MAHINDRA AND MAHINDRA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE Board for Industrial and Financial Reconstruction vide order dt. 26th Sept., 1994, made under s. 18(4) r/w S. 19(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), had sanctioned rehabilitation/amalgamation scheme for amalgamating Mahindra Nissan Allwyn Ltd. (MNAL) with Mahindra and Mahindra Ltd. Mahindra during the financial year 1993 -94 to the financial year 1996 -97. In terms of the order of the Board for Industrial and Financial Reconstruction dt. 26th Sept., 1994, the tax benefit under S. 72A of the INCOME TAX ACT, 1961, was restricted to Rs. 22.32 crores. The petitioner claims that it is entitled to a higher amount of tax benefit. By order dt. 29th Dec., 1995 (annexure G at p. 183), the Board for Industrial and Financial Reconstruction held that the case of the petitioner no longer requires to be dealt with under the Sick Industrial Companies (Special Provisions) Act and it is hereby formally closed. It further stated that the closure will not have any effect on the operation of the certificate dt. 21st Jan., 1995, issued by the Board for Industrial and Financial Reconstruction under S. 72A(2)(ii) of the IT Act, 1961. It appears that the petitioner in terms of its application dt. 29th Dec., 1995 (annexure F at p. 165), had sought certain modifications seeking removal of the ceiling of Rs. 22.32 crores on the benefit under S. 72A of the IT Act. This application is stated to have been sent by the petitioner to the Board for Industrial and Financial Reconstruction at Delhi from Bombay by post. It is claimed by the petitioner that it was received by the Board for industrial and Financial Reconstruction on 5th Jan., 1996. It seems that since the order as noticed above had already been made on 29th Dec., 1995, the Board for Industrial and Financial Reconstruction did not go into the aspects raised in the petitioner's application dt. 29th Dec., 1995. Subsequent applications seeking the modification of the aforesaid limit for benefit under S. 72A were also not entertained by the Board for Industrial and Financial Reconstruction. During the pendency of this petition, orders have been made by the AO as also by the CIT(A) in respect of the tax benefit under S. 72A of the IT Act. We, however, need not go into the correctness of the said orders in this petition. Learned counsel for the petitioner submits that for the present his client would be satisfied if, without prejudice to the rights and contentions of the petitioner, the Board for Industrial and Financial Reconstruction is directed to decide the matters raised in annexure F, dt. 29th Dec., 1995, without being influenced by order dt. 29th Dec., 1995. This seems to be a fair suggestion since it appears that the petitioner on account of the circumstances noticed above did not get appropriate opportunity to get adjudicated from the Board for Industrial and Financial Reconstruction, the matters raised in the application dt. 29th Dec., 1995.

(2.) UNDER the aforesaid circumstances, we direct the Board for Industrial and Financial Reconstruction to decide within two months the matters raised in the application (annexure F), dt. 29th Dec., 1995, without being influenced by the order dt. 29th Dec., 1995, without being influenced by the order dt. 29th Dec., 1995. In respect of the orders by the IT authorities, it would be open to the petitioner to approach the said authorities in accordance with law after the decision by the Board for Industrial and Financial Reconstruction in terms of this order. Till the matter is decided by the Board for Industrial and Financial Reconstruction, the IT authorities will not enforce the demand relating to exemption under S. 72A of the INCOME TAX ACT, 1961. The petition is disposed of in the above terms.