YESHWANT RAGHUNATH BHIDE Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE decision on the question raised in this writ petition depends upon the interpretation of section 179 of the Income-tax Act, 1961 (shortly called "the Act").

(2.) THE facts are these : Yeshwant Raghunath Bhide, the petitioner, was one of the directors of a company called the Bijapur Engineering and Auto-Works Private Ltd. It was incorporated as a private limited company under the provision of the Indian Companies Act, 1913. THE company was carrying on its business for a couple of years and, thereafter, it is said that it landed in difficulties and it stopped its business. For the assessment year 1957-58, the company was assessed to income-tax under the provisions of the Indian Income-tax Act, 1922, on a total income of Rs. 2,933 and the tax assessed thereon worked out to Rs. 1,510.50. With a little assets remaining with the company, a portion of the tax was paid and the balance of Rs. 1,336 remained outstanding. THE Income-tax Officer (Collection), Hubli, who is the respondent before me, finding that the arrears of tax could not be recovered from the assets of the company, called upon the petitioner in his letter dated 30th April, 1971, to pay the balance as he was an ex-director of the company and, therefore, liable to make good the payment under section 179 of the Act.

(3.) THE principal contention urged by Sri. G. Sarangan, learned counsel for the petitioner, was that section 179 of the Act cannot be attracted to the facts of the present case. It is, therefore, necessary to set out the said section hereunder :