Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Short Notes

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (7) TMI 612

requested by the petitioner company - request to allow to carry forward the loss beyond the statutory period - HELD THAT:- In the context of income tax concession, in para 2.1 of the said scheme, the reference was made to the Department’s letter dated 15.2.2012 stating that the company had not quantified its tax liability in the projected statement and that the reliefs sought by the company can be considered only after the details are received from the company. In this context, the Board noted that at an appropriate place, the words “to consider” have already been prefixed. The combine reading of para 2 and 2.1 of the said scheme would clearly bring about the purpose and intent of use of the said expression ‘to consider’. In the context of state tax, the Board clearly noted the stand of the State Government that there is no policy of the State Government to waive the taxes. The Board was, however, of the opinion that the expression “to consider” would enable the company to claim such benefits if in future, the Government policy changes. The scheme did not contain any mandate to the Income Tax Department to grant the tax concession requested .....

X X X X X X X

Full Text of the Document

X X X X X X X

owing clause was inserted:- 11.3.1 FROM CBDT a) To consider to exempt / grant relief to the company from the provisions of Section 41(1), 45, 72(3), 43-B, 79, 80 read with 139, 115JB and provisions of Chapter XVII of the Income Tax Act. b) To consider to waive penal interest, simple interest, compound interest, liquidated damages on the liability of the company, if any, as on cut off date. 3. On 15.2.2012, the BIFR sanctioned a draft scheme in connection with the tax waivers by the State as well as Income Tax Department. It was observed as under:- 2. In the hearing held today (15.2.2012) the representative of IDBI (OA) submitted that they have received objections from Inds. & Mines Deptt., of Govt of Gujarat saying that the State Govt. can not grant any relief to the company since at present there is no policy for providing reliefs and concessions to the sick company. IDBI (OA) referred to para 11.3 of circulated DRS and said that no monitory relief has been sought by the company. The Bench observed that it is possible that the State Govt comes up any time with a new policy giving reliefs and concessions to the sick companies hence this para may not be deleted. The Bench consid .....

X X X X X X X

Full Text of the Document

X X X X X X X

for the consideration of the revenue to be allowed only when it is must for the success of a scheme sanctioned under the SICA Act, 1985. It cannot be allowed as a matter of routine just because an industrial unit is facing a resource crunch. Therefore, the relief from revenue is allowed only when without the same a sanctioned scheme which is otherwise successful, would fail. That does not appear to be the scenario here. The cash flow of the company is constantly improving. Admittedly, there is no debt on the company and the DSCR is comfortable. The profits are steadily rising. In fact as per figures generated from the Bombay Stock Exchange (BSE) the nine months profits for the year ending Dec., 2016 shows fivefold rise to ₹ 591.23 lacs from ₹ 107.43 lacs in the corresponding period of 2015. Recognizing this turnaround in business, the share price of company reached all time high at ₹ 382 on 2.2.2.2017 and the share currently as on 1.3.2017 trades at ₹ 335 in BSE as against ₹ 100/- on 16.5.2016. This clearly shows that company is not in need of any help from the revenue and the sanctioned scheme has successfully revived the sick company even without an .....

X X X X X X X

Full Text of the Document

X X X X X X X

ng financial institutions. 8. On the other hand, learned counsel for the Department opposed the petition contending that the petitioner had not shown any urgency in pursuing the scheme before the Department. Right from the year 2012, the Department had written several letters to the petitioner to supply necessary details but such details were not supplied. The claim of the petitioner is thus, highly belated. Further, there was no mandate in the scheme to the Department to grant the tax waiver. There was only a suggestion to consider the same. The Department has examined the relevant aspects and come to the conclusion that the same cannot be granted. 9. Chapter II of SICA pertains to references, inquiries and schemes. Section 15 of the SICA pertains to reference to the Board. Upon such reference being made under Section 16, inquiry into working of sick industrial company would be undertaken. Section 17 pertains to powers of Board to make suitable order on the completion of inquiry. Section 18 of SICA pertains to preparation and sanction of schemes. Subsection (1) of Section 18 envisages preparation of the draft scheme by the operating agency appointed by the Board. Under clause (a) .....

X X X X X X X

Full Text of the Document

X X X X X X X

en by a person required by the scheme to provide financial assistance, the Board would sanction the scheme accordingly. 10. The crux of Section 19 of SICA is that where any waiver or concession is to be granted by the Central Government, State Government or the like under the scheme, the scheme would be circulated to such authority for its consent and only upon such consent being given, that such term in the scheme would be binding to such Government or authority. 11. In the impugned order dated 2.11.2017, the Authority has made a reference to letter dated 13.1.2012 under which the the Department had objected to the grant of the reliefs of tax concession at the time of preparation of the scheme. It was in this background, the impugned order records that no consent was given by the Department for such reliefs without which in view of Section 19 of the Act, the BIFR could not have given directions for tax waiver. In this context, the expression to consider has to be understood. The petitioner has not disputed the existence of the said letter dated 13.1.2012 or that the said letter did not contain the Department s objection to grant of the relief. Learned counsel for the petitioner me .....

X X X X X X X

Full Text of the Document

X X X X X X X

, thus, the Department was not willing to give any concession or tax waiver. It was, in this context that the Board noted that expression to consider has already been used. 14. This discussion and the context in which the said expression has been used, makes it abundantly clear that the scheme did not contain any mandate to the Income Tax Department to grant the tax concession requested by the petitioner company. Firstly, the Department had objected to any concession being granted. Secondly, before the Board, it was pointed out that without quantification, the Revenue would not be in a position to give any concession and thirdly, in this respect, the scheme envisaged only to consider the request for tax concession. We, therefore, cannot accept the contention of the petitioner that under the scheme, the direction was issued to the Income Tax Department to grant the benefit and that all that was left to be done was to compute the benefit. 15. Delhi High Court in case of CIMMCO Ltd (supra) was dealing with an entirely different situation. It was a case in which the sick company had requested for certain concessions from the Railway Authorities in the process of competing for tender fo .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||