of the Court fromthe date of the order of winding up of the company. Interms of the provisions of Section 441 of the Act, the date of,winding up order comes into effect from the date of filing ofwinding up petition. The Deputy Commissioner, Income|Tax, Circle 16(1), Bangalore, is said to have replied that thereturn of income for the assessment year 2012-13 has been|processed by the Department and refund is determined and|as on date, the total arrears pending in the case amounts to|Rs.30,87,260/-, and it was proposed to adjust the refund towards arrears and it was thus intimated, to which, the|Official Liquidator had filed his objections to state that in|terms of Section 537 of the Companies Act, 1956, it was|obligatory to obtain leave of this Court before imposing any|attachment, distress or sale of properties of the companyagainst which winding up proceedings are pending and anysuch action without the permission of this Court would be illegal and void. It 1s in this background that the present|application is filed. 4AIt 1s not in dispute that it has been verified that|the refund has been processed by the Department andrefund order was to be revalidated as demand draft payable|to the Official Liquidator attached to the High Court of|Karnataka. It was indeed said to have been communicated|by the first respondent to the third respondent, but there was_no revalidation of the refund order and the demand draft isyet to be received by the Official Liquidator. It is in this| background the present application has been filed and theOfficial Liquidator claims that he 1s entitled to recovery ofamount of Rs.20,20,651/- with interest at 6% per annumfrom 11.06.2013 till date with future interest. 5.Therespondent-Departmenthasfiled.itsstatement of objections to contend that the proceedings,under Section 201(1)of the Income Tax Act were initiated by|the second respondent for the assessment year 2011-12 and|2012-15 tor default committed in not deducting the tax at|soutce in respect of payments made by the assessee and alsonon-remittance of the tax deducted at source into the|Government account and the demand for Rs.2,11,74,015/- for the assessment year 2011-12 and a sum_ ofRs.1,51,37,049/- for the assessment year 2012-13 was raisedand in view of Section 245 of the Income Tax Act which|provides for set off of the amount to be refunded or any pattof that amount, against the sum, if any, payable under the| Act by the person for whom the refund is due, it is claimedthat the Department ts entitled to adjust the refund amount.Theretore, exercising the power under Section 245 of the|Income Tax Act, the respondent has sought tor adjustment|of the amount. The learned counsel tor the Official|Liquidator however would submit that even if any such.atreats ate to be set off against the refund to be made, it 1snot open for the respondents to unilaterally do_ so,notwithstanding the power available under Section 245. It is,only if leave is granted by this Court that any such.adjustment could be made and therefore, the application be allowed and the respondent be directed to refund the|amount. In the absence of the respondent seeking leave of,this Court to make any such adjustment of the refundamount that is due to the company in liquidation, the|respondent is ordered and directed to pay a sum of|Rs.20,20,651/- with applicable rate of interest at which the �50129��4C��934'72957�'98?5:/�421?57/�8'12����%���%�-� 7(66�7.9�:479�18�34&2957�� L46=� �� ��� +� ����������������������������������������������������������