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TMI Blog2021 (10) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the hands of Directors qua Public Limited Company. In the light of the language in which Section 179 of IT Act is couched, it follows as a indisputable sequitur that impugned proceedings are barred and they are liable to be set aside as the same has been made against Directors of a Public Limited Company, when Section 179 of IT Act applies only to Private Limited Companies and there is no other provision qua Public Limited Companies akin to Section 179 of IT Act. Section 179(1) of IT Act not being applicable to Public Limited Companies. There is a compromise decree in a suit filed against said Company by third parties and in this compromise decree, Income Tax Department is a party and it has been paid out certain sums of money - A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2021. To be noted, next listing shall be peremptory. 2. To be noted, there were earlier listings before Hon'ble Predecessor Judges, but owing to the trajectory the matter has taken today, it is not necessary to advert to the same. 3. However, adverting to earlier proceedings made by me on 02.09.2021, Ms.Hema Muralikrishnan, learned Senior Standing counsel (Revenue counsel) for all the respondents in both the writ petitions, submits that though time for filing a counter affidavit has been sought, it is now not necessary to file counter affidavit as she has since got further instructions that written instructions from the Department would suffice and she will make submissions on the basis of the same. Therefore, with the consent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds raised in the writ affidavit, learned counsel for writ petitioner restricts his submissions to two points and they are as follows: a) Impugned notices are bad as said Company is a Public Limited Company and Section 179(1) of IT Act is applicable only to Private Limited Companies; b) There is a compromise decree in a suit in C.S.No.1045 of 2008 filed against said Company by third parties and in this compromise decree, Income Tax Department is a party and it has been paid out certain sums of money. 8. In response to the above, learned Revenue counsel, who has made it clear that it is not necessary to file a counter affidavit and will make submissions on the basis of written instructions (as alluded to supra) made submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h company was a private company cannot be recovered, then, nothing contained in sub-section (1) shall apply to any person who was a director of such private company in relation to any tax due in respect of any income of such private company assessable for any assessment year commencing before the 1st day of April, 1962.]' 12. This Court is informed without any disputation or disagreement that there is no other provision under IT Act akin to Section 179 of IT Act i.e., recovery tax arrears due to Company in the hands of Directors qua Public Limited Company. In the light of the language in which Section 179 of IT Act is couched, it follows as a indisputable sequitur that impugned proceedings are barred and they are liable to be set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cree and the decree also does not articulate anything directly in this regard. Therefore, second point urged by learned counsel for writ petitioner becomes a non-starter and that by itself draws the curtains on the second point. 15. However, writ petitioner succeeds on the first point i.e., Section 179(1) of IT Act not being applicable to Public Limited Companies. 16. Before concluding, I deem it appropriate to make it clear that this order will neither impede nor serve as an impetus if there is any other mode for the Revenue to recover tax arrears. Likewise, if there is any mode to recover tax arrears qua a Public Limited Company in the hands of Directors if the Revenue chooses to initiate any such proceedings, it will be open to wri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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