Unpaid dividends/undistributed assets paid into companies liquidation account - Companies Law - No. 1 (XXI‑16) of 1965,

CBR Circular : No. 1 (XXI ‑ 16) of 1965, dated 8 ‑ 1 ‑ 1965. Subject:- Unpaid dividends/undistributed assets paid into companies liquidation account The word contributory occurring in section 555(1) would include a fully paid shareholder. The term dividend referred to in the above section has not the same connotation as ordinary dividend understood in company law. However, money falling within the meaning of section 555(1)(b) would be dividend within the extended meaning contained in section 2(22)(c) of the Income‑tax Act, 1961, if the conditions mentioned in that sub‑section are satisfied. The Board are advised that before the liquidator, who is the principal officer of the company within the meaning of section 2(35) of the Income‑tax Act , 1961, pays into the liquidation account any money falling within the meaning of section 555(1)(b), he has to deduct tax from such moneys and pay the same to the credit of the Central Government as required by sections 194 and 200 of the Income‑tax Act, 1961. On his failure to do so, section 201 of that Act may be invoked against him.