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October 2023

Recovery of tax — Private Company — Recovery from the director — Non-recovery not shown to be attributable to neglect, misfeasance or breach of duty on the part of the assessee — Tax is not recoverable from Director.

By K B Bhujle, Ritu Punjabi
Advocates
Reading Time 3 mins

47. Geeta P. Kamat vs. PCIT

[2023] 455 ITR 234 (Bom.)

A.Ys. 2008-09 and 2009-10

Date of order: 20th February, 2023

Sections 179 and 264 of ITA 1961

Recovery of tax — Private Company — Recovery from the director — Non-recovery not shown to be attributable to neglect, misfeasance or breach of duty on the part of the assessee — Tax is not recoverable from Director.

A show cause notice was issued upon the assessee u/s.179 of the Income-tax Act, 1961 (“the Act”) requiring the assessee to show cause why recovery proceedings should not be initiated upon her in her capacity as the director of Kaizen Automation Private Limited (KAPL) for the A.Ys. 2008–09 and 2009–10 due to non-recovery of taxes despite the attachment of the bank account.

In response to the show cause notice, the assessee submitted that the non-recovery of taxes could not be attributed to any gross neglect, misfeasance, breach of duty on her part in relation to the affairs of the company. The assessee contended that even though she was the director of KAPL, she neither had any control over the affairs of the company

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