TaxTMI 
TaxTMI 
1975 (12) TMI 47
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....th the Registrar of Companies on July 19, 1949. The registered office of the company was in Pamur, Kanigiri taluk, Prakasam district. The company went into voluntary liquidation by a special resolution passed by the members of the company on September 9, 1963. One Sri V. Sankara Narayana Rao of Pamur was appointed as voluntary liquidator of the company. The final meeting of the members under section 497 of the Companies Act had taken place on December 6, 1967, and the return of final winding-up by the voluntary liquidator was filed with the official liquidator on December 14, 1967. The voluntary liquidator furnished all the records available with him to the official liquidator for investigation under section 497(6) of the Companies Act. The official liquidator is in charge of the scrutiny of the accounts and books of the company which is in voluntary liquidation. The voluntary liquidator died in January, 1974. Subsequent to the death of the voluntary liquidator, no other liquidator has been appointed by the company. The official liquidator, after completion of the scrutiny of the accounts and books of the company, has to submit his report under section 497(6) of the Companies Act t....
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....al. The income-tax department's standing counsel, Sri P. Rama Rao, contended that the respondent-official liquidator is certainly the principal officer of the company within the meaning of section 2(35) of the Income-tax Act as he is a person connected with the management or administration of the company at the time of the issuance of the notice under section 148 of the Income-tax Act. This claim of the appellant is resisted by Sri R. V. Medhi, the present official liquidator, who has been appointed on August 4, 1975, contending, inter alia, that while discharging the functions and duties under section 497(6) of the Companies Act, he is not managing or administering the affairs of the company and he cannot be called an officer, much less the principal officer of the company, and, in any event, there are neither funds to the credit of the company nor any realisable assets and he is, therefore, not liable to submit a return of income in respect of the company in voluntary liquidation. The answer to the question turns upon the provisions of section 2(35) of the Income-tax Act, 1961, which defines " principal officer ", read with section 497(6) of the Companies Act, 1956. Section....
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....er of the company in liquidation. The only point that survives for our determination is whether the respondent is or is not connected with the management or administration of the company. Sub-clause (b) of clause (35) of section 2 is wide enough to take in any person connected with the management or administration of the company. The words " management " and " administration " are not defined anywhere in the Income-tax Act or the Companies Act. The ordinary dictionary meanings of those words may be noticed. " Manage " means is conduct (undertaking, etc.) ; control (household, institution, state) ; take charge of (cattle, etc.) ". " Administration " means " the action of administering or serving in any office ; attendance ; performance of duty ". The words " management " and " administration " are of broad import. It is pertinent to notice that the expression used is " any person connected with the management or administration of the company " but not " a person in management or administration of the company ". There is a lot of difference between the two expressions. What the law makers intended is some kind of connection or nexus of the person to be called the principal officer....
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....pany in the discharge of his official duties under this provision. In case the official liquidator finds in his report that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest, the company shall be deemed to be dissolved from the date of the submission of such report. Until then, the company must be deemed to be in existence in the eye of law. In case the official liquidator reports that the affairs of the company have been conducted in a manner prejudicial to the interests of its members or to public interest, the court shall, by order, direct him to make a further investigation of the affairs investing him with all such powers as the court may deem fit. The liquidator appointed by the company in the case of a voluntary liquidation or by the court becomes functus officio on the dissolution of the company. In other words, he cannot exercise any power after the dissolution of the company but, however, holds himself liable for his acts and omissions in his capacity as liquidator before the dissolution of the company. Section 497(1) and (2) of the Companies Act enjoins upon the liquidator to call for a gen....