Commissioner of Income Tax vs BHEL

In this reference in respect of the assessment year 1974-75, the following questions of law have been referred for our opinion:

Whether on the facts and in the circumstances of the case, the order of the Government of India dated 27-3-1974 read with Section 396 of the Companies Act insofar as it provided that the losses of the amalgamated company shall form part of the losses of the amalgamated company was operative not only for the purpose of the company law also for the purposes of the Income Tax assessments of the amalgamated company excluding the specific provisions of the Income Tax Act, 1961 governing the carried forward and set off of unabsorbed depreciation ?

Whether on the facts and in the circumstances of the case, the corporate veil of the amalgamating company and the amalgamated company could be lifted to find whether the shareholders of the said two companies were the same and on that basis the Tribunal was right in holding that the two companies were not two separate assessees ?

Whether on the facts and in the circumstances of the case, the amalgamated company continued to exist after the amalgamation even though the Government''s order dated 27-3-1974 itself refers to it as the dissolved company and in law each company is a separate juridical person irrespective of its shareholders and more as for the purposes of the Income Tax Act ?

Initially, it was not very clear whether the revenue had obtained the approval of the Committee on Disputes to pursue this litigation. It was pointed out by learned Counsel for the assessee that the following item was placed for consideration before the Committee on Disputes -

Item No. 26

M/s. BHEL

Appeal in the High Court, regarding disallowance of entertainment expenses allowances WDV of BHEL asset without deduction of unabsorbed depreciation for the assessment year1974-75.

0.00

279/104/94-II 01/09/94

Deptt. of Revenue, CBDT

.

The Committee, having regard to the fact that there was a substantial question of law involved in the dispute, permitted department of revenue (CBDT) to pursue the appeal in the High Court."

The above approval granted by the Committee on Disputes does not pertain to any of the questions that have been referred for our opinion.

On 19-11 -2007, learned Counsel for the revenue sought sometime to look into the matter but she has not been able to show us that the approval of the Committee on Disputes has been taken to pursue this reference in respect of three questions that have been referred to us.

Under the circumstances, since no approval has been obtained from the Committee on Disputes, we return this reference unanswered.