Official Liquidator of Kirloskar Investments and Finance Limited (in Liqn.) V. Chief Commissioner of Income Tax, Bangalore

CA/1433/2014

AI Insights

This case involves the Official Liquidator of M/s Kirloskar Investment and Finance Ltd., which was ordered to be wound up by the High Court of Karnataka. The Official Liquidator sought the court's intervention to recall attachment notices issued by the Chief Commissioner of Income Tax, Bangalore, which hindered the sale of immovable properties belonging to the company in liquidation. The properties were essential to realize proceeds to pay off creditors. The court heard arguments from both parties and decided to allow the recall of the attachment, emphasizing the need for court approval before any disbursement of the sale proceeds.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 793913 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 18-03-2016
• Assessment Year: misc
• Laws Referred To: Companies Act, 1956, Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: K S MAHADEVAN; V JAYARAM
• Keywords: Company in liquidation; Immovable properties; Income Tax; Official liquidator; Attachment Notices
• Section: 48; 6; 9; 446; 457(1)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF MARCH, 2016 BEFORE THE HON’BLE MR.JUSTICE ARAVIND KUMAR C.A.NO.1433/2014 In CO.P.NO.2/2000 BETWEEN: OFFICIAL LIQUIDATOR OF M/S KIRLOSKAR INVESTMENTS AND FINANCE LIMITED (IN LIQN.) ATTACHED TO HIGH COURT OF KARNATAKA, “CORPORATE BHAVAN” NO.26-27, 12TH FLOOR RAHEJA TOWERS, MG ROAD BANGALORE-560001. ...APPLICANT (BY SRI.K.S.MAHADEVAN AND SRI.V.JAYARAM, ADVS. FOR OL) AND: CHIEF COMMISSIONER OF INCOME TAX, BANGALORE. ..RESPONDENT (BY SRI. K.V. ARAVIND, ADVOCATE) THIS C.A IS FILED UNDER SECTION 446 OF THE COMPANIES ACT, 1956 R/W RULES 6 & 9 OF COMPANIES (COURT) RULES 1959 PRAYING TO DIRECT THE JURISDICTIONAL INCOME TAX AUTHORITIES I.E., THE CHIEF COMMISSIONER OF INCOME TAX, BANGALORE TO 2 RECALL ALL THE ATTACHMENT NOTICES ISSUED UNDER RULE 48 OF THE II SCHEDULE OF THE INCOME TAX ACT, 1961 WITH RESPECT TO ALL THE IMMOVABLE PROPERTIES BELONGING TO THE COMPANY IN LIQUIDATION AND NOT TO PROCEED WITH SALE. THIS C.A COMING FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R Heard Sri.K.S.Mahadevan, learned counsel appearing for the Official Liquidator and Sri.K.V.Aravind, learned panel counsel appearing for the Chief Commissioner – Income Tax. 2. This application is filed seeking for recall of the attachment notices issued by jurisdictional Income Tax Officer i.e., Chief Commissioner, Income Tax, under Rule 48 of II Schedule of the Income Tax Act, 1961 in respect of immovable properties of company in liquidation contending interalia that on account of properties having been attached the Official Liquidator has been unable to sell the same and pay the creditors. 3. M/s.Kirloskar Investment and Finance Ltd., was ordered to be wound up by this Court by order dated 3 24.12.2010 in COP No.2/2000. Pursuant to same Official Liquidator was appointed and he has been in custody and control of all the properties, effects and actionable claims to which company (in liquidation) is entitled. Under Section 457(1) of the Companies Act the Official Liquidator is empowered to sell the properties of the company in liquidation with the sanction of the company Court. It is stated that there are following properties of the company (in liquidation): Sl. No. Place Address of the Property 1 Bangalore Flat Nos.B-3, B-5, B-6, F-2, G-3, H-3, H-5, H-6 and H-7 situated at Brindavan Apartments, Hosur Main Road, Bangalore. Karuna Complex, No.337, 11th Main Road (Sampige Road), 11th Cross, Malleswaram, Bangalore. 2 Belgaum Office spacs 3 & 4, CTS No.155/B, Budhwarpeth, Tilakwadi, Belgaum – 590 006 Office space CTS No.116/1A, 117/1A & 1313/1A, No.22, Radio Complex, Shivaji Road, Belgaum. 4 3 Hubli Office space CTS No.122/43, Ward -3, Pooja Orcade, 1st Floor, Opp. SavaiGandharva Hall, Deshpande Nagar, Hubli-580 029. 4 Kolhapur C.S.No.1887/B/F/1, 1st Floor, Chavan Chamber (Ward-E), Rajrampuri, Kolhapur. 5 Margao Chaltha No.130, 257 to 266, F-101, 1st Floor, Rijim Classic, Martyr’s Dais Road, Malbhat, Margao, Goa-493 601. 6 Mumbai Office Space Unit NO.1004, 10th Floor, Raheja Centre, Plot N.214, Block-3, Backbay Reclamation, Nariman Point, Mumbai – 400021. 7 Nagpur Office Space 902, B Wing, Lokmat Bhavan, Wardha Road, Nagpur – 451 405. 8 Pune 3rd, 4th & 5th Floors, Saraswathi Complex, 1006, Shukrawarpeth, Near Maratha Chamber of Commerce, Pune- 411 002. Flat No.D-13 & Flat No.D-14, 3rd Floor, Building No.D/1, Shweta Co-op. Hsg. Soc. Singhad Road, Pune – 411 030. 9 Vadodara Office Space 206/A, Sarjan, Dandia Bazaar, Pratap Road, Vadodara-390 001. 5 3. In respect of above said properties the respondent has issued notices of attachment as per Annexure-A. On account of said attachment the Official Liquidator pleads his inability to implement or execute the sale of properties to realize the proceeds payable to the creditors. 4. Learned panel counsel - Sri.K.V.Aravind appearing for respondent would submit on instructions from the respondent / Department that Official Liquidator may be permitted to sell the properties in question and Department would have no objection for raising the attachment subject to the amounts realised on such sale being disbursed only with the leave of the Court. His submission is placed on record and the application stands allowed. The order of attachment in respect of the properties referred to hereinabove of the Chief Commissioner of the Income Tax, Bangalore stands recalled and it is made clear that the Official Liquidator would be at liberty take steps to sell the immovable 6 properties belonging to the company in liquidation in accordance with Section 457(1) by filing appropriate report or application before this Court. It is also made clear that without leave of the Court the Official Liquidator would not be entitled to make any payment or disbursement. It is also made clear that the respondent - Chief Commissioner of Income Tax, Bangalore would be at liberty to make appropriate application for payments of the sale proceeds after sale takes place and in the event of such an application is filed the Official Liquidator would be at liberty to consider the same on merits and in accordance with law. SD/- JUDGE DR "