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Section 179 provide for recovery of taxes from directors in the event of no recovery possibilities from the company.

Taking note of the provisions the Madras High Court in (2023] 22 ITR-OL 189 (Mad) in the case of a company undergoing corporate insolvency resolution process before the National Company Law Tribunal (NCLT) held that the only condition set out under section 179 is to the effect that attempts should be made by the Income-tax Department to recover the tax dues from the company and such attempts should have been unsuccessful and in this case only because the company itself was before the National Company Law Tribunal, in the learned Judge’s view it established that it does not presently, have the funds to settle the tax dues and that therefore give good reasons to invoke recovery action against directors.

In such type of NCLT cases therefore the department may not have to elaborate much as a prerequisite in their s. 179 show cause notice on the measures for recovery effected in the case of the company as otherwise so required by law.

The department therefore may have much to cheer for these observations from DR. MS. ANITA SUMANTH J.


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