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Issues involved: Challenge to order under section 179 of the Income-tax Act, 1961 for recovery from a director of a private company.
Summary: The petitioner challenged an order made under section 179 of the Income-tax Act, 1961, directing recovery from the petitioner as a director of a private company for outstanding tax amounts. The order was challenged on the grounds that it did not establish the necessary precondition for invoking section 179, which requires that recovery from a private company cannot be made before holding a director liable. The petitioner argued that the company owned assets of substantial value that could cover the tax liabilities. The court found that the Revenue authorities were attempting to recover the tax from the petitioner instead of the company's assets, which was not the intended role under section 179. The court held that section 179 can only be invoked if recovery from the company is not possible, which was not established in this case. The order was deemed ultra vires section 179 and quashed, ruling in favor of the petitioner.
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