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1996 (3) TMI 397 - SC - Income TaxWhether the legal effect of section 178 of the Income-tax Act is that the ITO is entitled to the payment of the tax demanded otherwise than as provided in the Companies Act? Held that:- Appeal dismissed. The decisions of the Mysore, Calcutta, Rajasthan, Gujarat and Delhi High Courts have failed to give due importance to the legislative history and background that led to the enactment of the section and the crucial words occurring in sections 178(3) and 178(4) to the effect that the Official Liquidator 'shall set aside' the amount notified by the ITO and if it is not so done, the Official Liquidator is personally liable to pay the amount of tax which the company would be liable to pay. It should be remembered that section 178 occurs in Chapter XV of the Act. The object sought to be achieved by the provisions in the said Chapter is "to fasten liability to pay the tax" on the income received and to catch the income at the earliest point of time and tax the same where it is found, instead of waiting for long. We, therefore, hold that the judgment under appeal does not merit interference by this Court.
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