This is a petition filed on behalf of the Union of India through the Commissioner of Income-tax praying that the claim of the petitioner amounting to Rs. 16,500 should have been admitted by the official liquidator and that his refusal to admit the claim to the extent of Rs. 16,500 is not justified in law. The present dispute relates to tax amounting to Rs. 16,500 claimed by way of penalty. The order of the income-tax authorities claiming the tax has been admitted by the official liquidator. There were four assessment years. For the year 1951-52, penalty order was passed by the Income-tax Officer on 25th November, 1952, imposing a penalty of Rs. 12,000. The Appellate Assistant Commissioner, by his order dated 5th March, 1954, reduced the penalty to Rs. 6,500. There was no appeal from this order by the assessee. With regard to the assessment for the year 1952-53, penalty order of Rs. 2,000 was passed by the Income-tax Officer on 3rd April, 1954, and this was not challenged in appeal. For the assessment year 1953-54, penalty order was passed on 23rd August, 1954, imposing a penalty of Rs. 4,000. This order was not challenged in appeal. For the assessment year 1954-55, penalty order was passed on 14th April, 1956, imposing a penalty of Rs. 4,000. This order was also not questioned in appeal. Thus the total penalty imposed upon the company is Rs. 16,500. The company was ordered to be wound up on 13th January, 1956.
It is contended on behalf of the Union that the relevant penalty orders referred to above could not be questioned by the official liquidator. He has cited Commissioner of Income-tax v. Bhikaji Dadabhai & Co., for the proposition that the penalty imposed under the Income-tax Act is in the nature of an additional tax. My attention has been drawn by Mr. D.N. Awasthy, learned counsel for the petitioner, to In re Kaithal Grain and Bullion Exchange, in which Falshaw J. held that where no statement of account was filed and the notice for production of accounts had not been complied with and consequently a company was assessed on an estimated income under section 23(4) of the Income-tax Act, no appeal having been filed, the order became final. Such an order could not be reopened by the official liquidator of the company in liquidation proceedings. The learned single judge had placed reliance upon an English case in In re Calvert, in which Wright J. had held that on a proof for judgment debt the court would go behind the judgment and ascertain whether there is a provable debt, but this rule would not apply to a proof for assessed taxes. This English case was also followed in Dinshaw & Co. v. Income-tax Officer, Lucknow. Similar view was held by a bench of this court in Janda Rubber Works Ltd. v. Income-tax Officer, Salaries Section. In the last mentioned case there was also a reference to the case of Governor-General in Council v. Sargodha Trading Co. Ltd., where a full bench of the Lahore High Court had expressed the view that the English case in In re Calvert was not a good authority to be followed by courts in India. The division bench of this court did not express agreement with the view of the full bench of Lahore. It was held that when a procedure had been prescribed by the statute and a special Tribunal appointed under the Income-tax Act, the question as to the rights, which were the creation of that Act, had to be determined by such Tribunal and the jurisdiction of this court was impliedly debarred. Reliance was also placed upon a decision of the Privy Council in Raleigh Investment Co. v. Governor-General in Council. The division bench held that if the assessment is determined by the Income-tax Officer, the jurisdiction of the civil court to entertain a suit, and of any other court to entertain any other proceedings, is excluded; and that a proper machinery having been provided under the Income-tax Act the legality or illegality of the assessment is to be determined by setting in motion the machinery provided by that Act and not through any other Tribunal. The dicta in In re Calvert was cited with approval. The contention of the petitioner must, therefore, prevail so far as the penalty orders which had been passed prior to the companys going into liquidation is concerned.
With regard to the penalty order of Rs. 4,000 passed on 14th April, 1956, the stand taken by the petitioner is not justified. The company went into liquidation on 13th January, 1956. When passing the penalty order, no notice was given to the official liquidator. Section 171 of the Indian Companies Act, 1913, provides that when a winding up order has been made no suit or other legal proceedings shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose. The language of this section is wide enough to include proceedings under the Income-tax Act. No leave of the court has been obtained. In view of this, the claim of the petitioner for Rs. 4,000 on account of the penalty order passed on 14th April, 1956, cannot be entertained.
In the result, the petitioner is entitled to succeed so far as its claim up to Rs. 12,500 is concerned. The official liquidator is, therefore, directed to admit the petitioners claim to the extent of Rs. 12,500 in consequence of the penalty orders referred to above. This will be in addition to the claim already admitted by the official liquidator. The petitioner will be deemed to be an ordinary creditor with respect to the amount of Rs. 12,500. To the extent to which the official liquidator has already admitted the petitioners claim his action is confirmed.