Case Law Details
Geeta P. Kamat Vs PCIT (Bombay High Court)
Bombay High Court held that in absence of any finding that non-recovery of tax due from the company can be attributed to any gross-negligence, misfeasance or breach of duty on the part of the petitioner, no order could have been made u/s 179(1) of the Income Tax Act.
Facts- A show cause notice dated 12th January 2017 was served upon the petitioner in terms of section 179 of the Act requiring the petitioner to show cause as to why recovery proceedings be not initiated against her in her capacity as a director of KAPL inasmuch as the assessee company was not traceable on the available addresses and further that the tax dues could not be recovered despite attachment of the bank accounts as the funds available were insuffcient. An amount of Rs.1404.42 lacs was thus sought to be recovered from the petitioner.
The petitioner challenges the order dated 22nd December 2017 passed by the Income Tax Officer under section 179 of the Income Tax Act, 1961 (‘the Act’) treating the petitioner liable for taxes allegedly due from the company M/s. Kaizen Automation Pvt. Ltd. (KAPL) for the assessment years 2008-09 and 2009-10. Order dated 18th March 2019 passed by the Principal Commissioner of Income-tax, Mumbai dismissing the revision petition under section 264 of the Act is also challenged in the present petition.
Conclusion- Held that the AO has not specifically held the petitioner to be guilty of gross neglect, misfeasance or breach of duty on part in relation to the affairs of the company. Not a single incident, decision or action has been highlighted by the AO, which would be treated as an act of gross neglect, breach of duty or malfeasance which would have the remotest potential of resulting in non-recovery of tax due in future.
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