2002 (4) TMI 11

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....ourt does not interfere with the show cause. But the element of interference is available hereunder. The petitioner (in each writ petition) contended that he was a non-executive director of respondent No. 4-company inducted in the capacity of a chartered accountant. They were never involved in administering the day-today business of the respondent-company. In early 1993, the board of directors was reconstituted in view of the change of management of the company. The petitioners resigned from the directorship. At the time of resignation, the fiscal position of the respondent-company was quite strong and healthy. Prior to the resignation income-tax return was duly filed by the company and tax dues were paid. The return was duly processed und....

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....erson who was a director of the private company at any time during the relevant previous year of assessment shall be jointly and severally liable for the payment of tax found due against the company for the previous year. He further cited a decision in M. R. Sundararaman v. CIT [1995] 215 ITR 9 (Mad), where under a single Bench of the Madras High Court also held that directors shall be jointly and severally liable for payment of tax. He also cited a judgment in Roop Chandra Sharma v. Deputy CIT [1998] 229 ITR 570 (All) to reiterate his submission by showing the relevant portion of such judgment where even it has been held that the liability is co-extensive with the company and a director is liable only in respect of the arrears of tax of ....

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....to initiate the proceeding under section 179 of the Act is without jurisdiction and without authority of law because there is no finding by the Assessing Officer of the Income-tax that the amount cannot be recovered from the company. Even in the judgment of the Punjab and Haryana High Court Darshan Kumar [1996] 222 ITR 608 it has been held by the Division Bench that a director cannot escape his liability to pay the arrears after the competent authority found that it is impossible to recover the amount from the company. I have made a conjoint reading of the Division Bench judgments of different High Courts. One aspect is very categorical in all the judgments irrespective of any result that a proceeding can be initiated as against the directo....