YASH PAUL Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioners who are the directors of M/s Rashtriya Loan & Chit Fund Pvt. Ltd., Purani Mandi, Jammu, have challenged the assessment orders made for the years 1965-66, 1966-67, 1967-68 and 1968-69 and also for quashing of the notice issued to them under S. 179 of the IT Act, 1961, dt. 28th Feb., 1984, served upon them on 20th Sept., 1984. They have also prayed for quashing of the notice issued under S. 226(3) of the IT Act directing the Manager, Vijaya Bank, Old Hospital Road, Jammu, calling upon him to remit the amount in deposit lying with the bank in Account No. 110 to clear the arrears of the income-tax. It is submitted that as in view of the judgment in Syed Mubarak Shah Naqshabandi vs. CIT (1977) CTR (J&K) 180 : (1977) 110 ITR 217 (J&K) : (1977) JKIR 1, the company is not liable to pay the tax, no notice of demand could be issued to the directors of the company. It is further submitted that prior to the Taxation Laws (Amendment) Act, 1975, S. 179 of the IT Act operated only in case of private company in liquidation and that the directors of the company were not personally liable prior to the amendment. In the counter-affidavit filed on behalf of the respondent it is submitted that the petition was liable to be dismissed on account of the unexplained delay and laches and that the company, namely, M/s Rashtriya Loan & Chit Fund Co., was rightly assessed to the income-tax. It is contended that the petitioners are personally liable to pay the tax under S. 179 of the Act being directors of the company.

(2.) I have heard learned counsel for the parties and perused the record.

(3.) SO far as the liability of M/s Rashtriya Loan and Chit Fund Co. is concerned, the argument of the petitioners has no force in view of the judgment delivered in writ petition No. 809 of 1984.