TaxTMI 
TaxTMI 
2014 (3) TMI 391
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.... of 2004. The petitioner has challenged order dated 23rd December 2003 passed by the Income Tax Officer under Section 179 of the Incometax Act, 1961 {"Act" for short}, as confirmed by the Commissioner by an order dated 31st August 2004 passed in Revision petition filed by the petitioner. One Allons Pharmaceuticals Limited [hereinafter to be referred to as, "the Company"] was incorporated as a private limited company on 25th September 1991. This company was converted into a public limited company on 5th April 1995. The petitioner became a Director of the said company on 9th March 1996. The Income Tax Officer issued a notice dated 1st August 2002 intimating to the petitioner that there are arrears of the said company long over due. The Com....
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....is found that such dues from the company cannot be recovered. The first and foremost requirement of applicability of Section 179 of the Act is that the Director from whom such recovery is sought to be made is the Director of a private company. Since the petitioner joined company as a director only after it was converted into a public limited company, this requirement would not be satisfied. Learned counsel for the Revenue, however, raised two fold contentions. He firstly contended that the concept of private company or a public limited company cannot be adopted from the Companies Act and must be seen in light of the provisions contained in the Incometax Act, 1961 and in particular Section 179 thereof. He submitted that any company in whi....
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.... Officer to hold otherwise. In the present case, the show cause notice is bereft of any such details. It merely calls upon the petitioner to show cause why tax recovery, which could not be made from the company be not made from him under Section 179 (1) of the Act. We would therefore hold that even otherwise, in absence of any previous material indicating that the show cause notice and any bipartite hearing on such issues by the Income Tax Officer, such question need not be gone into. Even from the order under section 179, we do not find that the Assessing Officer had based his case of lifting the corporate veil, as was referred to by this Court in case of Pravinbhai M. Kheni [Supra] in which, we had observed as under : " 15. From the....
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....t hesitated in ignoring the corporate status and striking at the real beneficiaries of such complex design. 17. Section 179 of the Act itself is a statutory creation of piercing of corporate veil. Ordinarily, directors of a company even that of a private company would not be answerable for the tax dues of the company. Under subsection( 1) of section 179 of the Act, however, subject to satisfaction of certain conditions, the directors can be held jointly and severally liable to pay the dues of the company. 18.In the present case, however, the Revenue desired to apply the principle of lifting the corporate veil in case of a public company and seeking to resort to provisions contained in section 179 of the Act. In our view if the factors....