Liability of Manager of a Company

Section 422 — - LIABILITY OF MANAGER OF A COMPANY

Section 422 of the Income-tax Act, 2025 corresponds to s. 179 of the Income-tax Act, 1961.

STATUTORY ARCHITECTURE

Director / manager of a private company in liquidation is jointly and severally liable for tax dues unless he proves non-recovery is not due to his gross negligence, misfeasance or breach of duty.

PRACTITIONER PLANNING NOTES

• Burden of proof on director to show no negligence -- file Board minutes, show diligent recovery efforts.
• Public companies are excluded; only private companies under liquidation.
• Director liability survives resignation if liability arose during tenure.

CROSS-REFERENCES

• s. 412 (default & demand timeline).
• s. 415 / 416 (TRO recovery).
• s. 220(6) / 416(6) (stay during appeal).