SANJAY SOMANY Vs. UNION OF INDIA

JUDGEMENT

(1.) Challenging the orders passed under Sec. 264 of the Income Tax Act, 1961 (hereinafter referred to as 'the said Act') in respect of the assessment years 2016-2017, 2017-18 and 2018-19 all dtd. 29/3/2021, the instant writ petitions have been filed. To consider the scope of the challenge, it is necessary to note down the facts giving rise to the same.

(2.) It is the petitioner's case that while he was Vice-Chairman and Managing Director of Hindustan National Glass and Industries Limited (hereinafter referred to as the "said Company") which is a public company and an existing company within the meaning of Companies Act, 2013 (hereinafter referred to as 'the Companies Act') by a special resolution of the members of the company passed on 30/3/2015, the petitioner was reappointed as the Vice-Chairman and Managing Director of the said company for a period of three years w.e.f. 1/4/2015 at a salary of Rs.16,67,500.00 per month with an annual increment with the limit of 15% of the salary last drawn subject to the condition that such increase is in compliance with the provisions of Ss. 196, 197, 203 read with Schedule V and other applicable provision of the Companies Act.

(3.) According to the petitioner, by reasons of absence/inadequacy of profits on 25/5/2015, an application was made by the said company to the Central Government in terms of Ss. 196 and 197 read with Schedule V of the Companies Act seeking approval for payment of the aforesaid higher remuneration to the petitioner. Initially, the Central Government vide its communication dtd. 30/5/2016 informed that the total remuneration of the petitioner should be Rs.18,00,000.00 per annum for a period of three years without any annual increment as the said company had not furnished no objection certificate in favour of the proposal from all its lenders to whom it had allegedly made default in payment of debt. To remove the above short coming the company subsequently obtained no objection certificate from the lead banker and had filed another application with the Central Government on 16/2/2017 incorporating such no objection. Unfortunately, the Central Government required the petitioner to furnish 'no objection certificate' from HSBC Bank as well.