TMI Blog2008 (10) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent. JUDGMENT The judgment of the court was delivered by D. A. MEHTA J. - As the issue involved in all the three petitions is common, all the three petitions have been taken up for hearing together. 2. Rule in each of the petitions. Learned counsel appearing for the respondent-authority in each of the petitions is directed to waive service of rule. By consent of the learned advocates appearing for the respective parties, petitions are taken up for final hearing and disposal today. 3. Each of the petitioner has challenged order dated 19-8-2008 made by respondent-authority under Section 179 of the Income Tax Act, 1961 ("The Act"). Each of the petitioners is a Director of a Company, named, Diamond Project P. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to establish that such recovery could not be effected from the Company and only then could the Directors be called upon to discharge the liability of the Company. In support of the submission made, reliance has been placed on the judgment of this Court in the case of Indubhai T. Vasa (HUF) v. Income-Tax Officer, (2006) 282 ITR 120. 5. Learned senior advocate appearing for respondent-authority has placed reliance on the affidavit-in-reply dated 13-10-2008 of the respondent-authority. It was submitted that in fact from the correspondence it was apparent that the Company having expressed its inability to discharge the liability, respondent-authority was justified in acting under Section 179 of the Act. That the respondent-authority ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive steps to recover the outstanding dues from the Company and has not been able to recover the entire outstanding liability. Applying the aforesaid ratio to the facts of the case, it is apparent that except for calling upon the Company and/or the petitioners-Directors to discharge the liability, Revenue has taken no effective steps to effect recovery of outstanding dues from the Company. In the circumstances, the impugned order dated 19-8-2008 made in case of each of the three petitioners, cannot be permitted to operate. Order dated 19-8-2008 made under Section 179 of the Act is, therefore, quashed and set aside. 8. Needless to state that this order shall not preclude the Revenue from taking necessary steps to effect recovery from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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