Scheme of rehabilitation — Waiver of interest — Jurisdiction — Assessee-company

Lord Chloro Alkalies Ltd v Director General of Income Tax (Admn) and Anr,

Scheme of rehabilitation — Waiver of interest — Jurisdiction — Assessee-company was declared sick — BIFR directed winding up of company — During pendency of appeal, department preferred application claiming its income tax dues from assessee-company — BIFR circulated Draft Rehabilitation Scheme with broad acceptance of company's secured creditors–Income tax relief and concessions were provided to assessee in respect of interest on income tax liability — Revenue had argued that BIFR was not justified in scaling down interest–Department's appeal was allowed and order of BIFR was set aside — Held, in case of Aswini Kumar Ghosh & anr v Arabinda Bose & Anr in s 32 of SICA, specific exclusion of two enactments, and express reference to s 72A of IT Act , to say that provisions of SICA have to prevail over those of IT Act — In case of Mewar Sugar Mills Ltd v Chairman, Central Board of Direct Taxes & anr it was held that non obstinate clause contained in sub-s (1) of s 32 of SICA does not give SICA blanket overriding effect on all other laws — Overriding effect is given to provisions of SICA, rules or schemes made thereunder only to extent of inconsistency therewith contained in any other law excepting a few exceptions enumerated therein — It is for BIFR to form opinion while framing scheme of rehabilitation for sick industry whether exemption from operation of s 41 is required to be engrafted in scheme so as to secure object of rehabilitation and if so then to what extent — If BIFR may form opinion in favour of grant of such exemption then same amounts to "financial assistance" from central govt to extent of sick industry having been exempted from operation of s 41.