9911796707
TMI Blog1990 (11) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners in the original petitions were directors of one Rajmohan Cashews (P.) Limited, Quilon. There are four directors in the company. They are: (1) Smt N. Rajamoni Amma (petitioner in Original Petition No. 7470 of 1989), (2) Sri K. Janardhanan Pillai (petitioner in Original Petition No. 7471 of 1989), (3) Sri R. Gopinathan Nair and (4) Smt. R. Geetha Vasanth (wife of R. Gopinathan Nair). The petitioner in Original Petition No. 7470 of 1989 was a director in the said Rajmohan Cashews (P.) Limited from the very inception, that is from July 20, 1970 to February 14, 1981. Mr. K. Janardhanan Pillai (petitioner in Original Petition No. 7471 of 1989) and Mrs. Geetha Vasanth were directors till June 2, 1982. For the assessment years 1977-78 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent to rectify exhibit P-15 proceedings. The second respondent declined the request by exhibit P-19 order dated April 23, 1990. In the original petition, the prayer was to quash exhibit P-13 order passed by the first respondent, dated March 30, 1989, and exhibit P-15 and P-19 orders passed by the second respondent dated July 21, 1989 and April 23, 1990, respectively. The learned single judge, after adverting to the relevant facts, held that exhibits P-13, P-15 and P-19 proceedings are beyond challenge. The original petition was dismissed. The petitioner in the original petition has come up in Writ Appeal No. 612 of 1990. The said judgment was followed in Original Petition No. 7471 of 1989, from which the petitioner in the said origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 7470 of 1989 was a director from the date of incorporation July 20, 1970 to February 14, 1981. The petitioner in Original Petition No. 7471 of 1989 was a director till June 2, 1982, on which date he resigned. The arrears amounting to Rs. 56,04,640 are admittedly due from Rajmohan Cashews (P.) Limited for the years 1977-78 to 1982-83. The first respondent (Deputy Commissioner of Income-tax), after adverting to the pleas raised by the petitioner, stated in exhibit P-13 dated March 30, 1989, as follows : "It is well settled that tax is to be paid while earning. There are many provisions in the Act to facilitate this principle, for example, tax payable in advance, tax on self-assessment, etc. Thus the duty is cast upon the assessee to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed tax arrears due from the company for the years 1977-78 to 1982-83, that there was a belated appeal for the year 1982-83, that no serious attempt was made by the company to clear the arrears after October, 1986, that the plea that the company incurred loss from 1983-84 was not relevant in failing to pay the arrears of the earlier years, that the company was doing large business even subsequently in spite of loss, that the assessee-company was getting refunds under section 141A of the Act for the years 1978-79 to 1982-83, that there were pre-planned attempts to understate the total income and since there were large disallowances in the regular assessments, the company had to pay large amounts when regular assessments were made, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no valid explanation was offered by the assessee for not raising the claim before the Deputy Commissioner or before the Commissioner at the earlier stage and there is no rectifiable mistake apparent on the record. The motion for rectification of exhibit P-15 order failed. The order so passed is dated April 23, 1990 (exhibit P-19). We also perused the detailed counter-affidavit filed in this case and it has been extracted by the learned single judge in his judgment. Exhibit P-1, in pursuance of which the appellants claimed that the Rajmohan Cashews (P.) Limited is a public limited company, is even suspected to be a "fabricated document" and an afterthought. We also find that the learned judge has adverted to the order sheet that no such do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, that the assessee-company was getting refunds under section 141A of the Act from 1978-79 to 1982-83 and the events show that there was a pre-planned attempt to understate the total income and, in this view, exhibits P- 13 and P-15 are not open to any objection. We are satisfied that respondents Nos. 1 and 2 have, on a factual analysis, held that proceedings under section 179 of the Income-tax Act were justified and the appellants, as directors, should be held jointly and severally liable for the tax arrears during the time they were directors of the company, Rajmohan Cashews (P.) Limited. The above finding was arrived at by respondents Nos. 1 and 2 on the basis of innumerable materials, which have been adverted to in the orders passed. E ..... X X X X Extracts X X X X X X X X Extracts X X X X
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