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2018 (4) TMI 646

of the Private Limited Company in respect of the Assessment Year 2008-09 which it failed to honour - Held that:- It is an agreed position between the parties that the issue arising herein would stand concluded in favour of the petitioners by the decision of this Court in Madhavi Kerkar V/s. Assistant Commissioner of Income Tax (2018 (1) TMI 749 - BOMBAY HIGH COURT) as held that the jurisdiction to proceed against the Directors of a delinquent Private Limited Company under Section 179(1) of the Act will only arise when the Revenue is unable to recover the tax dues from the delinquent Private Limited Company. The show cause notice issued to the Directors of the Private Limited Company must indicate briefly the steps taken to recover the tax d .....

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s sought, the impugned order dated 26th December, 2017 was passed under Section 179(1) of the Act making a demand of ₹ 4.69 crores upon the petitioner. 4. The grievance of the petitioner is that the impugned order dated 26th December, 2017 passed by the Deputy Commissioner of Income-Tax is without jurisdiction for the reason that the jurisdiction to invoke Section 179(1) of the Act can only arise when the tax dues of the delinquent Private Limited Company cannot be recovered from it. It is submitted that the issue as raised herein stands concluded in favour of the petitioner by the decision of this Court in Madhavi Kerkar V/s. Assistant Commissioner of Income-Tax (Writ Petition No. 567 of 2016) rendered on 5th January, 2018. 5. Howeve .....

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hich interalia prevents implying and/or reading anything in the statute not expressed therein. Thus, we find no merit in the above distinction. 5. So far as the second and third submission on behalf of the Revenue that in the facts of this case, the efforts which were made to recover the tax dues from the delinquent company though not stated in the show cause notice are found in the impugned order or in any event in the affidavit-in-reply dated 14th February, 2018. Thus, is sufficient compliance with Section 179 of the Act. It is the petitioner's case in the petition that, an amount of ₹ 49.81 crores are loans advanced to companies/associates of its Director, Mr. Praful Setna. The attempts at recovery if made known in the show cau .....

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of efforts made and its results. 8. Therefore appropriately, the notice to show cause issued under Section 179 (1) of the Act to the directors of the delinquent Private Limited Company must indicate albeit, briefly, the steps taken to recover the tax dues and its failure. In cases where the notice does not indicate the same and the Petitioner raises the objection of jurisdiction on the above account, then the Petitioner must be informed of the basis of the Assessing Officer exercising jurisdiction and the notice' / directors response, if any, should be considered in the order passed under Section 179 (1) of the Act. In this case the show cause notice dated 16th December 2015 under Section 179 (1) of the Act does not indicate or give an .....

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cts and if the Revenue finds merit in the objection, it can take action to recover it from the delinquent Private Limited Company. This before any order under Section 179(1) of the Act is passed adverse to the noticee. In this case, admittedly the show cause notice itself does not indicate any particulars of the failed efforts to recover the tax dues from the delinquent Private Limited Company. Thus, the issue stands covered in favour of the petitioner by the order of this Court in Madhavi Kerkar (supra). In the above circumstances, the impugned order dated 26th December, 2017 is quashed and set aside. 7. However, it is made clear that the Assessing Officer is at liberty to pass a fresh order after issuing appropriate notice to the petition .....

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