Income-tax claims in winding up are not conclusive; the liquidator may scrutinise and disallow unsupported assessments.

An income-tax assessment claim in winding up is not conclusive against the official liquidator merely because it rests on an assessment order. The debt must still be proved under insolvency principles applied through the Companies Act, and the liquidator may look behind an assessment or judgment where there was no real contest on merits or where its bona fides or correctness is in doubt. Where the assessment was based on estimated income without examination of the accounts, and the audited accounts showed no profit but a substantial loss, the claim was treated as not shown to be binding on the estate and was disallowed.

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Issues: Whether an income-tax assessment claim could be treated as a binding provable debt against the official liquidator in winding up, or whether the liquidator could require fresh proof and disallow the claim.

Analysis: The Court held that a debt in winding up is not immune from scrutiny merely because it is supported by an assessment order. Under the insolvency rules applied through the Companies Act, debts must be proved, and the liquidator may go behind a judgment or assessment where there has not been a real contest on merits or where the circumstances justify doubt as to its bona fides or correctness. The assessment here was made on an estimated income without examination of the accounts, and the audited accounts showed no profit but a substantial loss. In those circumstances, the claim was not shown to be validly binding on the estate.

Conclusion: The income-tax claim was not binding on the liquidator and was disallowed.

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