TaxTMI 
TaxTMI 
2022 (12) TMI 888
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.... petitioners and notice of demand dated 11.01.2018 under section 222 of the Act as a consequence of order dated 26.10.2017. 3.Brief facts of the case are that the petitioners were appointed as the Directors of M/s. Nakoda Syn-tex Private Limited. 3.1) Respondent no.1 carried out assessment under section 143(3) of the Act against the said company for the Assessment Year 2014-2015 and passed the assessment order dated 23.12.2016 making addition of Rs. 7,00,00,000/- on account of bogus unsecured loans. Consequently demand notice dated 23.12.2016 under section 156 of the Act was issued upon the said company raising a demand of Rs.3,06,63,860/-. 3.2) Being aggrieved by the said assessment order and demand notice, the said company preferred an appeal before the Commissioner of Income Tax Appeal-1, Surat on 17.01.2017. 3.3) On 9.02.2017, respondent no.1 issued a recovery notice demanding payment of the outstanding dues from the said company. 3.4) Pursuant to such recovery notice, the said company filed a stay application on 22.02.2017 before the respondent no.1 appraising about the appeal filed by the said company. 3.5) It is the case of the petitioner that respondent no.1 rejected ....
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.... taken any assertive steps for the purpose of recovering the outstanding tax dues from the private limited company. In support of his submissions, reliance was placed on the following decisions: 1) In case of Bhagwandas J. Patel v. Deputy Commissioner of Income-tax reported in (1999) 238 ITR 127 (Gujarat). 2) In case of Indubhai T. Vasa v. Income Tax Officer, Ward 4(3) reported in (2006) 282 ITR 120( Gujarat). 3) In case of Amit Suresh Bhatnagar v. Income-tax officer reported in (2009) 308 ITR 113 (Gujarat). 4) In case of Mehul Jadavji Shah v. Deputy Commissioner of Income Tax reported in (2018) 403 ITR 201 (Bombay). 5) In case of Sadhna Ramchandra Jeswani v. Income Tax Officer (judgment dated 27.08.2019 in Special Civil Application No.5354/2018 and allied matter). 6) In case of Susan Chacko Perumal v. Assistant Commissioner of Income-tax reported in (2017) 399 ITR 74 (Gujarat). 7) In case of Gul Gopaldas Daryani v. Income Tax Officer reported in (2014) 367 ITR 558 (Gujarat). 6.On the other hand, learned advocate Mr. Nikunt Raval for the respondents submitted that the compliance of the provisions of section 179 of the Act are made prior to passing of the impugned ord....
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...., it is apparent that recovery of income-tax demand couldn't be made from the assessee company. Therefore the department resorted to the provision of section 179 of the income-tax act and initiated proceeding to recover demand from director. Therefore it is evident that in this case sufficient efforts were made to recover the outstanding demand from the assessee company, before passing order u/s 179 of the IT Act). xxx 14. However in the instant case it is seen that show-cause notice u/s.179 of the income-tax act was issued on 06/07/2017 and as per the terms of the notice the directors were required to submit their reply on or before 13/07/2017 but it is seen that there was no response from them till the date mentioned above. Later on after laps of 45 days of the due date, reply was filed. In their reply they did not submit any evidence to prove that non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on their part in relations to the affairs of the company. It was merely submitted that they were vigilant in tax matters and appeal before Ld. CIT (A) was pending. It is important to mention here that it is necessary to pay 20% of the demand o....
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....ment of Delhi High Court in case of Rajeev Behl v. Principal Commissioner of Income-tax reported in (2021) 132 taxmann.com 283 (Delhi). 6.4) It was further submitted that reliance placed by the petitioners on the various decisions of this Court are not applicable in the facts of the said case as it is for the petitioners to point out that the petitioners have not remained negligent for non recovery of the outstanding dues of the private limited company. 7.Having heard the learned advocates for the respective parties, it appears that the respondent authorities have failed to take any action for recovery of the outstanding dues except issuing notice for recovery and attaching the bank account of private limited company. Section 179(1) of the Act reads as under : "Liability of directors of private company 44[***]. 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 ....