JUDGMENT

The petitioners are before this Court challenging Ext.P11 order passed by the second respondent, whereby the proceedings taken by the first respondent under Section 179 of the Income Tax Act against the Directors of the first petitioner Company was upheld. The petitioners, who are the Company as well as the Directors, contend that there is absolutely no rhyme or reason in proceeding against the Directors of the Company, without arriving at a finding by the departmental authorities that the amount cannot be recovered from the Company, invoking the provisions under , which is cited as a mandatory requirement.

2. The contentions of the petitioners are mainly of two fold:

firstly, petitioners submit that while issuing Ext.P9 order, no finding was arrived at as to the mandatory requirement that the amount cannot be recovered from the Company. Secondly, even if in a case where such a finding is there, a proceeding under Section 179 will be justified only if the lapse is directly attributable to the gross negligence, misfeasance etc on the part of the Directors.

3. In support of the contentions raised as above, particularly with respect to the first point, the learned counsel f