ECONOMIC INVESTMENT CORPORATION LTD Vs. COMMISSIONER OF INCOME TAX W B

JUDGEMENT

(1.) The question involved in this appeal is a short one of law on which much fight is not available from reported decisions. The Meghlibundh Tea Company was liable for income-tax for a certain period. It first sold its tea garden assets to a third party and thereafter on 23-9-47, it changed its name to the Economic Investment Corporation Limited under Section 11 (5) of the Indian Companies Act, 1913. Though the Economic Investment Corporation, that is to say, the appellant before us, duly intimated the Income-tax Officer of the aforesaid change in the name of the company, the Income-tax Officer (Respondent No. 3) made his assessment for the relevant period (1946-47) on the Meghlibundh Tea Company. Thereafter a Certificate proceeding under the Public Demands Recovery Act was started on the allegation that a sum of Rs. 25,000 and odd was due on account of Income-tax from the Meghlibundh Tea Company. At a later stage or the Certificate Proceedings, the Income-tax Officer requested the Certificate Officer that the name of the Economic Investment Corporation be substituted in place of the Meghlibundh Tea Company, Notice having been served under Section 7 of the Public Demands Recovery Act upon the Corporation, that is, the appellants, objection was raised thereto and the certificate against the appellant was cancelled (vide page 46 of the paper book). Thereafter, a notice, under Section 46 (5A) of the Income-tax Act, 1922 was issued for the said demand upon the Manager of the Allahabad Bank Limited, vide page 50 of the paper book, to the following effect:

(2.) Before Banerjee, J. two points were taken at the hearing. (1) That the petitioner as Company could not be proceeded against as the successor of the Meghlibundh Tea Company without assessment proceedings having been taken against the petitioner Company and (2) that the demand under Section 46 (5A) could not be made from the petitioner company in view of the bar under Section 46 (7) of the Act. Before us, on appeal, it is only the first ground which has been pressed by Dr. Pal on behalf of the appellant.

(3.) "At the outset, it must be pointed out that by issuing a notice under Section 46 (5A), the Income-tax Officer is not seeking to pro- ceed against the petitioner company as a 'successor' of the Meghlibundh Tea Company as has been assumed but is seeking to realise the income-tax demand from the Bank who holds money on behalf of the Meghlibundh Tea Company, whose name has since been changed into that of the appellant. Section 46 (5A) runs as follows:--"The Income-tax Officer may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the assessee at his last address known to the Income-tax Officer) require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Income-tax Officer, ....."