Amendment of section 179
41. In section 179 of the Income-tax Act, after sub-section (2), the following Explanation shall be inserted with effect from the 1st day of June, 2013, namely:––
‘Explanation.–– For the purposes of this section, the expression “tax due” includes penalty, interest or any other sum payable under the Act.’.
Notes on Clauses:
Clause 41 of the Bill seeks to amend section 179 of the Incometax Act relating to liability of directors of private company in liquidation.
The existing provisions in sub-section (1) of section 179 provide that where any tax is due from a private company in respect of any income of any previous year or from any other company in respect of any income of any previous year during which such other company was a private company cannot be recovered, then, every person who was a director of the private company at any time during the relevant previous year, shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company.
It is proposed to insert an Explanation to the aforesaid section so as to clarify that the expression “tax due” includes penalty, interest or any other sum payable under the Act.
This amendment will take effect from 1st June, 2013.
