Accordingly Quashed And Set Aside v. Joint Commissioner Of Income-Tax(Assessment) (Supra) Has Observed In The Said Judgment Thus

IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NOS. 89 AND 90 OF 2016 M/s. Teracom LimitedPlot no. 249-250,Kundaim Industrial Estate, Kundaim,Goa, 403 115. ...…Petitioner V e r s u s 1.The Asst. Commissioner of Income TaxCircle 2(1), Panaji,having office at Ayakar Bhavan,Patto Plaza, EDC Complex.Panaji, Goa.Circle 2(1), Panaji,having office at Ayakar Bhavan,Patto Plaza, EDC Complex.Panaji, Goa. 2.The Commissioner of Income Tax,having office at Aayakar Bahawan,EDC Complex, Patto Plaza,Panaji, Goa.…Respondents Mr. S. R. Rivankar and Mr. Rama Rivankar, Advocates for the Petitioner. Ms. Asha Desai, Advocate for the Respondents. Coram :-F. M. REIS, K. L. WADANE, JJ.rdDate : 3 February, 2016 ORAL JUDGMENT (Per F. M. Reis, J.) Both the above Petitions are taken up together as it was not disputedthat the points raised therein are similar. 2. Heard Shri S. R. Rivankar, learned Counsel appearing for thePetitioners and Ms. Asha Desai, learned Counsel appearing for the Respondents. 3. Rule. Heard forthwith with the consent of the learned Counsel.Learned Counsel appearing for the Respondents, waives service. 4. Upon hearing Shri Rivankar, learned Counsel appearing for thePetitioners and Ms. Desai, learned Counsel appearing for the Respondents, withoutgoing into the contentions on merits, the short point which comes for considerationis whether the demand notices dated 07.12.2015 and 14.12.2015 issued by theAssessing Officers under Section 226(3) of the Income Tax Act, 1961, can takeeffect without obtaining the consent in terms of Section 22 of the Sick IndustrialCompanies Act, 1985 (SICA). 5. Shri Rivankar, learned Counsel appearing for the Petitioners haspointed out that admittedly, the application of the Petitioners to be declared as aSICA unit has been registered on 12.01.2015 and the subject demand was issuedby the Assessing Officer only in December, 2015. Learned Counsel has thereaftertaken us through the provisions of Section 22 of the said Act to point out that evenfor recovery under the Income Tax Act, no coercive action can be taken against thePetitioners without obtaining the permission from the Board for Industrial andFinancial Reconstruction(BIFR) in terms of the SICA Act. Learned Counsel furtherpointed out that in the present case, no such permission has been obtained and, assuch, the impugned demand cannot be sustained. In support of his submission,the learned Counsel has relied upon the Judgment of the Gujarat High Courtreported in (2004) 269 ITR 548 (Guj) in the case of Ezy Slide Fastners Ltd vs.Joint Commissioner of Income-tax (Assessment). Learned Counsel as suchpointed out that the impugned demands dated 07.12.2015 and 14.12.2015 be accordingly quashed and set aside. 6. On the other hand, Ms. Asha Desai, learned Counsel appearing forthe Respondents, has pointed out that the Respondents are entitled to recoversuch amounts and the Petitioners have an alternate remedy to challenge theimpugned Demands before the Commissioner of Income Tax. Learned Counselfurther pointed out that the Assessing Officer learnt that the Petitioners were beingregistered as a sick unit only recently and the authorities will take necessaryconsent in terms of Section 22 of the SICA Act. Learned Counsel as such pointedout that the Petitions be rejected. accordingly quashed and set aside. 6. On the other hand, Ms. Asha Desai, learned Counsel appearing forthe Respondents, has pointed out that the Respondents are entitled to recoversuch amounts and the Petitioners have an alternate remedy to challenge theimpugned Demands before the Commissioner of Income Tax. Learned Counselfurther pointed out that the Assessing Officer learnt that the Petitioners were beingregistered as a sick unit only recently and the authorities will take necessaryconsent in terms of Section 22 of the SICA Act. Learned Counsel as such pointedout that the Petitions be rejected. 7. We have considered the submissions of the learned Counsel and wehave also gone through the records. On plain reading of the provisions of Section22 of the SICA, it cannot be disputed that even coercive action to recover the duesin terms of the Income Tax Act would require the consent from BIFR in terms of thesaid Act as an inquiry under Section 16 of the SICA is pending. The learnedCounsel appearing for the Respondents also does not dispute that theRespondents would take steps to obtain such consent. The Gujarat High Court inthe case of Ezy Slide Fastners Ltd vs. Joint Commissioner of Income-tax(Assessment) (supra) has observed in the said Judgment thus : “In Gram Panchayat v. Shree Vallabh Glass Works LimitedMANU/SC/0188/1990: [1990]1SCR966 and in Tata DavyLtd, MANU/SC/1256/1997 : (1997)IILLJ989SC the hon'bleSupreme Court has held that arrears of taxes and the likedues from sick industrial companies that satisfy theconditions set out in Section 22(1) of the SICA cannot berecovered by coercive process unless the said BIFR gives its consent thereto. That is what the respondents can do inthe instant case also, i.e., the respondents can obtainconsent from the BIFR for recovery that they propose tomake. In view of the above discussion, we grant interim reliefrestraining the respondent-authorities from acting upon theimpugned notice dated October 20, 2000 (annexure A),and also restraining the respondent authorities fromenforcing any notice under Section 226(3) of the IncomeTax Act, 1961, without first obtaining consent of the BIFRas provided in Section 22(1) of the Sick IndustrialCompanies (Special Provisions) Act, 1985.” 8. Taking note of the said observations and the Judgment of the ApexCourt referred to therein, it cannot be disputed that without obtaining consent interms of Section 22 of the SICA Act, the Assessing Officer cannot implement theimpugned Demands dated 07.12.2015 and 14.12.2015. 9. In such circumstances, we find that the above Petitions can bedisposed of by holding that the impugned demands dated 07.12.2015 and14.12.2015 would be implemented by the Respondents upon obtaining therequisite consent in terms of Section 22 of the SICA Act. 10. With the above directions, Rule stands disposed of. Liberty to theparties to apply. arp/* K. L. WADANE, J. F. M. REIS, J.