TaxTMI 
TaxTMI 
2022 (9) TMI 1325
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....n terms of Section 179 of the Income Tax Act, 1961 (in short 'Act'). 2. A brief history of the matter is set out below, as relevant to decide this writ petition: (i) The Company is stated to be part of a group of companies, trading in steel and engaging in the acquisition of shares of other companies for the purposes of holding as investment. (ii) A search under Section 132 was carried out on 26.09.2012 in the premises of a group company, SBQ Steels Ltd. consequent upon which the assessments of the company were reopened under Section 147 of the Act. (iii) Additions were made in the hands of the company, two substantive additions being a) a sum of Rs.3.60 Crores that were received as share application from one C....
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....without pursuing the demand as against the Directors. The petitioners, in this regard, rely on the decision of the Gujarat High Court in the case of Ram Prakash Singeshwar Rungta V. Income-tax Officer (59 taxmann.com 174). 5. Learned Standing Counsel appearing for the Department would point out that sufficient measures were taken to recover the amounts from the company at the first instance, and it is only upon failure of those measures that the attention of the Department turned to the Directors to recover the amount in terms of Section 179. He denies the allegation that the conditions precedent under Section 179 have not been satisfied, by drawing attention to the narration in the counter relating to the attempts made by the Department....
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....etitioners on 23.07.2019. 7. No doubt, the above sequence of events and the attempts made by the respondents do not figure in either the show cause notices nor the impugned orders. However, there is no denial of the same by the petitioners before me and neither has a rejoinder been filed to the counter, despite counter dated 18.02.2020 having been served upon the petitioners as early as on 24.02.2020. Thus, the narration and the sequence of events set out in the counter are taken to be uncontroverted. 8. Thus, and in light of the fact that the records reveal clearly that reasonable attempts/measures have taken by the Department to recover the amount from the company, it cannot be said that the impugned action under Section 179 is pre-....
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.... (supra) takes them nowhere. 11. Section 179 of the Act reads as follows: Liability of directors of private company 179.(1) Notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), where any tax due from a private company in respect of any income of any previous year or from any other company in respect of any income of any previous year during which such other company was a private company cannot be recovered, then, every person who was a director of the private company at any time during the relevant previous year shall be jointly and severally liable for the payment of such tax unless he proves that the nonrecovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part ....