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TMI Blog2018 (9) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... king to recover the unpaid tax dues of the company from the petitioner in terms of section 179 of the Income Tax Act, 1961. 3. Record suggests that for the assessment year 2010-11, the Assessing Officer passed an order of assessment in case of the said company on 15.12.2017. This order resulted into demand of unpaid tax of Rs. 17.06 lacs (rounded off). Since the company did not pay the same, the Assessing Officer desired to invoke section 179 of the Act for which purpose, he issued notice on 07.02.2018. In the said notice, he stated thus: "2. In this regard, it is to state that total demand of Rs. 17,06,460/- as per the I.T. Act is outstanding in the case of M/s. Brijvashi Caterers Pvt. Ltd. This office has sent several letter at G-10, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her part, there is no negligence, misfeasance or breach of duty as a director which led to revenue defalcation. 6. The Assessing Officer ignored such pleas and passed the impugned order on 28.02.2018 asking her to pay up dues of the company. Much of this order is devoted to the question whether powers under section 179 of the Act can be invoked even against the director of the public company. All that with respect to the present petitioner he had to state was, the petitioner was a director of the company during the relevant period and for such period, the tax dues of the company could not be recovered from the company. He therefore concluded as under: "It can thus be seen that the primary reason for failure to collect the demand is on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt facts. Nevertheless, it would be the onus of the Assessing Officer to draw the primary facts to the notice of the assessee on the basis of which, he proposes to invoke powers under section 179 of the Act. Essentially, this statutory provision provides for lifting of corporate veil and enable the Revenue to recover the unpaid tax dues of a private company from its directors, provided the requirements referred to in sub-section (1) of section 179 of the Act are satisfied. In case of Pravinbhai M. Kheni vs. Assistant Commissioner of Income Tax and ors reported in 353 ITR 585 in the context of the said provision, the Division Bench had observed as under: "7. Sub-section(1) of section 179 as can be noticed provides that notwithstanding anyt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not possible to accept the stand of the respondent that despite best efforts the taxes due from the Company cannot be recovered. As laid down by this Court the phrase "cannot be recovered" requires the Revenue to establish that such recovery cannot be made against the Company and then and then alone would it be permissible for the Revenue to initiate action against the director or directors responsible for conducting the affairs of the Company during the relevant accounting period. Hence, the prerequisite condition stipulated by Section 179 of the Act remains unfulfilled in context of the facts available on record by virtue of the impugned order as well as the affidavit-in reply." 8. Reverting back to the facts of the case, we notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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