INDUSTRIAL CABLES (INDIA) LIMITED Vs. CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, NEW DELHI AND ORS.

JUDGEMENT

(1.) The petitioner has filed this petition challenging communication dated 25.08.2014 (Annexure P-9) from Directorate of Income Tax (Recovery) rejecting the prayer of the petitioner for grant of concession in terms of the Scheme dated 13.05.2004 sanctioned by the Board of Industrial and Financial Reconstruction (here-in-after called 'BIFR'). Learned counsel for the petitioner raised brief argument that the rejection of the claim of the petitioner is merely on the ground that the net worth of the petitioner company had become positive as on 31.03.2006 and the scheme sanctioned by BIFR vide its order dated 13.5.2004 had expired on 31.10.2006 hence, Income Tax reliefs cannot be processed. While referring to the judgment of Delhi High Court titled as Director General of Income Tax (Admn.) and another, New Delhi v. Board of Industrial and Financial Reconstruction, New Delhi and others, in WP(C) Nos. 1940, 1942, 1943, 1945, 1946, 1948-1958 of 2011 decided on 23.03.2011 it is submitted that the issue was raised by the department by challenging various orders passed by BIFR, without taking recourse to remedy of appeal available under Section 25 of the Sick Industrial Companies (Special Provisions) Act, 1985 on the ground that where sick industrial company's net worth becomes positive, it would entitle the Department to withdraw the concessions which form part of a sanctioned scheme. The order passed even in the case of petitioner company was also challenged by the department. It was subject matter of WP(.C) Nos. 1940 of 2011. The writ petition was dismissed on 23.03.2011 holding that the Department cannot resile from the concessions made at the stage when the scheme was formulated and sanctioned merely because the net worth of the company at a later stage had turned positive.

(2.) Special Leave to Appeal (Civil) filed by the department against the judgment dated 23.03.2011 passed by Delhi High Court was also dismissed by Hon'ble Supreme Court of India on 27.04.2012. Hence, the rejection of the claim of the petitioner only on the ground that the net worth of the petitioner company having turned positive, the concession as envisaged in the scheme cannot be granted, cannot be legally sustained and the matter deserves to be remitted back to the competent authority to be decided afresh.

(3.) On the other hand, learned counsel for the respondents raised issue regarding entitlement of benefits upto the date the scheme was applicable. He could not dispute the fact that the entitlement of the concessions granted to sick industrial company on its net worth becoming positive was decided against the department by Delhi High Court and the appeal of the department was dismissed by Hon'ble Supreme Court. It was held therein that the concession cannot be denied merely on the ground that the net worth of the company became positive after the scheme was sanctioned.