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2021 (3) TMI 1232 - HC - Income TaxViolation of Section 179 - Liability of directors of private company in Liquidation - HELD THAT:- The impugned orders have been passed under Section 179 of the Income Tax Act, 1961 which specifically applies to liability of directors of private companies. The definitions of private limited company and public limited company Section 3(i)(iii) and (iv) of the Companies Act, 1956 is clear. The definition of company has defined in Companies Act, 1956 has been incorporated in the Income Tax Act, 1961. The Companies Act, 1956 recognizes private limited company and public limited company. There are no evidence on records to conclude that the said assessee in default companies namely M/s.Gangotri Textiles Ltd and NEPC Agro Foods Ltd was a private limited company. There are no records to substantiate the said companies was a private limited company. Therefore, challenge to invocation of Section 179 of the Income Tax Act also appears to correct. Considering the fact that the records are not in produced either by the petitioner nor the respondent, it is of the view that the impugned orders is liable to be quashed. These cases are remitted back to the respondent to pass appropriate orders, after considering the definition of the 'Company' in Section 262(68) and (71) of the Companies Act, 2013 and ..deals of the Companies Act, 1956. The respondent may how issue a proper notice after examining the certificate of incorporation of the respective assessee in default and after examined the articles and Memorandum and Article of association of M/s.Gangotri Textiles Ltd and NEPC Agro Foods Ltd. If there are materials to suggest that the .company were a private limited company the respondent may pass appropriate order under Section 179 of the Income Tax Act. This exercise shall be carried out by the respondent within a period of three months from the date of receipt of a copy of this order. In case the records from the Registrar of Companies indicates that the assessee in default was a public limited company no further proceedings is to be taken. In the event, there is a prima facie material to conclude that the assessee in default were a private limited company, appropriate notice may be issued to the petitioners.
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