TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 612
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....ys in filing the appeal. We have perused the affidavit filed in support of the application and we find that sufficient cause has been shown for not being able to prefer the appeal within the period of limitation. The delay in filing the appeal is condoned. Accordingly, the application for condonation of delay is allowed. APOT/171/2022 This intra-court appeal by the writ petitioner is directed against the order dated April 21, 2022 in WPO 213 of 2013. The appellant, an erstwhile director of M/s. Basant Udyog Pvt. Ltd., has filed the writ petition challenging garnishee notice issued by the respondent department under Section 179 of the Income Tax Act, 1961 (the Act) stating that there is a outstanding tax demand payable by the company for t....
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.... in the year 1997 went into liquidation and the dispute as to whether a claim was lodged before the Official Liquidator was not gone into, but yet the learned Writ Court was of the opinion that the proceedings initiated pursuant to the garnishee notice cannot be stalled. Accordingly, the writ petition stood dismissed.. Aggrieved by such order the appellant is before us by way of this appeal. We have heard Ms. Smita Das Dey, learned standing Counsel for the appellant and Mr. Abhratosh Majumder, learned Senior Advocate duly assisted by Mr. Avra Mazumder, learned Advocate for the respondent. The legal issue which arises for consideration in the instant appeal is as to in what manner the power under Section 179 of the Act could be invoked. ....
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....s "cannot be recovered" are most important. The phraseology suggests essentially that in spite of the efforts made as per the procedure followed in the Income-tax Act for recovery of the tax arrears when the said tax arrears cannot be recovered then alone the liability can be transferred under section 179(1) of the Income-tax Act to the directors. Therefore, in order to activate this section and the action thereunder, a finding would have to be recorded to the effect that in spite of the efforts to recover the tax arrears the said tax arrears could not be recovered from the assessee company. The second part of the section comes into effect only thereafter. Firstly, once there is a finding that such tax arrears cannot be recovered then the l....
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.... 1961 in detail. It has been held therein that sub-section (1) of section 179 of the Act, 1961 provides for the joint and several liability of the directors of a private company, wherein the tax dues from such company in respect of any income of any previous year cannot be recovered. The first requirement, therefore, to attract such liability of the director of a private limited company is that the tax cannot be recovered from the company itself. Such requirement is held to be a pre-requisite and necessary condition to the fulfilled before action under section 179 of the Act can be taken. In the context of section 179 of the Act, 1961, this Court held that before recovery in respect of the dues from a private company can be initiated agains....
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....hee notice on the appellant who is no more the director of the company eversince 1990. After the company had gone into liquidation, the department could have lodged a claim before the Official Liquidator. However, there is nothing on record to show that such a claim was made by the department before the Official Liquidator. This aspect is very crucial aspect which the learned Writ Court ought to have considered and the same cannot be brushed aside and a direction could not have been issued without reference to the said fact. The learned standing Counsel for the respondent placed reliance on a decision in the case of Hardip Singh & Anr. Vs. The Income Tax Officer, Amritsar & Ors., AIR 1979 SC 1453. Firstly, the said decision arose out of a....