Liquidation of company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 July 2012 A Pvt ltd company is being liquidated by notice from creditor & company has almost no asset , but has old income tax liabilities.
If company is wound up by court order, then will the liability of Income tax cease , or will directors be asked to pay old Income tax Liabilities.
If shareholders are liable to the extent of Share holding, then what about directors liability?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 July 2012 I think, the word "Limited" will play its own role.
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Shareholders can be made liable to the extent of their unpaid calls on shares issued to them.
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We can not go in "Private" to make personally liable the directors.
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However, Section 179 of IT Act 191, is an overriding
provision which makes liable to the directors, jointly and severally.
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If he can prove that the liability of tax is not due to his own gross neglect, misfeasance or breach of duty, then the directors can not be made liable.
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Querist : Anonymous

Querist : Anonymous (Querist)

25 July 2012 Thanks a lot Mr Bafna

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