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2022 (9) TMI 1325 - HC - Income TaxRecovery of the amounts from the company and its directors - Liability of directors of private company u/s 179 - Whether company is presently stated to be undergoing Corporate Insolvency Resolution Process before the National Company Law Tribunal (NCLT) and the Income Tax Department ought to have raised/made its claim before the NCLT without pursuing the demand as against the Directors? - HELD THAT:- Only condition set out under Section 179 is to the effect that attempts should be made by the Income Tax Department to recover the tax dues from the company and such attempts should have been unsuccessful. The measures taken by the Department to recover the dues that have admittedly been unsuccessful. Moreover, the company is itself before the National Company Law Tribunal, which establishes that it does not presently, have the funds to settle the tax dues. The condition precedent under Section 179 stands complied in this case. Section 179(1), in itself, grants the Directors the liberty to prove that the non-recovery cannot be attributed to gross neglect, misfeasance or breach of duty on their part in relation to the affairs of the company. In the present case, the replies filed by the petitioners to the show cause notices prior to passing of the impugned orders merely contain a bald assumption to this effect. They have not, in my view, established, that the petitioners had taken all reasonable efforts to ensure compliance of the company to statutory dues and were not guilty of neglect, misfeasance or breach of duty in that regard. The impugned orders do not suffer from any infirmity and for the reasons set out above, the same are confirmed. No costs. Connected Miscellaneous Petitions are closed.
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