(1.) THE petitioner, Sanjay Ghai impugns the order dated 14th November, 2007 passed by the Assistant Commissioner of Income Tax, Circle 7(1), New Delhi under Section 179 of the Income Tax Act, 1961 (Act, for short). He has also prayed for quashing of recovery proceedings of outstanding demand and for stay of recovery of demand of Rs. 28,71,84,883/-.
(2.) INCOME Tax Department in their counter affidavit have stated that M/s Sarvodhya Realtors (P) Ltd. is liable to pay Rs.28,71,84,883/- (Rs.23,45,31,280/- for assessment year 1998-1999, Rs.4,47,73,904/- for assessment year 1999-2000 and 78,79,699 for assessment year 2000- 2001) and the petitioner is a director of the said company, which is a private limited company. It is stated that notice dated 27 th September, 2007 under Section 179 (1) of the Act was served upon the petitioner in his capacity as a director of M/s Sarvodhya Realtors (P) Ltd. at 81-D, Dila Ram Bazar, Rajpur Road, Dehradun. The said notice was received by one Abhay Singh on 11th October, 2007 at the said address as per the information received from the Deputy Commissioner of INCOME Tax, Circle-1, Dehradun by the Commissioner of INCOME Tax, Circle 7 (1), the Assessing Officer of Sarvodhya Realtors (P) Ltd. As there was no response or reply by the petitioner, after considering the facts of the case, an order under Section 179 of the Act dated 14th November, 2007 was passed against the petitioner for recovery of the said amount.
(3.) WE have examined the said contentions. WE have also looked at the quantum of demand and the legal issues raised by the petitioner. Keeping in view the aspects and questions raised, we feel that it will be appropriate and proper if the petitioner is given a hearing and a fresh order under Section 179 of the Act is passed. There is a dispute regarding service of notice dated 27th September, 2007. The respondent in the counter affidavit has stated that Abhay Singh had informed that the petitioner was out of station and intimation may be sent to him by writing to him another letter. However the respondent did not communicate or correspond with the petitioner thereafter. It may be noted that the notice was received by Abhay Singh on 11th October, 2007 at 12.30 pm and hearing was fixed on 15th October, 2007 i.e. just four days later. Thereafter, no communication was made by the respondent to the petitioner fixing the hearing or calling for reply. On 14th November, 2007 order under Section 179 was passed. It is not clear and there is no material/evidence whether the order under Section 179 of the Act dated 14th November, 2007 was ever served on the petitioner. No steps for recovery were undertaken even after passing of the order. Keeping in view the aspects and questions raised, we feel that it will be appropriate and proper if the petitioner is given a hearing and a fresh order under Section 179 of the Act is passed.