Delhi High Court
Director General Of Income Tax vs A.A.I.F.R. on 4 March, 2003
Equivalent citations: 2003 130 TAXMAN 251 Delhi
ORDER
This writ petition by the Director General of Income Tax (Admn.), New Delhi is directed against the order dated 17-11-2000, passed by the Appellate Authority for Industrial & Financial Reconstruction (hereinafter referred to as 'the AAIFR), dismissing petitioner's appeal against the order passed by the Board for Industrial & Financial Reconstruction (hereinafter referred to as 'the BIFR') on 9-7-1999 in Case No. 60/99, declaring M/s. Amitabh Bachchan Corpn. Ltd., respondent No. 3 herein, as a sick industrial company.
2. The main grievance of the petitioner before the AAIFR was that the BIFR has held the demand created by the Income Tax Department against respondent No. 3 as a contingent liability, without affording an opportunity of being heard, with the result that the Income Tax Department will not be in a position to recover its dues because these will not be treated as part of the liabilities of the company.
2. The main grievance of the petitioner before the AAIFR was that the BIFR has held the demand created by the Income Tax Department against respondent No. 3 as a contingent liability, without affording an opportunity of being heard, with the result that the Income Tax Department will not be in a position to recover its dues because these will not be treated as part of the liabilities of the company.
3. We have heard Mr. Sanjiv Khanna, learned senior standing counsel for the revenue and Dr. Debi Pal, learned senior counsel for respondent No. 3.
3. We have heard Mr. Sanjiv Khanna, learned senior standing counsel for the revenue and Dr. Debi Pal, learned senior counsel for respondent No. 3.
4. During the course of arguments, it is pointed out by Dr. Pal that the said respondent has already given an undertaking before the BIFR, which forms part of the summary record of the proceedings of bearing, held on 5-12-2002, which reads as under:
4. During the course of arguments, it is pointed out by Dr. Pal that the said respondent has already given an undertaking before the BIFR, which forms part of the summary record of the proceedings of bearing, held on 5-12-2002, which reads as under:
"The Bench recalled that at the hearing held on 9-7-1999, the Bench had declared the company M/s. Amitabh Bachchan Corpn. Ltd. (since re named A.B. Corpn. Ltd.) (hereinafter referred to as the "ABCL") a sick industrial company under section 3(1)(o) of the Sick Industrial Companies (Special Provisions)Act, 1985 (hereinafter referred to as the 'Act'), and had appointed IDBI as the Operating Agency (hereinafter referred to as the "OA"). A Draft Rehabilitation Scheme (hereinafter referred to as the "DRS") was circulated on 13-7-01, which was discussed at the hearing held on 16-10-2001. ABCL submitted that they had filed an appeal with the Tribunal against the order of Directorate of Income Tax , which was yet to be heard. Director of Income Tax submitted that Income-tax demand of Rs. 17.74 crores was outstanding but a provision of Rs. 6.58 lakhs only had been made towards income-tax liability. The Bench had noted that as the company had filed an appeal against the order of the DIT, the latter could not be asked to consider granting exemptions envisaged in the rehabilitation scheme. The company /promoters would undertake that in case the Tribunal did not allow the appeal filed by the company, they would make arrangements for payment of the dues as per the order of the Tribunal. The scheme was thereafter sanctioned on 22-4-02 providing for the Income Tax Department to consider granting reliefs to the company. Further, all liabilities not disclosed in the DRS were to be the personal responsibility of the promoters."
5. Learned counsel submits that in view of the said undertaking, respondent No. 3 is obliged to liquidate its liability towards the Income Tax Department as and when its appeal pending in the Tribunal is decided.
5. Learned counsel submits that in view of the said undertaking, respondent No. 3 is obliged to liquidate its liability towards the Income Tax Department as and when its appeal pending in the Tribunal is decided.
Learned counsel further states that the said respondent undertakes to this court also that as soon as the Tribunal decides the appeal of the company, demand if any, pursuant to the said order shall be paid forthwith, subject of course to the company taking recourse to any legal remedy which may be available to it in law and obtaining appropriate orders in those proceedings.
6. We feel that the afore-extracted portion of the summary record of the proceedings of the BIFR and the statement of learned counsel for respondent No. 3 before us adequately protects the interest of the revenue and the issue of non-grant of opportunity of being heard by the BIFR is rendered a mere academic exercise.
6. We feel that the afore-extracted portion of the summary record of the proceedings of the BIFR and the statement of learned counsel for respondent No. 3 before us adequately protects the interest of the revenue and the issue of non-grant of opportunity of being heard by the BIFR is rendered a mere academic exercise.
7. Resultantly, while taking on record the afore-noted statement of learned senior counsel for respondent No. 3, we dispose of the writ petition without expressing any opinion on the question of grant of opportunity to the Income Tax Department of being heard by the BIFR.
7. Resultantly, while taking on record the afore-noted statement of learned senior counsel for respondent No. 3, we dispose of the writ petition without expressing any opinion on the question of grant of opportunity to the Income Tax Department of being heard by the BIFR.
8. Learned counsel for the parties are agreed that they will approach the Income Tax Appellate Tribunal for getting the hearing in the appeal expedited.
8. Learned counsel for the parties are agreed that they will approach the Income Tax Appellate Tribunal for getting the hearing in the appeal expedited.
