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 24.01.2017 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. G.P. Shah Investment (herein-after referred to as “the said company”) as the petitioners are the Directors of the said company for the Assessment Year 2013-2014.

3. Brief facts of the case are that the petitioners were appointed as the Directors of M/s. G.P. Shah Investment 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 2013-2014 and passed the assessment order dated 21.03.2016 resulting into additional demand of Rs. 5,51,56,520/-. Consequently demand notice dated 21.03.2016 under section 156 of the Act was issued upon the said company raising demand of Rs. 5,51,56,520/-.

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 30.05.2016.

3.3 Respondent thereafter issued show-cause notice dated 10.11.2016 under section 179 of the Act to the petitioners.

3.4 The petitioners vide individual letters dated 23.11.2016 submitted reply to the said show-cause notice.

3.5 Respondent no. 1 thereafter passed the impugned order dated 24.01.2017 under section 179 of the Act.

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

4. This Court by order dated 29.07.2019 issued the notice and stayed the operation and implementation of the impugned order dated 24.01.2017 passed under section 179 of the Act.

5. Learned advocate Mr. Jaimin Dave for the petitioners submitted that the impugned order passed under section 179 of the Act is 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 negligence, 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 company and there is no finding that such non recovery of taxes is attributable to the gross negligence, misfeasance or breach of duty of the petitioners. It was submitted that except issuance of recovery notice, respondent no. 1 has neither issued any notice of demand nor taken any assertive steps for the purpose of recovering the outstanding tax dues from the private limited company. In support of his submissions, reliance was placed on the following decisions:

(1) Bhagwandas J. Patel vs. Deputy Commissioner of Income Tax, 238 ITR 127 (Gujarat)

(2) Indubhai T. Vasa vs. Income Tax Officer, (2006) 282 ITR 120 (Gujarat)

(3) Amit Suresh Bhatnagar vs. Income Tax Officer, (2009) 308 ITR 113 (Gujarat)

(4) Mehul Jadavji Shah vs. Deputy Commissioner of Income Tax, (2018) 403 ITR 201 (Bombay)

(5) Sadhna Ramchandra Jeswani vs. Income Tax Officer in Special Civil Application No. 5354/2018, dated 27.08.2019

(6) Susan Chacko Perumal vs. Assistant Commissioner of Income Tax, (2017) 399 ITR 74 (Gujarat)

(7) Gul Gopaldas Daryani vs. Income Tax Officer, (2014) 367 ITR 558 (Gujarat)

6. On the other hand, learned advocate Mr. Nikunt Raval for the respondents submitted that the compliance of the provisions of section 179 of the Act are made prior to passing of the impugned order. It was submitted that the privat