TMI Blog2023 (2) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... gence, misfeasance or breach of duty as Directors of the assessee company. In the impugned order, AO has failed to consider the fact that the petitioners have tendered their explanation and the petitioners have not remained negligent nor there is any misfeasance or breach of trust on part of the petitioners and only because the petitioners have been unable to deposit 20% of the demand raised in the assessment order, the petitioners cannot be said to be negligent and respondent no.1 cannot therefore, invoke jurisdiction under section 179 of the Act. This Court in case of Sadhna Ramchandra Jeswani [ 2018 (9) TMI 77 - GUJARAT HIGH COURT] notice that in showcause notice the Assessing Officer has not laid down sufficient foundation for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act against the said company for the Assessment Year 2013-2014 and passed the assessment order dated 21.03.2016 resulting into additional demand of Rs. 5,51,56,520/-. Consequently demand notice dated 21.03.2016 under section 156 of the Act was issued upon the said company raising demand of Rs. 5,51,56,520/-. 3.2) Being aggrieved by the said assessment order and demand notice, the said company preferred an appeal before the Commissioner of Income Tax Appeal-1, Surat on 30.05.2016. 3.3) Respondent thereafter issued show cause notice dated 10.11.2016 under section 179 of the Act to the petitioners. 3.4) The petitioners vide individual letters dated 23.11.2016 submitted reply to the said show cause notice. 3.5) Respondent no.1 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd nor taken any assertive steps for the purpose of recovering the outstanding tax dues from the private limited company. In support of his submissions, reliance was placed on the following decisions: 1) In case of Bhagwandas J. Patel v. Deputy Commissioner of Income-tax reported in (1999) 238 ITR 127 (Gujarat). 2) In case of Indubhai T. Vasa v. Income Tax Officer, Ward 4(3) reported in (2006) 282 ITR 120( Gujarat). 3) In case of Amit Suresh Bhatnagar v. Incometax officer reported in (2009) 308 ITR 113 (Gujarat). 4) In case of Mehul Jadavji Shah v. Deputy Commissioner of Income Tax reported in (2018) 403 ITR 201 (Bombay). 5) In case of Sadhna Ramchandra Jeswani v. Income Tax Officer (judgment dated 27.08.2019 in Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income-tax reported in (2021) 132 taxmann.com 283 (Delhi). 6.3) It was further submitted that reliance placed by the petitioners on the various decisions of this Court are not applicable in the facts of the said case as it is for the petitioners to point out that the petitioners have not remained negligent for non recovery of the outstanding dues of the private limited company. 7.Having heard the learned advocates for the respective parties, it appears that the respondent authorities have failed to take any action for recovery of the outstanding dues except issuing notice for recovery and attaching the bank account of private limited company. Section 179(1) of the Act reads as under : Liability of directors of private com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to be negligent and respondent no.1 cannot therefore, invoke jurisdiction under section 179 of the Act. 9.This Court in case of Sadhna Ramchandra Jeswani v. Income Tax Officer (supra) in similar situation has held as under : 8. Reverting back to the facts of the case, we notice that in showcause notice the Assessing Officer has not laid down sufficient foundation for invoking section 179 of the Act leave alone broadly pointing out he has not even alleged that non-recovery was on account of gross negligent, misfeasance or breach of duty on part of the petitioner in relation to the affairs of the company. His final conclusions in the impugned order are therefore based on the material at his command which was never shared with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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