- (1.) THE revenue has filed an application under Section 256(2) of the Income Tax Act seeking direction to the Income Tax Appellate Tribunal (for short the Tribunal) to refer the following substantial question of law for opinion of the Court: Whether on the facts and circumstances of the case, the Tribunal was right in holding that in the case of the companies, which are under liquidation, Section 104 of Income Tax Act would have no application and consequently erred in quashing the proceedings under Section 104 of the Income Tax Act initiated in the case of the assessee company ?
(2.) ASSESSMENT pertaining to the assessment year 1979 -80 was completed on 23 -6 -1982. During the course of the assessment it was found that the assessee had not declared the dividend for the year ending on 31 -3 -1979. A notice was issued under Section 104 of the Income Tax Act (for short the Act). The assessee replied the notice stating that the company is under liquidation and the Official Liquidator is managing the affairs of the company for the benefits of the creditors. The assessing authority did not agree with the contention of the assessee and created the liability of payment of tax vide order dated 20 -3 -1984. The assessee preferred an appeal before the Commissioner (Appeals), which came to be rejected. The assessee further preferred appeal before the Tribunal. The Tribunal held that the provisions of the Act are not applicable to the Official Liquidator and set aside the orders of the lower Courts. The revenue filed an application before the Tribunal for reference of the aforementioned substantial question of law to the High Court for opinion. The Tribunal rejected the application observing that the Rajasthan High Court in the case of the assessee in CIT v. Golcha Properties (P) Ltd. : (1988) 169 ITR 493 (Raj) has , answered the issue. Under these circumstances, this application has been filed under Section 256(2) of the Act for the reference of the aforesaid substantial question of law.
(3.) WE have heard learned Counsel for the parties and perused the record.;