Chattisgarh High Court
The Chhattisgarh State Power Holding ... vs Union Of India on 15 June, 2012
Author: Sunil Kumar Sinha
Bench: Sunil Kumar Sinha
HIGH COURT OF CHATTISGARH BILASPUR
W P T No 5723 of 2007
The Chhattisgarh State Power Holding Company Limited
...Petitioners
Versus
1 Union of India
2 The Chief Commissioner of Income Tax Raipur
3 The Assistant Commissioner of Income Tax
...Respondnets
! Mr Ravi Shankar Prasad Sr Advocate with Mrs Suparna Shrivastava Mr P S Koshy and Mr Sumesh Bajaj Advocates for the p
^ Mrs Fouzia Mirza Assistant Solicitor General for Union of India Mr Rohit Arya Sr Advocate with Mr Rajeev Shrivastava
* CORAM: Honble Shri Sunil Kumar Sinha & Honble Shri Radhe Shyam Sharma JJ
% Dated: 15/06/2012
: Judgement
JUDGMENT
(15.06.2012) (Writ Petition Under Article 226 read with Article 227 of the Constitution of India) Following judgment of the Court was delivered by Sunil Kumar Sinha, J.
(1) Reorganization of the erstwhile State of Madhya Pradesh took place on 1.11.2000 in terms of M.P. Reorganization Act, 2000 (hereinafter referred to as the `Act 2000' or `2000 Act') and the two successor States namely Madhya Pradesh and Chhattisgarh were created. (2) On account of provisions of Section 58 of the 2000 Act, the State of Chhattisgarh constituted its own State Electricity Board on 15.11.2000 known as Chhattisgarh State Electricity Board (CSEB - original writ petitioner) which later on was succeeded by the Chhattisgarh State Power Holding Company Limited (substituted petitioner w.e.f. 20.1.2010). The State of Madhya Pradesh also constituted a new Board, known as Madhya Pradesh State Electricity Board (MPSEB), on 1.1.2001. On the event of creation of new Boards, distribution of assets and liabilities had to take place under the provisions of 2000 Act. Section 58 (3) of 2000 Act provides that on dissolution of the earlier Board (MPEB), its assets, rights and liabilities were to be apportioned between the successor States Madhya Pradesh and Chhattisgarh in such manner as may be agreed upon between them within one year of the dissolution of the earlier Board, or if no agreement is reached, in such manner as the Central Government may, by order, determine. Clause (b) of sub-section (4) of Section 58 further provides that any assets, rights and liabilities which would otherwise have passed to the successor States by or under the provisions of sub-section (3) shall pass to the new Boards. (3) Section 65 of 2000 Act deals with special provisions as to income-tax. It provides that where the assets, rights and liabilities of any body corporate carrying on any business are, under the provisions of this Part (Part-VII), transferred to any other bodies corporate which after the transfer carry on the same business, the losses or profits or gains sustained by the body corporate first mentioned which, but for such transfer, would have been allowed to be carried forward and set off in accordance with the provisions of Chapter VI of the Income-tax Act, 1961 (I.T. Act), shall be apportioned amongst the transferee bodies corporate in accordance with the rules to be made by the Central Government in this behalf and, upon such apportionment, the share of loss allotted to each transferee body corporate shall be dealt within accordance with the provisions of Chapter VI of the I.T. Act, as if the transferee body corporate had itself sustained such loss in a business carried on by it in the years in which these losses were sustained.
(4) The undivided Electricity Board (MPEB) sustained losses in relevant Financial Years 1999-2000 and 2000-2001. The losses sustained in the above Financial Years, as per tax-returns of the MPEB, were to the extent of Rs.1,422.46 crores and Rs.993.65 crores respectively. The MPEB filed its returns for the Assessment Years (AYs) 2000-2001 and 2001-2002 (For the above relevant Financial Years) on 28.3.2002 and 7.4.2003. The due dates for filing the returns were 30.11.2000 and 31.10.2001. Thus the returns filed by the MPEB for the Assessment Years 2000-2001 and 2001-2002 were filed beyond the prescribed due dates of 30.11.2000 and 31.10.2001.
(5) The petitioner filed its returns for the Assessment Years (AYs) 2002-2003 and 2003-2004 on 29.6.2006. In these returns, the petitioner claimed set-off of losses of Rs.306.36 crores in the AY 2002-2003 and Rs.248.60 crores in the AY 2003-2004. The Assessing Authority disallowed the above claim of set-off of losses holding that share of brought forward loss claimed by the petitioner, pertained to losses incurred by MPEB in the AYs 2000-2001 and 2001- 2002 and for these Years, MPEB had filed its returns not in time as per provisions of Sections 139 (3) and 139 (1) of the I.T. Act, 1961. The set-off of losses were denied to the petitioner on account of delayed filing of the returns of losses by the MPEB.
(6) The petitioner then moved an application/representation to the Central Board of Direct Taxes (CBDT) u/s 119 of the I.T. Act to condone the delay in filing the return of income by MPEB so that the petitioner could claim its share of losses as set-off against its income. The petitioner also moved an application u/s 65 of 2000 Act to the Central Government to frame Rules for apportionment of losses of MPEB. A reminder was also sent to the CBDT and Central Government was also persuaded, but when no steps were taken in regard to disposal of the above applications/ representations or framing of the Rules u/s 65 of the 2000 Act, the petitioner had to file this writ petition for issuance of mandamus to the concerned authorities; and to allow claim of set-off of carry forward of losses of Rs.306.36 crores in AY 2002-2003 and Rs.248.60 crores in AY 2003-2004 against income of the respective Years.
(7) Mr. Ravi Shankar Prasad, learned Senior Counsel appearing on behalf of the petitioner, has argued that CBDT has ample power under the I.T. Act, 1961 to condone the delay in filing the return and to mitigate the cases of genuine hardship. The case of the petitioner is one of genuine hardship, therefore, the delay may be condoned here or CBDT may be directed to issue appropriate directions to condone the delay in filing the returns by MPEB and by the petitioner by deciding the representations made in that behalf.
(8) Mr. Rohit Arya, learned Senior Counsel appearing on behalf of the Revenues, has vehemently opposed these arguments. He, inter alia, contended that no right is conferred upon the petitioner to make any representation for condonation of delay in filing the return either by MPEB or by the petitioner itself; there is no corresponding obligation much less statutory duty cast on the CBDT to decide the representation; it is not a case of genuine hardship, therefore, mandamus, as prayed for, cannot be issued.
(9) Having heard learned counsel for the parties at length, we have perused the records.
(10) Sub-section (1) of Section 119 of the I.T. Act provides that the Board may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board. A proviso has been added to sub-section (1) which imposes certain restrictions and says that no such orders/instructions or directions shall be issued- (a) so as to require any income-tax authority to make particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Commissioner (Appeals) in the exercise of his appellate functions. Sub-section (2) of Section 119 further provides that without prejudice to the generality of the foregoing powers,- (a) the Board may, if it considers it necessary or expedient so to do, for the purpose of proper and efficient management of the work of assessment and collection of the revenue, issue, from time to time (whether by way of relaxation of any of the provisions of sections 115P, 115S, 115WD, 115WE, 115WF, 115WG, 115WH, 115WJ, 115WK, 139, 143, 144, 147, 148, 154, 155,158BFA, sub-section (1A) of section 201, sections 210, 211, 234A, 234B, 234C, 271 and 273 or otherwise), general or special orders in respect of any class of incomes or fringe benefits or class of cases, setting forth directions or instructions (not being prejudicial to assessee) as to the guidelines, principles or procedures to be followed by other income-tax authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties and any such order may, if the Board is of opinion that it is necessary in the public interest so to do, be published and circulated in the prescribed manner for general information. (b) The Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general of special order, authorize any income-tax authority, not being a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law.
(11) Mr. Arya has contended that, since Section 80 has not been included in Clause (a) of sub-section (2) like other sections and it also does not fall in the Chapters contained in Clause (c) of sub-section (2) of Section 119, the Board cannot issue any direction to condone the delay in filing the returns of losses. If we look into the scheme of Section 119, it is divided into two parts i.e. sub- section (1) and sub-section (2). Sub-section (1) deals with the issuance of general orders or instructions and directions to the concerned sub-ordinate authorities with two riders in its proviso which makes it clear that the general power vested in the Board under Section 119 are not unlimited and in the above two circumstances, the general power cannot be exercised. The above restrictions appear to be based on the logic that the Board is not supposed to interfere with the functioning of the quasi judicial authorities mentioned in proviso (a) and (b) because while conducting proceedings they have to discharge their duties strictly in accordance with the provisions of the Act. Sub- section (2) of Section 119 opens with the words like "without prejudice to the generality of the foregoing powers". This makes it clear that the powers conferred to the Board under sub-section (2) are special powers, in addition to the powers conferred under sub-section (1), which the Board may exercise in suitable circumstances. The word like "may" use in each of the Clauses of sub-section (2) makes it clear that the special powers, which are in addition to the powers vested under sub-section (1), are of discretionary nature.
(12) In various statutes words like `may'; `it shall be lawful'; `shall have power' are generally used. These words are enabling words and they only confer capacity, power or authority and imply a discretion. They are used in a statute to indicate that something may be done which prior to it could not be done. The word `may' used in any statute gives a power to the authority and then it may be a question, in what cases, when any authority or body has a power given it by the word `may', it becomes its duty to exercise that power. There may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person or the authority or body in whom the power is reposed to exercise that power when called upon to do so. Where a power is deposited with a public officer for the purpose of being used for the benefit of persons specifically pointed out with regard to whom a definition is supplied by the Legislature of the conditions upon which they are entitled to call for its exercise, that power ought to be exercised and the Court will require it to be exercised. (Please see- Principles of Statutory Interpretation by Justice G.P. Singh, Sixth Edition 1996, pp.284 & 285 ).
(13) The language of Clause (b) of sub-section (2) would make it clear that the power under Clause (b) of sub- section (2) is wide enough to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law. It was argued by Mr. Arya that the returns of losses have not been included in Section 119 (2) (b). In Associated Electro Ceramics -Vs- Chairman, Central Board of Direct Taxes and Another, (1993) 201 ITR 501 (Kart), it was held that even proceeding on the basis that the said provision covers only a claim or an application, it could be seen that the claim raised in a return that its losses should be carried forward is also a claim, and that such a request cannot be rejected merely on the ground that it is only made in a return and not by a separate application. Therefore, the request made by the petitioner does fall within the scope of the expression "claim". It was further held that though it is not a claim regarding exemption or deduction or refund referred to in section 119 (2) (b), it is definitely relatable to a claim arising under the category of any relief available under the Act. Mr. Arya has argued that the above judgment is per incuriam and the same cannot be pressed into motion by the petitioner. We are unable to accept the said argument advanced by Mr. Arya. After passing of the aforesaid judgment, circular No. 8/2001 dated 16.5.2001 (Annexure-P/7 at page 160 of paper-book) was issued by the CBDT, and in the said circular, referring to the above judgment, the Board admitted vide Para-3 that the department did not file special leave petition against this judgment/order and subsequently the matter was taken up with Ministry of Law who also agreed with the view that the Board had power to condone the delay in filing the return u/s 119 (2) (b) of the I.T. Act, 1961, in a case having claim of carry forward of losses. When the Board itself relied on the said judgment and issued a circular in the public interest, how the counsel for the Revenues can argue that the above judgment/order was per incuriam. Therefore this contention has to be rejected. Mr. Arya has also argued, referring to para-5 of the above circular, that condonation of delay is subject to the term that other conditions are satisfied. This is not an issue before us at least at this stage. Presently we are considering about the jurisdiction of the Board u/s 119 (2) (b) to condone the delay. If the Board itself has issued the circular No. 8/2001on 16.5.2001 making clear insertion that it has power to condone the delay not only in making refund claims, but also in claim for carry forward of losses, nothing remains for raising a dispute that the Board has no such power in cases of returns of carry forward of losses and its power is only limited for exemption, deduction and refund. (14) The CBDT is the highest authority in hierarchy as per Section 116 of the I.T. Act. It has been given power to condone the delay u/s 119 (2) (b). The language of this part of enactment which begins with the words like without prejudice to the generality of the powers conferred under sub-section (1), and further the words used like any other relief in Clause (b) of sub-section (2) and placement of Clause (b) in the second part in sub-section (2) after riders of sub-section (1) further makes it clear that the above provisions of Clause (b) in which the Board has been given enabling power to avoid genuine hardship is based on public policy and the idea behind it appears to facilitate a tax payer who on account of genuine hardship could not make an application or claim for exemption, deduction, refund or any other relief under the Act including that of the filing of the return of losses in time.
(15) Mr. Arya has next contended that Clause (c) of sub- section (2) says about the two Chapters only, namely Chapter-IV and VI-A. Section 80 dealing with the submission of return of losses does not fall in either of the Chapters, therefore, even on account of genuine hardship the delay in filing the return of losses cannot be condoned. We are unable to accept the said argument. We have already discussed the scheme of Section 119 with different powers conferred under sub-section (2). A bare reading of the three Clauses i.e. Clauses (a), (b) and (c) of sub-section (2) would show that they are independent enabling Clauses and they operate in different fields. While Clauses (a) and (c) would operate in fields of Sections/Chapters mentioned therein and the instances covered thereunder, Clause (b) would apply to the application or claim for any exemption, deduction, refund or any other relief under this Act including that of filing returns of losses which we have already held. The Legislature in all its wisdom has not mentioned any particular Section or Chapter of the Act in Clause (b) for its application and the under lying principle behind it is to avoid genuine hardship. We are of the view that in the above scheme of Section 119 the provisions of Clauses (a) and (c) of sub-section (2) would never obliterate or come in the way of the independent provisions of Clause (b) which the highest statutory body (CBDT) has to exercise in cases of genuine hardship.
(16) It was stated at Bar that CBDT has already condoned the delay at the instance of MPSEB so far as Assessment Year (AY) 2001-2002 is concerned, and had refused to condone the delay for Assessment Years (AYs) 2000-2001 and 2002-2003, and two writ petitions were filed in M.P. High Court against the order passed by the CBDT on 18.12.2008. The CBDT, in the above matters did not take the stand of lack of its jurisdiction. Neither the counsel appearing on behalf of the Revenues raised this objection before the writ court which ultimately passed its common order dated 4.1.2011 in W.P. Nos. 6846/2009 and 6847/2009 and set-aside the impugned order passed by the CBDT with a direction to consider the case of the MPSEB in line of genuine hardship. (17) In light of the above discussions it is apparent that the CBDT has ample power to condone the delay in filing of the late returns and provisions of Section 80 or Section 139 (3) of the Act 1961 shall not come in the way of exercising such power by the CBDT and we hold it accordingly.
(18) Now we shall consider the arguments relating to genuine hardship.
(19) In B.M. Malani -Vs- Commissioner of Income Tax and Another, (2008) 10 SCC 617, the Supreme Court, deliberating on the genuine hardship in a tax matter, held as under in Paras - 16 to 18:-
"16. The term "genuine" as per the New Collins Concise English Dictionary is defined as under:
" `Genuine' means not fake or counterfeit, real, not pretending (not bogus or merely a ruse)".
17. For interpretation of the aforementioned provision, the principle of purposive construction should be resorted to. Levy of interest although is statutory in nature, inter alia, for recompensating the Revenue from loss suffered by non-deposit of tax by the assessee within the time specified therefor. The said principle should also be applied for the purpose of determining as to whether any hardship had been caused or not. A genuine hardship would, inter alia, mean a genuine difficulty. That per se would not lead to a conclusion that a person having large assets would never be in difficulty as he can sell those assets and pay the amount of interest levied.
18. The ingredients of genuine hardship must be determined keeping in view the dictionary meaning thereof and the legal conspectus attending thereto. For the said purpose, another well-known principle, namely, a person cannot take advantage of his own wrong, may also have to be borne in mind. The said principle, it is conceded, has not been applied by the courts below in this case, but we may take note of a few precedents operating in the filed to highlight the aforementioned proposition of law. (See - Priyanka Overseas (P) Ltd. -Vs- Union of India, 1991 Supp (1) SCC 102 (SCC at pp. 122-23, para 39) ; Union of India
-Vs- Major General Madan Lal Yadav (Retd.), (1996) 4 SCC 127 (SCC at p. 142, paras 28-29) ; Ashok Kapil -Vs- Sana Ullah, (1996) 6 SCC 342 (SCC at p. 345, para 7) ; Sushil Kumar -Vs- Rakesh Kumar, (2003) 8 SCC 673 (SCC at p. 692, para 65, first sentence) ; Kusheshwar Prasad Singh -Vs- State of Bihar, (2007) 11 SCC 447 (SCC at pp. 451-52, paras 13-14 and 16)."
(20) Question of existence of genuine hardship is essentially a question of fact which has to be determined in light of the prevailing facts and circumstances of each case. As stated in B.M. Malani (Supra), the ingredients of genuine hardship must be determined keeping in view the dictionary meaning thereof and the legal conspectus attending thereto; and the principle that a person cannot take advantage of his own wrong, may also have to be born in mind.
(21) The material placed before us showing genuine hardship are related to the fact of non-finalization of division of assets and liabilities of the MPEB for a long period. We would like to mention few important facts, highlighted by the petitioner in this regard. The Central Government was informed about the formation of the new boards and a request was made to issue necessary direction under Section 58 (4) of the 2000 Act, enabling the new boards to take over assets and liabilities of the MPEB. The two States could not arrive at a material agreement on the division of assets and liabilities of the MPEB. The Central Government issued a notification dated 12.04.2001 and guidelines relating to division of assets, rights, liabilities, contracts and employees as also for arrangement for distribution of power were laid down in the notification. Thereafter, the State of M.P. made a representation to the Central Government for modification of the said notification in regard to the basis of apportionment of assets and liabilities. Then a writ petition was filed by MPSEB before the High Court of Delhi for the remittance of revenues illegally retained by the CSEB for the period 01.12.2000 to 14.04.2001. Provisionally, apportionment of assets and liabilities were confirmed by the Central Government by letter dated 04.12.2001. The State of C.G. filed a writ petition before this High Court against the two orders passed by the Central Government dated 12.04.2001 and 04.12.2001. The MPSEB filed an application for transfer of the said writ petition to the High Court of Delhi, which was allowed. The Central Government then issued an order dated 23.05.2003 under Section 58(4) of the Act 2000 provisionally allocating various liabilities of the erstwhile Board to the newly constituted Boards. The said order was questioned by CSEB before the High Court of Delhi. We gather from the facts mentioned in M.P. State Electricity Board -Vs- Union of India and Others, (2006) 10 SCC 736 that during the Course of hearing before the High Court of Delhi, the Union of India suggested that the dispute between the parties should be resolved by passing a final order by it upon giving an opportunity of hearing on all the issues raised by the parties in the said writ petition. The said suggestion was accepted by the High Court. Pursuant to the said representation before the High Court, on 02.11.2004, the Central Government issued a notification fixing 15.11.2000 as the date of dissolution of the erstwhile Board. It was further provided in the notification that the erstwhile board would remain functional within the State of M.P. up to 31.12.2000. Thereafter, a further notification was issued on 04.11.2004 in regard to apportionment of assets, rights and liabilities of the erstwhile Board between the petitioner and MPSEB. The MPSEB then filed the above writ petition before the Supreme Court and, inter-alia, questioned the validity of notifications dated 02.11.2004 and 04.11.2004. Infact a relief of quashment of the above notifications dated 02.11.2004 and 04.11.2004 was made by the MPSEB, which came to be decided on 13.09.2006.
(22) Mr. Prasad has argued that when the validity of the above notifications were challenged by the MPSEB and the matter remained pending up to the said date, nothing was final throughout in between this period and the CSEB always remained in dilemma regarding the apportionment of the liabilities including the losses sustained by the MPEB in the relevant financial years and for all these reasons, the returns could not be filed in time. Infact he argued that on the above grounds there was genuine hardship existing before the Boards to not file returns in time. (23) We are conscious that the application/representation filed by the CSEB has not been disposed of by the CBDT till date and a decision is yet to be arrived at. CBDT is the statutory authority to take a decision in this regard after recording a finding in relation to the ground of existence of genuine hardship before the assesses. We, therefore, do not deem it appropriate to record a finding in this regard in this writ petition, which we leave on CBDT to record and take a decision.
(24) Much has been argued regarding the principles relating to issuance of mandamus. Many judgments have been referred. We shall quote a few of them for the sake of principles. (25) In Oriental Bank of Commerce -Vs- Sunder Lal Jain And Another, (2008) 2 SCC 280, the Supreme Court observed in para 11 :-
11. The principles on which a writ of mandamus can be issued have been stated as under in The Law of Extraordinary Legal Remedies by F.G. Ferris and F.G. Ferris, Jr:
"Note 187.- Mandamus at common law, is a highly prerogative writ, usually issuing out of the highest Court of general jurisdiction, in the name of the sovereignty, directed to any natural person, corporation or inferior Court within the jurisdiction, requiring them to do some particular thing therein specified, and which appertains to their office or duty. Generally speaking, it may be said that mandamus is a summary writ, issuing from the proper court, commanding the official or board to which it is addressed to perform some specific legal duty to which the party applying for the writ is entitled of legal right to have performed.
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Note 192.- Mandamus is, subject to the
exercise of a sound judicial discretion, the appropriate remedy to enforce a plain, positive, specific and ministerial duty presently existing and imposed by law upon officers and others who refuse or neglect to perform such duty, when there is no other adequate and specific legal remedy and without which there would be a failure of justice. The chief function of the writ is to compel the performance of public duties prescribed by the statute, and to keep subordinate and inferior bodies and tribunals exercising public functions within their jurisdictions. It is not necessary, however, that the duty be imposed by statue; mandamus lies as well for the enforcement of a common law duty.
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Note 196.- Mandamus is not a writ of right. Its issuance unquestionably lies in the sound judicial discretion of the court subject always to the well-settled principles which have been established by the courts. An action in mandamus is not governed by the principles of ordinary litigation where the matters alleged on one side and not denied on the other are taken as true, and judgment pronounced thereon as of course. While mandamus is classed as a legal remedy, its issuance is largely controlled by equitable principles. Before granting the writ the court may, and should, look to the larger public interest which may be concerned- an interest which private litigants are apt to overlook when striving for private ends. The Court should act in view of all the existing facts, and with due regard to the consequences which will result. It is in every case a discretion dependent upon all the surrounding facts and circumstances.
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Note 206.- The correct rule is that mandamus will not lie where the duty is clearly discretionary and the party upon whom the duty rests has exercised his discretion reasonably and within his jurisdiction, that is, upon facts sufficient to support his action".
(26) In Comptroller and Auditor General of India, Gian Prakash, New Delhi and another, -Vs- K.S. Jagannathan and another, AIR 1987 SC 537, the Supreme Court held that the High Courts exercising their jurisdiction under Article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the Government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the Government or has exercised such discretion mala fide or on irrelevant considerations or by ignoring the relevant considerations and materials or in such a manner as to frustrate the object of conferring such discretion or the policy for implementing which such discretion has been conferred. In all such cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Article 226 issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the Government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the Court may itself pass an order or give directions which the Government or the public authority should have passed or given had it properly and lawfully exercised its discretion.
(27) In the instant case, as per Section 65 of the 2000 Act, the Central Government had to frame rules for apportionment. Section 65 clearly provides that the assets, rights and liabilities of the concerned body corporate shall be apportioned amongst the transferee bodies corporate in accordance with the rules to be made by the Central Government in this behalf and, upon such apportionment, the share of loss allotted to each transferee body corporate shall be dealt within accordance with the provisions of Chapter VI of the Income Tax Act. The Central Government has not shown any specific reason as to why the rules have not been framed till date. If the rules would have been framed, there would have been no controversy at least relating to principles of apportionment and further in real apportionment of the assets, rights and liabilities between the two successor Boards. The Central Government took stand before the Supreme Court in writ petition filed by the MPSEB (supra) that current assets and liabilities of the Board were apportioned on the basis of power consumption ratio of the States. In the instant writ petition, as stated above, no specific, stand has been taken by the Central Government to show as to why the rules have not been framed so far. On the contrary the Central Government has taken the stand that framing of the rules will not affect the income of the assesses for any assessment year in question. The unabsorbed losses of the undivided Board were not filed in the return of the income within the due date prescribed under Section 139 (3) of the Income Tax Act, therefore, these cannot be carried forward as per law under Section 80 to be set off against the income of the subsequent assessment year. It has been contended that even if the rules are framed the petitioner is not going to be benefited as it would not be able to claim the unabsorbed losses in its return of income for the subsequent year, thus not framing of rules is going to make no difference in case of the petitioner. This cannot be a good ground to escape the definite liability incurred upon the Central Government by the clear provisions made in the 2000 Act. In light of the provision of Section 65 of 2000 Act, it cannot be said that the petitioner has no legal right to call upon the Central Government for performance of the legal duty cast upon it which, in our opinion, is distinguishable from discretion. The provisions of Section 65 about the legal duty of Central Government to make the rules is unambiguous and clear. We are of the view that the Central Government is under obligation to frame the rules under Section 65 of the 2000 Act.
(28) Under Section 119 (2)(b) of the IT Act, the power vested with the CBDT is for the purpose of being used for the benefit of assesses and the legislature has specified the condition upon which assessee would be entitled to call upon for its exercise. The CBDT is sitting tight over the applications/representations made in that behalf and a long time has been elapsed thereafter.
(29) In the above facts and circumstances of the case, we dispose of the writ petition in the following terms:-
i. Government of India is directed to look into the desirability of framing of rules under Section 65 of the M.P. Re-organization Act 2000 and do the needful in this regard.
ii. CBDT is directed to dispose of the representations dated 24.10.2006 and 17.08.2007 (Annexure-P-32 and 33) in accordance with the observations made herein above and in accordance with law.
iii. In addition to the above representations, the parties shall be free to file additional affidavits raising all their grievances before the CBDT, which shall also be taken into consideration by the CBDT.
iv. If the delay is condoned, the CBDT shall pass the subsequent orders in accordance with law.
v. No coercive steps shall be taken by the Revenues against the petitioner pursuant to the impugned demand till the decision is taken by the CBDT.
vi. No order as to cost.
JUDGE