Section 179: Tax Recovery from director only when tax cannot be recovered from Company

Raja Ram Dalmia Vs PCIT (Calcutta High Court) High Court held that department has to first initiate proceedings against the defaulting private limited company and upon failure in their attempt to recover the tax dues power under section 179 of the Act could have been invoked. On facts it is clear that no such attempt was made by the department to recover the tax dues, which were stated to be in arrears for the assessment years 1983-84, 1985-86 and 1986-87. Admittedly, in the year 1990 the appellant had retired from his directorship and the company had changed hands and fresh set of directors h...