Company has defaulted in paying demand, also compay has as good as Nil assets. The director of demand year is dead now. Son of director was also director for two years but not a director now.
In this scenario, onus of paying demand lies with whom.
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On death Director of Company
Replies (4)
The onus of demand lies with the current directors individually and severally.
Unless there is an agreement between old and new directors for any such type of future liabilities. But that's strictly remains between directors and not applicable to IT Dept for recovery of tax dues.
Unless there is an agreement between old and new directors for any such type of future liabilities. But that's strictly remains between directors and not applicable to IT Dept for recovery of tax dues.
1. Can IT dept press for recovery?
2. According to Transfer of Property Act, son acquires property by virtue of decency, then is son of Director liable for outstanding demand?
3. is there any way by which IT DEPT can initiate recovery?
2. According to Transfer of Property Act, son acquires property by virtue of decency, then is son of Director liable for outstanding demand?
3. is there any way by which IT DEPT can initiate recovery?
Without looking into documents it is difficult to respond
1. No section in companies act which exclusively states that income tax due if not paid will be payable by company directors.
2. However, it is known the fact that in case if the company is not liable to pay income tax it is the director's responsibility to pay such amount of tax.
3. Now if any director is dead then the onus is on the legal representative to pay such amount of tax as per sec 159 of the act.
4. It says where a person dies his legal representative shall be liable to pay the amount due under this act. By virtue of this section, the onus falls under the legal representative of the director.
Please correct me if the above solution has an alternative view.
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