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Section 179(1) of the Income-tax Act, 1961 - Companies in liquidation - Liability of directors - Whether director of a private company is liable for arrears of tax only in case amount of arrears of tax cannot be realised from auction of assets of that company - Held, yes FACTS The assessee, a director of private company, was held liable for tax liability under section 179(1). On writ, the learned single Judge, however, set aside the ITO's order under section 179. On appeal by the revenue : HELD As a director of the company it was the bounden duty of the assessee to pay tax due from the company and as the assessee had failed to discharge that duty, the provisions of section 179(1) were clearly attracted. Accordingly, the appeal was to be allowed and the of the single Judge was to be set aside. Consequently, the order passed by the ITO under section 179 was to be upheld but subject to the direction that the ITO would redetermine the amount of arrears of tax due from the company. The department was also directed to enforce the order personally against the assessee only in case the amount of arrears of tax could not be realised in the proposed auction to be held. CASE REVIEW Judgment of single judge reported as Praveen D. Desai v. ITO [1984] 149 ITR 187 (Bom.)reversed;Union of India v. Manik Dattatreya Lotikar [1988] 172 ITR 1 (Bom.) followed and relied upon. G.S. Jetley and Mrs. Manjula Singh for the Applicant. Dilip Dwarkadas for the Respondent. JUDGMENT Pendse, J. - The principal point involved in this appeal preferred against the judgment dated 1-2-1984 delivered by the learned single Judge in Writ Petition No. 982 of 1980 stands concluded in view of our decision dated 11-11-1987 in Appeal No. 909 of 1983. In view of that decision, Shri Jetley, the learned counsel appearing on behalf of the appellants Income-tax Department, submitted that this appeal also must succeed. 2. Shri Dwarkadas, the learned counsel appearing for the respondent - assessee, submitted that though the principal question about the liability of the director of a private limited company for discharging liabilities of the company under section 179(1) of the Income-tax Act, 1961 ('the Act') is…

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