The DCIT, 2 (1), Bhopal V. M/s M.P. State Civil supplies Corp, Bhopal

ITA 105/IND/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1391 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2009
• Assessment Year: misc
• Appeal Filed On: 17-02-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K SINGH

Judgement Text

- 1 - IN THE INCOME TAX APPELATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH AND SHRI V.K. GUPTA, AM ITA NO. 105/IND/06 A.Y.2002-03 DY. COMMR. OF INCOMETAX 2(1), BHOPAL APPELLANT VS. M/S.M.P. STATE CIVIL SUPPLIES CORPORATION LIMITED BHOPAL RESPONDENT PAN AACCM5763B APPELLANT BY SHRI K.K. SINGH, CIT DR RESPONDENT BY SHRI AJAY CHHAJED, ADVOCATE O R D E R PER JOGINDER SINGH, JM THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORDER DATED 6.12.2005 OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS)-I, BHOPAL, ON THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN :- - 2 - 1. GRANTING RELIEF OF RS.2,00,000/- RIGHTLY ADDED BY T HE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF ST AFF WELFARE. 2. GRANTING RELIEF OF RS. RIGHTLY ADDED BY THE ASSESSI NG OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEING THE REDUC TION OF COST BY GOVT. OF INDIA. 3. GRANTING RELIEF OF RS. 2,17,809/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PERIOD EXPENDITURE BEING THE MOISTURE GAIN AMOUNT. 4. GRANTING RELIEF OF RS. 44,54,719/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPEND ITURE BEING THE CARE CHARGE CLAIMS 5. GRANTING RELIEF OF RS. 17,71,100/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPEND ITURE BEING THE DA ARREARS. 6. GRANTING RELIEF OF RS.5,28,837/- RIGHTLY ADDED BY T HE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEIN G THE TRANSPORTATION CHARGES 7. GRANTING RELIEF OF RS. 16,70,077/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPEND ITURE BEING THE PAYMENT AGAINST COURT ORDER. 8. GRANTING RELIEF OF RS.1,97,821/- RIGHTLY ADDED BY T HE ASSESSING OFFICER ON ACCOUNT OF PART PAYMENT OF COMMERCIAL TA X, CENTRAL SALES TAX AND ENTRY TAX. 9. GRANTING RELIEF OF RS. 1,00,000/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEIN G THE BALANCE PAYMENT TO MPLUNL IN THE CONNECTION WITH INTERNATIONAL TRADE FAIR. 10. GRANTING RELIEF OF RS.5,500/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEIN G THE - 3 - PAYMENT TO INCOMETAX ADVISOR FOR FILING OF REVISED INCOMETAX RETURN FOR A.Y. 1997-98. 11. GRANTING RELIEF OF RS.42,000/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEIN G THE PAYMENT OF CHARTERED ACCOUNTANT FOR AUDIT FEE FOR A .Y. 1997- 98. 12. GRANTING RELIEF OF RS. 4,000/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEIN G THE PAYMENT OF SERVICE TAX AMOUNT TO CHARTERED ACCOUNTA NT. 13. GRANTING RELIEF OF RS.10,07,971 RIGHTLY ADDED BY TH E ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEIN G THE DIFFERENCE AMOUNT OF PROVISIONAL AND FINAL INCIDENT ALS DECIDED BY THE GOI AND INTIMATED BY FCIT 14. GRANTING RELIEF OF RS.4,43,380/- RIGHTLY ADDED BY T HE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEIN G THE DIFFERENCE AMOUNT OF PROVISIONAL AND FINAL INCIDENT ALS DECIDED BY THE GOI AND INTIMATED BY FCIT 15. GRANTING RELIEF OF RS.19,597/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEIN G THE PAYMENT OF SHORTAGE AMOUNT TO THE TRANSPORTER. 16. GRANTING RELIEF OF RS.61,450/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF PRIOR PERIOD EXPENDITURE BEIN G THE PAYMENT OF SETTLEMENT AMOUNT TO THE TRANSPORTER. 17. GRANTING RELIEF OF RS. 1,70,700/- RIGHTLY ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF OTHER PRIOR PERIOD EXPENDITUR E 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I K.K. SINGH, LEARNED CIT DR AND SHRI AJAY CHHAJED, LEARNED COUNS EL FOR THE ASSESSEE. AT THE OUTSET IT WAS POINTED OUT THAT THERE IS NO P ERMISSION FROM THE - 4 - COD WITH THE DEPARTMENT, THEREFORE, THE APPEAL OF T HE REVENUE MAY BE DISMISSED. THE LEARNED COUNSEL FOR THE ASSESSEE AL SO FURNISHED A COPY OF THE ORDER DATED 22 ND JULY, 2009 IN ITA NOS. 122/IND/08 AND 1/IND/09 AND ITA NOS. 94/IND/08 (IN THE CASE OF THE ASSESSEE ON IDENTICAL FACTS), ALONG WITH ITA NOS. 03/IND/2009 AND 485 & 486/IND/2008. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. WE AR E REPRODUCING THE RELEVANT PORTION OF THE AFORESAID ORDER DATED 22 ND JULY, 2009 :- THE ABOVE CAPTIONED APPEALS OF THE ASSESSEE FILED IN ITA NOS. 122/IND/2008 AND 01/IND/2009 ARE DIRECT ED AGAINST THE ORDER OF CIT(A)-I, BHOPAL, DATED 19.12. 2007 AND 24.10.2008 AND RELATE TO ASSESSMENT YEARS 2003- 04 & 2004-05 RESPECTIVELY AND CROSS APPEAL FILED IN ITA NO. 94/IND/08 IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)- I, BHOPAL, DATED 19.12.2007 RELATING TO ASSESSMENT YEAR 2003-04. APPEAL FILED BY THE REVENUE IN ITA NO. 03/IND/09 IS FILED AGAINST THE ORDER OF CIT(A)-I, B HOPAL, DATED 20.10.2008 RELATING TO ASSESSMENT YEAR 2005-0 6 AND APPEALS FILED BY THE REVENUE IN ITA NOS. 485 & 486/IND/08 ARE DIRECTED AGAINST THE ORDER OF CIT(A) DATED - 5 - 11.9.2008. DIFFERENT ASSESSEES ARE THERE IN ALL TH ESE APPEALS. 2. WE HAVE HEARD THE PARTIES. IT IS NOTICED THAT IN THESE APPEALS, THE ASSESSEES ARE GOVERNMENT UNDERTAKINGS/CONCERNS, WHEREIN COMMITTEE ON DISPUTES PERMISSION IS REQUIRED. SIMILAR ISSUE HAS BEEN DECIDED BY THIS BENCH OF THE TRIBUNAL VIDE ORDER DATED 17.07.09 IN ITA NOS. 221 & 269/IND/2009 IN THE CASE OF M.P. RAJYA VAN VIKAS NIGAM, BHOPAL, FOR THE ASSESSMENT YEARS 1998-99 AND 2006-07 AND RELEVANT FINDING HAS BEEN GIVEN IN PARAS 2 & 3 WHICH READ AS UNDER :- 2. DURING THE COURSE OF HEARING BEFORE US, IT WAS ADMITTED BY BOTH THE PARTIES THAT THE ASSESSEE IS A STATE GOVERNMENT UNDERTAKING, THEREFORE, THESE ARE REQUIRED TO SEEK PERMISSION OF THE COMMITTEE ON DISPUTES, BUT IT WAS BROUGHT TO OUR NOTICE BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT NO PERMISSION TO PURSUE THESE APPEALS HAD BEEN ACCORDED TILL - 6 - NOW BY THE COMMITTEE ON DISPUTES. IN VIEW OF THE ABOVE, BOTH THESE APPEALS BY THE DEPARTMENT DESERVES TO BE DISMISSED FOR WANT OF NECESSARY PERMISSION FROM THE COMMITTEE ON DISPUTES WITH THE RIDER THAT IN CASE CLEARANCE IS OBTAINED FROM COMMITTEE ON DISPUTES, APPEALS SHALL BE RESTORED AND DISPOSED OF IN ACCORDANCE WITH LAW. FOR THIS PROPOSITION, WE ARE FORTIFIED BY THE FOLLOWING DECISIONS :- (I)OIL & NATURAL GAS COMMISSION V. COLLECTOR, CENTRAL EXCISE (1994) 70 ELT 45 (S.C.) (II)OIL & NATURAL GAS COMMISSION V. COLLECTOR, CENTRAL EXCISE (1995) SUPPLEMENTARY (4) SCC 541 (III) CHIEF CONSERVATOR OF FORESTS V. COLLECTOR (2003) 3 SCC 472 (IV) MAHANAGAR TELEPHONE NIGAM LIMITED V. CBDT; 267 ITR 362 (MAD.) (V) CIT V. NEYVELI LIGNITE CORPN. LTD. (2007) 293 ITR 362 (MAD.) (VI) OIL &NATURAL GAS CORPN. LIMITED V. CITY & INDUSTRIAL DEVELOPMENT CORPORATION - 7 - MAHARASHTRA LIMITED & OTHERS (2007) 7 SCC 39. 2. WE ALSO THINK IT APPROPRIATE TO REPRODUCE THE DECISION OF ITAT, PUNE BENCH, PUNE, IN THE CASE OF MAHARASHTRA STATE WAREHOUSING CORPORATION LIMITED VS. DY. CIT, REPORTED IN (2009) 122 TTJ (PUNE) 865, IN WHICH IT IS HELD AS UNDER :- AS A SMALL PART OF THIS JUDICIAL SYSTEM, TRIBUNAL IS DUTY BOUND TO FOLLOW THE DECISIONS OF THE HIGHER TIRES OF THIS SYSTEM. ONCE MADRAS HIGH COURT TAKES A STAND IN THE MATTER, AND THERE IS NO CONTRARY STAND AVAILABLE FROM ANY OTHER HIGH COURT, TRIBUNAL IS DUTY BOUND TO FOLLOW THE SAME. THE TRIBUNAL CANNOT, AND WOULD NOT, SIT IN JUDGMENT AS TO WHETHER OR NOT THE COURTS ABOVE WERE JUSTIFIED IN TAKING THE STAND THAT THEY DID SUCH AN APPROACH WILL LEAD TO UTTER CHAOS AND INDISCIPLINE. THE TRIBUNAL CANNOT - 8 - PROCEED ON THE BASIS THAT THE DIRECTIONS OF THE SUPREME COURT ARE MERELY RECOMMENDATORY OR HAVE BEEN IGNORED BY THE APPROPRIATE AUTHORITIES. THERE IS NO WARRANT FOR SUCH A PRESUMPTION. THE TRIBUNAL HAS NO REASONS TO DOUBT THAT DIRECTIONS OF THE SUPREME COURT HAVE NOT BEEN IMPLEMENTED BUT, IN ANY EVENT, IF A COMMITTEE HAS NOT COME INTO EXISTENCE DESPITE THE CLEAR DIRECTIONS OF SUPREME COURT TO THE EFFECT THAT SUCH A COMMITTEE BE CONSTITUTED FORTHWITH, THE REMEDY DOES NOT LIE WITH THE TRIBUNAL. OF COURSE, AS THE COUNSEL SUGGESTS, IN CASE SUCH A COMMITTEE IS NOT REALLY FORMED WHICH HAS THE MANDATE TO RESOLVE DISPUTE OF A STATE PSU WITH THE CENTRAL GOVERNMENT DEPARTMENT, IT WOULD INDEED BE EXPECTING THE ASSESSEE PSU TO DO THE IMPOSSIBLE ACT OF TAKING CLEARANCE FROM A - 9 - COMMITTEE WHICH DOES NOT EXIST. HOWEVER, THERE HAS TO BE SOME AUTHORITATIVE EVIDENCE OF THE FACT THAT SUCH A COMMITTEE DOES NOT EXIST. THE EVIDENCE HAS TO BE SOMETHING MORE THAN BALD STATEMENTS OF THE ASSESSEE AND PERHAPS BY WAY OF A CONFIRMATION FROM A RESPONSIBLE FUNCTIONARY IN THE STATE GOVERNMENT. IN ANY EVENT, THERE IS NO AUTHORITATIVE MATERIAL BEFORE THE TRIBUNAL THAT SUCH A COMMITTEE DOES NOT EXIST. THE ASSESSEES CASE IS THAT SINCE CEO OF THE ASSESSEE COMPANY IS NOT YET INFORMED ABOUT THE CONSTITUTION OF THE COMMITTEE, AND AS PER SUPREME COURTS DIRECTION, HE WAS SUPPOSED TO BE A MEMBER OF THIS COMMITTEE, IT IS PRESUMED THAT THE COMMITTEE IS NOT YET CONSTITUTED, BUT THEN THIS SUBMISSION PROCEEDS ON THE FALLACY THAT CEO OF EVERY STATE PSU IS TO BE A - 10 - MEMBER OF A STANDING COMMITTEE TO RESOLVE SUCH DISPUTES. THE CEO OF A STATE PSU COMES TO BE MEMBERS OF THE COMMITTEE ONLY WHEN SUCH A PSU IS PARTY TO THE DISPUTE BEFORE THE COMMITTEE. THE CEO OF THE ASSESSEE MAKES A REFERENCE OF A DISPUTE TO THE COMMITTEE, AND ADMITTEDLY NO SUCH REFERENCE IS YET MADE. NO DOUBT WHEN A JUDICIAL PRECEDENT IS LAID DOWN WITHOUT BENEFIT OF PROPER ASSISTANCE, IF THAT BE SO, MANY SUFFER UNDULY DUE TO SUCH MISHAP. THE SOLUTION, HOWEVER, IS NOT AT A LOWER LEVEL OF JUDICIAL MACHINERY. THE TRIBUNAL DOES NOT AND CANNOT, RULE OUT THE POSSIBILITY THAT IF THE HIGH COURT HAD AN OCCASION TO CONSIDER THE ARGUMENTS, WHICH THE COUNSEL HAS ADVANCED BEFORE THIS TRIBUNAL, HIGH COURTS CONCLUSIONS MAY HAVE BEEN DIFFERENT, BUT THEN JUST BECAUSE - 11 - PRESENTATION BEFORE THIS TRIBUNAL IS PERCEIVED TO BE MORE COMPREHENSIVE AND THOUGHTFUL, THIS TRIBUNAL CANNOT DECLINE TO FOLLOW A BINDING JUDICIAL PRECEDENT. AS FOR THE FACT THAT COD (CABINET SECRETARIAT) HAS TURNED DOWN ASSESSEES REQUEST TO GRANT CLEARANCE, IN THIS TRIBUNALS HUMBLE UNDERSTANDING THE ASSESSEE IS A STATE GOVERNMENT UNDERTAKING, FORMED AND INCORPORATED UNDER A LEGISLATION OF THE MAHARASHTRA STATE WITH 50 PERCENT SHAREHOLDING BY THE STATE GOVERNMEBNT DIRECTLY, AND IT IS INDEED NOT COVERED BY THE MANDATE OF COD (CABINET SECRETARIAT) IN TERMS OF SUPREME COURTS DIRECTIONS. THE REQUIREMENT OF THE COD COMES INTO PLAY BECAUSE OF THE SUPREME COURTS LATER DIRECTIONS FOR SEEKING COD CLEARANCE IN RESPECT OF DISPUTES INVOLVING STATE GOVERNMENT AND STATE GOVERNMENT - 12 - BODIES. THEREFORE, THE ASSESSEE AS ALSO THE REVENUE OUGHT TO HAVE TAKEN THE CLEARANCE OF THE COD AND IN THE ABSENCE OF SUCH A CLEARANCE, THE APPEALS ARE NOT MAINTAINABLE. THE APPEALS ARE DISMISSED AS NOT MAINTAINABLE THOUGH WITH A LIBERTY TO REVIVE THESE APPEALS UPON OBTAINING THE CLEARANCE OF THE COD OR WITH THE EVIDENCE THAT SUCH A COMMITTEE DOES NOT EXIST OR IS IN THE PROCESS. 4. SO RESPECTFULLY FOLLOWING THE AFORESAID ORDER DATED 17 TH JULY, 2009 (SUPRA), ALL THESE APPEALS ARE DISMISSED. 5. IN THE RESULT, THE ALL THE APPEALS ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED ON 22 ND JULY, 2009. IN VIEW OF THE AFORESAID ORDER AND IN THE ABSENCE OF ANY CONTRARY DECISION BROUGHT TO OUR NOTICE BY EITHER SIDE, RESP ECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL, THIS APPEAL OF THE REV ENUE IS DISMISSED. - 13 - ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES ON 26 TH NOVEMBER, 2009. (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER NOVEMBER 26, 2009 COPY TO APPELLANT, RESPONDENT, CIT, CIT(A), DR *D/