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2015 (2) TMI 857 - HC - Income TaxLifting of the corporate veil - Liability of directors - notice to concerned person - Held that:- The person concerned is required to be put to notice by formulation of the tentative ground as to why the concept of lifting of the corporate veil should not be invoked. The Director of the company may show justifiable ground to satisfy the authority that no case is made out for lifting of the corporate veil and thereafter, the competent officer may form an opinion whether to lift the corporate veil or not. But, in any case, as neither has happened in the present case, it can be said that the order passed based on the lifting of the corporate veil even if it is, would be in breach of the principles of natural justice and hence, cannot be sustained. Thus the impugned order dated 19.11.2013 at Exhibit 1 is quashed and set aside, but with the observations that it would be open to the respondent - competent officer to formulate the ground and thereafter, to give a notice for treating the company as private limited company by lifting of the corporate veil and thereafter, to take steps, if any, available in accordance with law under section 179 of the Act. At that stage, the petitioner may show cause by resisting the ground for contending that it is genuinely a public limited company and the corporate veil should not be lifted. - Decided partly in favour of assessee.
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