A.J. Shastri, J.

1. The petitioner, by way of present petition, has challenged the legality, validity and propriety of an order dated 31.3.2016 issued under Section 179 of the Income-tax Act, 1961 (for short 'the Act') whereby, the corporate veil of a company is lifted and the directors are held to be defaulters within the meaning of Section 179 of the Act and it is this order which is made the subject matter of present petition.

2. Brief facts are as under :

2.1 The company named as Hirak Biotech Limited was incorporated under the provisions of the Companies Act, 1956 on 25.1.2005 initially with main directors, namely, Mr. Pranav Amratlal, Mr. Pratik P. Shah and Mrs. Niketa B. Bhatt. Within a short span, on 20.3.2005 the petitioner was introduced as director of this company and the petitioner continued as such upto 5.9.2005. The petitioner presented the petition on the premise that though he was appointed as a director, in reality had not acted as such; neither he had made any signature in any affairs of the company nor on any financial statements, banks, income tax documents and except remaining as a director he was not in charge of the affairs of the company. He asserted in the petition that one Mr. Pratik R. Shah was managing the affairs of the company and he merely brought the capital in the form of shares. Except remaining as a director on the board of the company, he in reality had not acted as such and also contended that he had put the resignation on 5.9.2005.

2.2 The petitioner further contended that though the petitioner had resigned from the company, he served with a notice on 11.10.2013 issued under Section 179 of the Act whereby, an attempt was made to saddle with liability of the company. To the said notice, the petitioner gave reply on 17.10.2013 and thereafter, for a pretty long time for almost a period of one year, no response in that regard was received by the petitioner. Later on, on 4.9.2014 he received a communication in the form of show cause notice to explain as to why he should not be held responsible to pay the dues of the company and against that show cause notice, through consultant the petitioner requested the authority on 10.9.2014 to grant some time to enable him to take some steps and as such, upto 15.9.2014 time was granted. However, by that time, the petitioner instead of responding to notice has filed the petition before this Court being SCA No. 12861 of 2014 challenging the legality and validity of the said notice dated 4.9.2014. This Court, while taking up the plea of the petitioner, found that while initiating such action, no adequate opportunity was given to the petitioner nor any proper procedure was followed and therefore, the action in purported exercise of power under Section 179 of the Act came to be quashed and the petition was partly allowed by an order dated 12.2.2015 and consequently, directed to take steps in accordance with the provisions of law by keeping the rights and contentions of both the sides open and the petition came to be disposed of.

2.3 Subsequently, the respondent authority observed the order of this Court and thereafter, after observing the statutory provisions, issued a fresh show cause notice on 19.6.2015 in detailed by giving all particulars and called upon the petitioner to explain as to why steps should not be taken as contemplated under Section 179 of the Act. To this notice, the petitioner appears to have replied on 24.7.2015 trying to explain his position as narrated above in brief and to this reply, an affidavit of Mr. Pratik R. Shah, one of the directors also came to be attached. An attempt is made by the petitioner to indicate that said Mr. Pratik R. Shah is the responsible person to the affairs of the company and not the petitioner. Along with the said reply to the show cause notice, a statement also came to be given with respect to allotment