Mukherji, J. - (1.) THIS Bench was constituted in order to decide four points, which are enumerated in the order of one of us dated 8th September, 1933. Point 4 alone has been argued because it has been found that the other three points do not arise at the present moment. If point 4 be answered in the negative, the liquidators will have to make a "return," and it is at the time of making the return that questions 1 to 3 would arise. The official liquidators if there be any difficulty, will be at liberty to approach the Hon ble the Company Judge and obtain direction. When a return has been furnished, it will be for the Income Tax Officer to scrutinize it and to object to any item, if there be one to take exception to. We therefore proceed to decide point 4 on which alone we have been addressed by learned Counsel for the official liquidators and the legal adviser to the income-tax authorities. The point for decision is: Whether under the Companies Act a liquidator is exempt from making an income-tax return on business managed by him for the beneficial winding-up of the company ?
(2.) JUST a few facts would be necessary to be stated in order to lead up to the questions before us. It appears that there was a limited company doing business in Agra, called the Agra Spinning and Weaving Mills Company, Limited. At the instance of one of the creditors a compulsory winding-up was ordered on 24th June, 1931. Two gentlemen, being advocates of this Court, were appointed official liquidators. Later on it was reported by the official liquidators to the Company Judge that "in the interest of the Company it is necessary that the business of the Company should be carried on ; so permission may be granted to that effect with powers to the official liquidators to dismiss, employ and maintain such staff for the mills as they may consider proper." This report was approved by the learned Company Judge. It appears that since this order was passed on 27th June, 1931, the business of the company as it was carried on before the liquidation, is being carried on under the direction and supervision of the official liquidators. The Income Tax Officer at Agra called on the official liquidators to make a return under Section 22(1), Income Tax Act. There was a large amount of correspondence, and ultimately the official liquidators thought that they were not liable to make any return at all because the company had gone into liquidation. The Income Tax Officer wanted a ruling of the Court on this point, and that is how the point is now before us. We have heard learned arguments on both sides, and we proceed to record our opinion. Under Section 3, Income Tax Act, 1922, every individual, Hindu undivided family, " company" firm and other association of individuals are liable to income-tax. The argument on behalf of the official liquidators is that a company which has gone into liquidation is no longer a " company within the meaning of Section 3, Income Tax Act, and therefore no income-tax can be assessed on the liquidators as representing the company. The word " company " is defined in Section 2(6), Income Tax Act as follows: Company means a company as defined in the Indian Companies Act, 1913.... The Agra Spinning and Weaving Mills Co., Ltd., was therefore a company within the meaning of the Income Tax Act. A company once formed and registered would continue to be a company until it is dissolved under Section 194, Companies Act. Prima facie, therefore, a company as defined in Section 2(6), Income Tax Act, would include a company in liquidation.
(3.) THE arguments against this conclusion are these : First of all, it is said that there can be no " principal officer " of a company in liquidation, and unless the " principal officer " of a company in liquidation, can be determined, no tax can be assessed. Reliance is placed on Section 22(1), Income Tax Act, which runs as follows: THE principal officer of every company shall prepare, and, on or before the 15th day of June in each year, furnish to the Income Tax Officer, a return in the prescribed form... THE argument is that if there can be no principal officer of a company in liqudation, there can be no assessment, because the method of assessment laid down in the Income Tax Act cannot be followed. THE expression " principal officer " is defined in Section 2(12), Income Tax Act, as follows (we shall read only so much of it as is material for our purpose): principal officer used with reference to... a company . means the secretary, treasurer, manager or agent of... the company, or any person connected with the... company... upon whom the Income Tax Officer has served a notice of his intention of treating him as the principal officer thereof. It is true that when the winding-up order was made the previous officers of the company ceased to hold office, and thus the former secretary, treasurer, manager or agent disappeared from the scene. But we find that the liquidators are actually managing the business of the company, and we may safely take it that the liquidators come under the word " manager " as used in Clause (a), Sub-section (12), Section 2. The word "manager" is defined in the Companies Act as follows: Manager includes any person occupying the position of a manager, by whatever name called and whether under a contract of service or not. ;