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TMI Blog2014 (3) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 20002001, the Assessing Officer passed order of assessment on 28.3.2003, raising tax demand of Rs.40,99,967/. With penalty, it came to Rs.41,09,967/. Five more separate orders of assessment dated 27.2.2004 were also passed in case of the same company for the assessment year 19961997 to 19992000 and 20012002 raising different tax demands. 2.2) On 22.3.2004, the Income Tax officer issued a notice to the petitioner indicating that a tax demand of the said company of Rs.41,11,967/for the assessment year 20002001 was still outstanding. He was the director of the company during the relevant period. He was asked to show cause why he should not be held personally liable for such recovery under section 179 of the said Act. 2.3) The petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "c) I am advised by my Chartered Accountant that this company falls in category of deemed Public Limited in view of its turnover being more than Rs.1 crores as estimated by the Department under section 144 of the IT Act, therefore section relating to personal liability of Director does not arise in this case if the assessment of income is correct by the department. This issue has been raised by me in my first submission itself. A copy of the said section 43A of the companies Act is attached herewith." 2.5) In his last reply dated 1.1.2005, he once again asserted that : "5. Further it has also brought to the notice of the learned ITO that u/s. 43A of the company's act states that where one of the share holder of the company is a body c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public company, the Assessing Officer observed as under : "Another argument raised by him is M/s. Sirs Engg. Pvt. Ltd. is a deemed public company under 43A of the Companies Act, 1956, in view of its turnover being more than Rs.1 crore as estimated by the department in the assessment order. The section 179 specifically overrides the provisions of the Companies Act, 1956. The section 179 deals with only private limited companies. Hence this contention is not tenable." 4. Having heard learned counsel for the parties and having perused the documents on record, following facts emerge : 1) Notice under section 179(1) of the Act was issued only for recovery of tax due pertaining to assessment year 20002001. 2) Without any further notice, the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order of Assessing Officer would be confined to the demands for the assessment years 20002001. In this context we are unable to hold that the petitioner having already resigned from the position of a director in the year 1996, could no longer be held responsible under section 179 of the Act. The undisputed facts which have come on record are that in the year 2003, the petitioner signed the returned of the company as its director. In the year 2004, the petitioner filed appeals against the orders of assessment passed by the Assessing Officer for the assessment years 19951996 and onwards. Thus, even if we believe that the petitioner had tendered his resignation as a director, he continued to act as one. Neither the company nor the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmunication from the Registrar of Companies but since the genuineness of this letter was doubted we issued notice to the Registrar of Companies, Kerala. An affidavit has now been filed on behalf of the Registrar. It clearly shows that the company had become a public limited company by virtue of Section 43A of the Companies Act w.e.f. 1st October, 1975. As already mentioned, the arrears sought to be recovered from the appellants relate to the assessment years 197778 to 198283. Obviously, the Company being a public limited company, proceedings against the directors for recovery of the tax due from the company cannot be taken, and certainly not proceeded with, under Sec 179 of the Income Tax Act, 1961. We need hardly say Article 265 of the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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