Pradeep Kothari Vs Official Liquidator (Madras High Court)
The Madras High Court considered an application seeking permission to appoint an Advocate specialising in income tax matters to examine the books of accounts, financial records and other available documents of a company in liquidation. The proposed Advocate was also to facilitate a settlement with the Income Tax Department and submit a detailed report to the Court after completing the examination, verification, coordination and settlement process.
The applicant submitted that a report filed by the Official Liquidator in September 2025 had recorded a claim of Rs.6,29,73,549 by the Income Tax Department. According to the applicant, verification showed that the assessment also covered a period subsequent to the order of liquidation and the appointment of the Official Liquidator. It was therefore submitted that the matter required engagement with the Income Tax Department and that appointing an Advocate with expertise in income tax practice would be in the beneficial interest of the company in liquidation.
The applicant further stated that the expenses for engaging the Advocate could be borne by the applicant. The Madras High Court heard both sides and noted the specific statement made by the applicant’s counsel, as reflected in the affidavit filed in support of the application.
Finding no impediment to allowing the application, the Court ordered the application accordingly. The Court imposed the condition that the remuneration of the Advocate would be borne by the applicant. The application was thus allowed, with no order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The present application had been taken out, seeking permission to appoint an Advocate, specializing in income tax matters to examine the books of accounts, financial records, and all available documents of the Company in Liquidation and facilitate a settlement with the IT Department and to submit a detailed report to this Hon’ble Court upon completion of such examination, verification, coordination and facilitation of settlement.
2. Heard both sides.
3. It is the claim of the applicant that, in a report filed by the Official Liquidator as early as in the month of September 2025, a claim by the Income Tax Department to the tune of Rs.6,29,73,549/- (Rupees Six Crore Twenty Nine Lakhs Seventy Three Thousand Five Hundred and Forty Nine only) had been shown to have been made, and that, on verification, it had been found that the assessment also includes the period after the order of liquidation had been passed and the Official Liquidator had been appointed. Hence, the matter had to be taken up with the Income Tax Department, and for that purpose, if an advocate with expertise in income tax practice is appointed, it would be in the beneficial interest of the company in liquidation.
4. He would further submit that the applicant could also bear the expenses towards the engagement of the said advocate. In view of the specific statement made by the learned counsel for the applicant, as reflected in the affidavit filed in support of the application, this Court has no impediment in ordering this application.
5. Accordingly, the application is ordered, subject to the condition that the expenses towards the remuneration of the Advocate shall be borne by the applicant. No costs.
