Sambasiva Rao, Actg. C.J.
1. This application raises an interesting question under the Income-tax Act vis-a-vis the Companies Act.
2. The Income-tax Officer, A-Ward, Nellore Circle, Nellore, has filed this application to direct the official liquidator to file the income-tax return of Messrs. Civil Supplies Corporation (in voluntary liquidation), Pamur, for the assessment year 1966-67. From the averments of the application, it is seen that the company was brought under voluntary liquidation and on completing the work, the voluntary liquidator submitted a report, but unfortunately, he died in January, 1974. As required by Section 497(6) of the Companies Act, the official liquidator has to make a scrutiny of the books and papers of the company in the light of the report that had been submitted by the voluntary liquidator, and if on such scrutiny the official liquidator makes a report to the court that the affairs of the company had not been conducted in a manner prejudicial to the interests of its members or to public interest, the same sub-section declares that from the date of the submission of that report to the court the company shall be deemed to be dissolved. It is stated in the application that the official liquidator is now making a scrutiny of the books and papers of the company. That is also admitted by the official liquidator.
3. Now, the situation being this, the income-tax department contends that the official liquidator is the ' principal officer ' within the meaning of Section 2(35) of the Income-tax Act, 1961, and so, he can be called upon to file a return for the assessment year 1966-67. The circumstances, as mentioned above, are not in dispute. The liquidation work had been completed by the voluntary liquidator himself and he had also filed a report. The only task that is entrusted to the official liquidator under the Companies Act is to scrutinise the accounts and books of the company in the light of that report and submit his own report to the court. The ' principal officer ', within the meaning of Section 2(35); Sub-clause (b), on which Sri P. Rama Rao, learned counsel for the revenue, relies is ' any person connected with the management or administration of the local authority, company, association or body upon whom the Income-tax Officer has served a notice of his intention of treating him as the principal officer thereof'. Now, there are certain requirements which should be satisfied before a person becomes the 'principal officer' within the meaning of Section 2, Clause (35). It would not suffice if the Income-tax Officer merely serves a notice on him treating him as the 'principal officer'. He must also be a person connected 'with the management or administration' of the company.
4. Could it be said, in the circumstances of the case, that the official liquidator is a person connected with the 'management or administration' of the company The circumstances disclose that he is in no manner connected either with the management or administration of the company. The liquidation work had been completed by the voluntary liquidator. The only work that is statutorily entrusted to the official liquidator is to scrutinise the books and records of the company and submit a report in other words, he is assisting the court, but is not either managing or administering the company. He has no control over the company or its assets or its affairs. Indeed, he has no concern whatever with its management or administration. It is not, therefore, proper to call the official liquidator, who is discharging the functions under Section 497(6) of the Companies Act, the 'principal officer', within the meaning of Section 2(35) of the Income-tax Act. If he is not a principal officer, he has no liability or duty to file any income-tax return.
5. Consequently, this application for directing the official liquidator to file the income-tax return on behalf of the company is untenable. It is, accordingly, dismissed, but, in the circumstances of the case, without costs.