TMI Blog2019 (7) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... f this requirement is satisfied, it is open for the concerned director to prove that such non-recovery cannot be attributed to any gross negligence, misfeasance or breach of duty on his part in relation to the affairs of the company. On all these counts, therefore, the petitioner had a right to oppose and resist the proposal of the Assessing Officer. It is not even averred that the dues of the company should not be recovered form the said Company and that therefore, the onus would be on the director to prove that the same could not be attributed to his gross neglect, misfeasance or breach of duty. The action of the AO to order recovery of the unpaid tax dues of the company from the petitioner, thus, was without the foundation of the nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany had filed its return of income. The Assessing Officer passed the order of assessment on said return on 30.12.2017 which gave rise to a tax demand of ₹ 36.99 Crores (rounded off). The company filed an appeal before the Appellate Commissioner. When such appeal was pending, respondent No. 1 issued a notice dated 26.6.2018 calling upon the petitioner why an order under Section 179 of the Act should not be passed treating the petitioner jointly and severally liable for payment of tax dues of the said Company. The petitioner replied to the show cause notice under a communication dated 14.7.2018 and raised several contentions. The principal contentions of the petitioner were that there is nothing on record to suggest that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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. (2) Where a private company is converted into a public company and the tax assessed in respect of any income of any previous year during which such company was a private company cannot be recovered, then, nothing contained in sub-section (1) shall apply to any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the onus would be on the director to prove that the same could not be attributed to his gross neglect, misfeasance or breach of duty. The action of the Assessing Officer to order recovery of the unpaid tax dues of the company from the petitioner, thus, was without the foundation of the necessary facts in show-cause notice. 6. Further, in the context of establishing that such recovery cannot be attributed to his gross neglect, misfeasance or breach of duty, the petitioner had made a detailed representation. The Assessing Officer passed the order without considering such representation. When this was pointed out to him, he passed a further order describing it as one of the 'Corrigendum'. This was also impermissible. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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