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2013 (6) TMI 125 - HC - Income TaxLiability of directors of private company in liquidation - penalty levied against the company under section 271(1)(c) for outstanding demand of Rs. 2.47 lac for AY 1988-89 & Rs. 4.38 lac for AY 1989-90 - whether u/s 179 department has no authority to seek recovery against the director of company any dues of the said company arising out of the penalty order u/s 271 (1)(c) - Held that:- As decided in Maganbhai Hansrajbhai Patel v. Asstt. CIT [2012 (11) TMI 189 - GUJARAT HIGH COURT] language used in section 179(1) with that of section 156 i.e. Notice of demand, it emerges that in section 179, the term used is 'tax due' where as in section 156 which is a recovery provision refers to a notice of demand which would specify the sum payable. The sum payable may as provided in the section itself include tax, interest, penalty fine or any other sum which is payable in consequence of any order under the Act. Section 220 pertains to "when tax payable and when assessee deemed to be in default". Thus it would therefore, not be possible to stretch the language of section 179(1) to include interest and penalty also in the expression 'tax due' as decided in Ratanlall Murarka And Others Versus ITO [1980 (7) TMI 60 - KERALA HIGH COURT]. The director may be considered an assessee under section 2(7) of the Act which provides that assessee means a person by whom any tax or any other sum of money is payable under the Act. However, the same must be qua the tax of the company which was due and remained unpaid. By virtue of section 179(1) of the Act the director cannot be held liable for interest and penalty and thereupon be treated as an assessee under section 2(7) of the Act as a person by whom any tax or any other sum of money is payable under the Act. Against revenue.
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