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2022 (4) TMI 1407 - KERALA HIGH COURTLiability of directors in tax due from the company - Liability of directors of private company u/s 179 - Recovery proceedings - arrears of income tax were due from the Company recovery proceedings were initiated against the Directors of the Company - whether no tax is due from the Company, warranting any proceedings under Section 179 ? - HELD THAT:- By virtue of the order passed in appeal by the Appellate Tribunal, produced as Ext.P29, a total change of scenario has occurred. As rightly, contended by the learned Senior Counsel Sri.Joseph Markose, the proceedings under Section 179 of the Act can be initiated only when there is a tax due from the Company, in respect of any income of any previous year. As per Section 179 of the Act if tax is due from a private Company and the same cannot be recovered, then every person, who was a Director of the Company, at any during the relevant previous year, will be liable for payment of such tax. The very basis for issue of Ext.P10 was the existence of a tax liability against the Company. The said tax liability has been effaced completely by virtue of Ext.P29, and the same has been remanded for reconsideration. When the issue that was pending consideration before the Tribunal has been directed to be reconsidered, in the eyes of law after setting aside the order of assessment to the extent challenged before the Tribunal, there is no tax due from the Company. Consequently there cannot be any recovery of tax from any Director of the Company for any assessment year, relevant to the previous year. Therefore, in the view that, Ext.P10 has no legs to stand, in view of Ext.P29. 8. Accordingly, Ext.P10 shall stand set aside.
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