AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 612
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.... SICA. The proceedings before the BIFR were heard from time to time. In October 2006, IDBI formulated Draft Rehabilitation Scheme. A joint meeting of the stakeholders was convened on 26.11.2009. IDBI had prepared background notes for such joint meeting in which in connection with the income tax waivers, following 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....
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....assessment years 1999-2000 to 2002-2003 totaling to Rs. 9.32 Crores (rounded off) beyond the statutory period. Under communication dated 17.4.2017, the CBDT refused to accept such request for which following reasons were cited:- "11. The relief from the revenue is allowed as a last resort. That is why the relief is kept 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 Rs. 591.23 lacs from Rs. 107.43 lacs in the corresponding period of 2015. Recognizing this turnaround in business, the share price of company re....
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....e of CIT Vs. Tube Investments of India Ltd. (2012) 341 ITR 199 (Mad). Learned counsel submitted that the entire philosophy beyond the SICA is that all stakeholders should make sacrifice so that a company which is sick, can be revived. This would be in the interest of labour as well as the lending 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....
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....ection 19, such scheme shall be circulated to provide financial assistance for the consent within 60 days from the date of circulation or within such extended period as the Board may allow. Sub-section (3) of Section 19 provides that where in respect of any scheme, the consent under sub-section (2) is given 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 ....
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....to claim such benefits if in future, the Government policy changes. On the other hand, in the context of income tax waiver, the Department contended that the company has not quantified the tax liability and therefore, the relief can be considered only after the details are received from the company. Without quantification, 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 t....