JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr. Jaimin Dave for the petitioners and learned advocate Mr. Nikunt Raval for the respondents.

2. The petitioners have challenged the order dated 26.10.2017 passed by respondent no. 1 under section 179 of the Income Tax Act, 1961 (For short “the Act”) fastening the liability upon the petitioners to pay the outstanding dues of M/s. Nakoda Syn-tex Private Limited (herein-after referred to as “the said company”) as the petitioners are the Directors of the said company for the assessment year 2014-2015. The petitioners have also challenged order dated 29.01.2018 passed under Rule 48 of the Second Schedule to the Act attaching the residential property of the petitioners and notice of demand dated 11.01.2018 under section 222 of the Act as a consequence of order dated 26.10.2017.

3. Brief facts of the case are that the petitioners were appointed as the Directors of M/s. Nakoda Syn-tex Private Limited.

3.1 Respondent no. 1 carried out assessment under section 143(3) of the Act against the said company for the Assessment Year 2014-2015 and passed the assessment order dated 23.12.2016 making addition of Rs. 7,00,00,000/- on account of bogus unsecured loans. Consequently demand notice dated 23.12.2016 under section 156 of the Act was issued upon the said company raising a demand of Rs. 3,06,63,860/-.

3.2 Being aggrieved by the said assessment order and demand notice, the said company preferred an appeal before the Commissioner of Income Tax Appeal, Surat on 17.01.2017.

3.3 On 9.02.2017, respondent no. 1 issued a recovery notice demanding payment of the outstanding dues from the said company.

3.4 Pursuant to such recovery notice, the said company filed a stay application on 22.02.2017 before the respondent no. 1 appraising about the appeal filed by the said company.

3.5 It is the case of the petitioner that respondent no. 1 rejected the stay petition of the said company vide order dated 17.03.2017 without affording any opportunity of hearing to the Directors of the said company.

3.6 Respondent no. 1 thereafter issued show-cause notice dated 6.7.2017 under section 179 of the Act.

3.7 The petitioners vide individual letters dated 16.08.2017 submitted reply to the said show cause notice.

3.8 Respondent no. 1 thereafter passed the impugned order dated 26.10.2017 under section 179 of the Act.

3.9 On 11.01.2018, respondent no. 2 issued a certificate under section 222 of the Act and notice of demand calling upon the petitioners to pay the outstanding dues of the company within 15 days of receipt of notice.

3.10 The petitioner did not have adequate means to pay such a huge demand and therefore, could not comply with the said notice. Respondent no. 2 therefore, passed an order dated 29.01.2018 under Rule 48 of the Second Schedule to the Act.

3.11 Being aggrieved by the impugned action of the respondents, the petitioners have preferred the present petition.

4. The coordinate Bench of this Court by order dated 29.07.2019 issued the notice and granted the order of status-quo vis-a-vis the properties of the petitioners which are attached by the respondents.

5. Learned advocate Mr. Jaimin Dave for the petitioners submitted that the impugned order passed under section 179 of the Act and consequential orders are without jurisdiction as the basic condition for invoking section 179 of the Act are not satisfied in the facts of the case.

5.1 It was submitted that for invoking jurisdiction under section 179 of the Act, twin conditions with regard to the amount of tax dues from a private limited company which is not recovered from such company is attributable to the gross neglect, misfeasance or breach of duty of the Director, is not satisfied in the present case. It was submitted that in the facts of the case there is nothing on record to suggest that the respondent authorities have been satisfied before invoking powers under section 179 of the Act vis-a-vis the recovery of the outstanding dues of the private limited c