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TMI Blog2024 (11) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... ffar Iqbal, Adv. & Mr.Rohan Chatter , Adv For the Respondent : Mr.Sandeep Pathak, Adv. with Ms.Jaya P. Pathak , Adv ORDER AVNEESH JHINGAN, J[ORAL]:- 1. These writ petitions are decided by this order as the facts and issue involved are similar. The facts are being taken from D.B. Civil Writ Petition No.18092-/2017. 2. The issue involved is:- whether recovery of the outstanding dues under the Income Tax Act, 1961 (for short 'the Act') of Public Limited Company can be recovered from the Director by invoking Section 179 of the Act. 3. The relevant facts are that the petitioner was a Non- Executive Director of M/s. Pinky Auto Finance Limited later known as M/s. Golden Future Capital Limited (hereafter 'the Company'). For Assessment Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-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. Explanation.-For the purposes of this section, the expression "tax due" includes penalty, interest 77-78[, fees] or any other sum payable under the Act." 7. Section 179 of the Act empowers the Income Tax Authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited company by virtue of Section 43-A of the Companies Act w.e.f. 1st October, 1975. As already mentioned, the arrears sought to be recovered from the appellants relate to the assessment years 1977-78 to 1982-83. Obviously, the Company being a public limited company, proceedings against the directors for recovery of the tax due from the company cannot be taken, and certainly not proceeded with, under Sec 179 of the Income Tax Act, 1961. We need hardly say Article 265 of the Constitution clearly prohibits any attempt to recover taxes except under the authority of law. It is, therefore, clear that further proceedings against the appellants for recovery of the tax due from the company have to be stayed." The Gujarat High Court in Radhey Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, when would not lie, the petition, therefore, deserves to be succeeded." The Madras High Court in R.Rajagopalan Vs. Deputy Commissioner of Income Tax reported in [(2021)18 ITROL 728] held that:- "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 aside as the same has been made against Directors of a Public Limited Company, when Section 179 of IT Act applies only to Private ..... X X X X Extracts X X X X X X X X Extracts X X X X
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