2022 (9) TMI 1325

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....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 Chandan Credits Ltd. on the ground that the aforesaid company was....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....his 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 for recovery of tax due from the company itself. 6. Having heard learned co....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....how 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-mature. The action in the present case has, admittedly, been taken only after measures have been effected as against the company that have been....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ntained 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 in relation to the affairs of the company. ....... 12. Thus the only condition set out under Section 179 is to the effect that attempts should be made by the Income Tax ....