Full Judgment
1. The Board for Industrial and Financial Reconstruction vide order dated September 26, 1994, made under Section 18(4) read with Section 19(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), had sanctioned rehabilitation/amalgamation scheme for amalgamating Mahinra Nissan Allwyn Limited (MNAL) with Mahindra and Mahindra Ltd. Under the scheme, certain amounts were to be spent by Mahindra and Mahindra during the financial year 1993-94 to the financial year 1996-97. In terms of the order of the Board for Industrial and Financial Reconstruction dated September 26, 1994, the tax benefit under Section 72A of the Income-tax Act, 1961, was restricted to Rs. 22.32 crores. The petitioner claims that it is entitled to a higher amount of tax benefit. By order dated December 29, 1995 (annexure G at page 183), the Board for Industrial and Financial Reconstruction held that the case of the petitioner no longer requires to be dealt with under the Sick Industrial Companies (Special Provisions) Act and it is hereby formally closed. It further stated that the closure will not have any effect on the operation of the certificate dated June 21, 1995, issued by the Board for Industrial and Financial Reconstruction under Section 72A(2)(ii) of the Income-tax Act, 1961. It appears that the petitioner in terms of its application dated December 29, 1995 (annexure F at page 165), had sought certain modifications seeking removal of the ceiling of Rs. 22.32 crores on the benefit under Section 72A of the Income-tax Act. This application is stated to have been sent by the petitioner to the Board for Industrial and Financial Reconstruction at Delhi from Bombay by post. It is claimed by the petitioner that it was received by the Board for Industrial and Financial Reconstruction on January 3, 1996. It seems that since the order as noticed above had already been made on December 29, 1995, the Board for Industrial and Financial Reconstruction did not go into the aspects raised in the petitioner's application dated December 29, 1995. Subsequent applications seeking the modification of the aforesaid limit for benefit under Section 72A were also not entertained by the Board for Industrial and Financial Reconstruction. During the pendency of this petition, orders have been made by the Assessing Officer as also by the Commissioner of Income-tax (Appeals) in respect of the tax benefit under Section 72A of the Income-tax Act. We, however, need not go into the correctness of the said orders in this petition. Learned counsel for the petitioner submits that for the present his client would be satisfied if, without prejudice to the rights and contentions of the petitioner, the Board for Industrial and Financial Reconstruction is directed to decide the matters raised in annexure F, dated December 29, 1995, without being influenced by order dated December 29, 1995. This seems to be a fair suggestion since it appears that the petitioner on account of the circumstances noticed above did not get appropriate opportunity to get adjudicated from the Board for Industrial and Financial Reconstruction, the matters raised in the application dated December 29, 1995.
2. Under the aforesaid circumstances, we direct the Board for Industrial and Financial Reconstruction to decide within two months the matters raised in the application (annexure F), dated December 29, 1995, without being influenced by the order dated December 29, 1995. In respect of the orders by the income-tax authorities it would be open to the petitioner to approach the said authorities in accordance with law after the decision by the Board for Industrial and Financial Reconstruction in terms of this order. Till the matter is decided by the Board for Industrial and Financial Reconstruction, the income-tax authorities will not enforce the demand relating to exemption under Section 72A of the Income-tax Act, 1961.
3. The petition is disposed of in the above terms.