Directors Not Responsible for Tax Recovery After Liquidation: Madras High Court
The Madras High Court has ruled that directors of a company under liquidation are not liable for tax recovery if the non-recovery was not due to their negligence
The company, Infinitas Energy Solutions Pvt. Ltd., and its director (petitioner) were under liquidation, and the company had entered insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), 2016. Therefore, an Interim Resolution Professional (IRP) was appointed for the company. Later, the company was ordered to be liquidated, and the same professional was appointed as its liquidator.
The tax authorities initiated recovery proceedings by attaching the personal bank accounts of the…