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TMI Blog2015 (4) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... from the impugned orders, nowhere respondent No.3 has referred to any of the proceedings initiated against the company to show that it is not possible to recover the tax due from the company. In the absence of such a finding, no liability could be fixed on the Directors under S. 179 of the Act to pay the tax due. Hence, the impugned orders and the consequent demand notices are liable to be set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel appearing for the petitioners and Sri K.V. Aravind, learned Standing Counsel appearing for the respondents and perused the impugned orders. 3. The sole contention urged by the learned Senior Counsel is that the impugned orders are contrary to S.179 of the Income Tax Act, 1961 ('the Act') inasmuch as no finding is recorded by respondent No.3 that the tax due cannot be recovered fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. (2) Where a private company is converted into a public company and the tax assessed in respect of any income of any previous year during which such company was a private company cannot be recovered, then, nothing contained in sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of such a finding, no liability could be fixed on the Directors under S. 179 of the Act to pay the tax due. Hence, the impugned orders and the consequent demand notices are liable to be set aside and are accordingly set aside. The matter is remitted to respondent No.3 for reconsideration in accordance with law after affording an opportunity of hearing to the petitioners. All contentions of both ..... X X X X Extracts X X X X X X X X Extracts X X X X
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