TMI Blog1971 (10) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... as been brought on record. Writ Petition No. M. P. 5544/71 to that effect has been filed and ordered to-day. The case of the petitioners is that the company ceased to carry on any business after 1955. On 26th June, 1955, the Registrar of Companies, Hyderabad, issued a notification under section 560(5) of the Companies Act, 1956, striking off the company from the register. This company had been assessed to income-tax under the Income-tax Act, 1922, for the assessment years 1953-54 to 1957-58 and a sum of Rs. 31,172.24 was found due by the company towards income-tax. On March 5, 1970, the Income-tax Officer, Ward-I, Vijayawada, issued notices to the petitioners stating that they were personally liable to pay the tax due by the company under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, in respect of any income of any previous year 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. " The basic condition that is necessary for the application of the aforesaid section 179 is that a private company should have been wound up after the commencement of the 1961 Act. It is only when this condition is fulfilled that the other provisions of section 179 are attracted. The question for consideration, therefore, is whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same meaning as has been given in the Companies Act. It cannot be given a wider meaning so as to take in even a company which has become defunct and struck off by the Registrar of Companies under section 560(5) of the Companies Act, 1956, without its being wound up. The learned counsel for the department urges that the expression " wound up " has to be given a liberal meaning and in the context it only means a company which has ceased to function or which has been dissolved. It is to be remembered that section 179 has been introduced to create a liability which did not exist under the 1922 Act ; and, further, that section creates a liability which is contrary to the provisions of the Companies Act. It is very clear from the section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , without being wound up, nothing precluded Parliament from saying so in so many words in section 179. A reading of the whole of section 179 clearly shows that it is applicable only to cases where proceedings for winding up are taken under the Companies Act and the companies is wound up under the said Act after the commencement of the Income tax Act, 1961. As already pointed out by us, there is nothing to show the winding-up of Andhra Automobiles was at any time taken up, and that it was wound up after the commencement of the 1961 Act, we have, therefore, no hesitation in holding that the provisions of section 179 are not attracted to the case before us. Having reached the conclusion that the provision of section 179 of the 1961 Act, are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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