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TMI Blog1974 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ng section 179 cannot be applied - - - - - Dated:- 13-3-1974 - Judge(s) : DEB. JUDGMENT DEB J.-In this writ application, the petitioners have challenged the jurisdiction of the respondents to issue two notices both dated July 31, 1967, and to proceed against them under two notices both dated May 3, 1973, in the following circumstances: G. Dey Company (Contractors) Private Ltd., hereinafter stated as the company, is the assessee under the Income-tax Act. The company is liable to pay the assessed tax of Rs. 690.82 and Rs. 5,212'88, respectively' for the assessment years 1952-53 and 1953-54. The petitioner No. 1 was a director and the petitioner No. 2 was a shareholder of the company for the above period. They have sold their share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the said respondent could proceed against the petitioners under the impugned notices of February, 1973, served on the company. Mr. Ajit Kumar Sen Gupta, the learned counsel for the revenue authorities, have placed reliance on section 179 of the Income-tax Act, 1961, which is as follows : " Notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), when any private company is wound up after the commencement of this Act, and any tax assessed on the company, whether before or in the course of or after its liquidation, in respect of any income of any previous year cannot be recovered, then, every person who was a director of the private company at any time during the relevant previous year shall be jointly and severa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ian Income-tax Act for recovering the assessed taxes from the directors of a dissolved private limited company. Section 179 of the Indian Income-tax Act, in my opinion, does not relate to a private limited company whose name has been struck off the register under section 560 of the Act, because on striking out the name of the company its legal entity is perished whereas the life of a private limited company in liquidation continues for the purpose of its final winding up and for its ultimate dissolution. Further, the directors of a private limited company have no personal liability to pay the tax of the company under the Companies Act, 1956. But the non-obstante clause in section 179 of the Income-tax Act has made them personally liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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