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2003 (11) TMI 12 - HC - Income TaxInsolvency – Debts provable in insolvency - order of adjudication – date of adjudication - The official assignee took over the assets of the insolvents and auctioned the properties of the insolvents. The sale proceeds thereof came in the hands of the official assignee -admittedly the adjudication order was made on November 3, 1987, declaring respondents Nos. 1 to 4 as insolvents. The order of penalty has been imposed in the year 1995, i.e., much after the order of adjudication was made, and respondents Nos. 1 to 4 were adjudged as insolvents. The liability of penalty, thus, was incurred after the date of adjudication and cannot be said to be provable under section 46(3) of the Presidency Towns Insolvency Act. The legal position has been consistent in this regard that debt to be provable under insolvency must be arising out of obligation incurred before the order of adjudication or the insolvent must become subject before discharge
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