The ACIT, Bhopal V. M/s Narmada Hydroelectric Development Corporation Ltd., Bhopal

ITA 372/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0017 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-08-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K SINGH
• Assessee Lawyers: SSH M C MEHTA; H CHIMNANI CAS

Judgement Text

PAGE 1 OF 7 IN THE INCOME TAX APPELATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI BHAVNESH SAINI, JM AND SHRI M.L.GUSIA, AM ITA NO.372/IND/2009 A.Y. 2006-07 ASSISTANT COMMISSIONER OF INCOME TAX, 2(1), BHOPAL APPELLANT V/S. M/S. NARMADA HYDROELECTRIC DEVELOPMENT CORPORATION LTD., NHDC PARISAR, BEHIND HOTEL LAKE VIEW ASHOKA, SHYAMLA HILLS, BHOPAL (PAN AABCN 1732 G) RESPONDENT DEPARTMENT BY SHRI K.K. SINGH, CIT, DR ASSESSEE BY S/SH. M.C. MEHTA & H. CHIMNANI, CAS ORDER PER SHRI BHAVNESH SAINI, JM THIS APPEAL OF THE REVENUE DEPARTMENT IS FILED AGAI NST THE ORDER OF LD. CIT(A)-I, BHOPAL DATED 11.5.2009 FOR THE AY 2006-07 . 2. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THE ASSE SSEE IS A GOVT. OF INDIA & GOVT. OF MADHYA PRADESH COMPANY. HE, THEREF ORE, SUBMITTED THAT REVENUE DEPARTMENT IS REQUIRED TO OB TAIN COD PAGE 2 OF 7 BEFORE FILING THE APPEAL BEFORE THE TRIBUNAL. LD. D R SUBMITTED THAT NO COD APPROVAL IS OBTAINED IN THIS CASE. 3. HONBLE SUPREME COURT IN THE CASE OF OIL & NATUR AL GAS COMMISSION V. CCE, SUPPL 4 SCC 541 HELD THAT IN EVERY CASE WHERE A DISPUTE IS BETWEEN GOVERNMENT DEPARTMENTS A ND/OR BETWEEN A GOVERNMENT DEPARTMENT AND A PUBLIC SECTOR UNDERTAKING, THE MATTER SHOULD BE REFERRED TO THE H IGH POWERED COMMITTEE ESTABLISHED BY THE GOVERNMENT PURSUANT TO AN ORDER OF THIS COURT DATED SEPTEMBER 11, 1991. IT IS POINTED OUT THAT IT HAS BEEN HELD BY THIS COURT THAT IT IS THE DUTY OF EVER Y COURT OR TRIBUNAL TO DEMAND CLEARANCE FROM THE COMMITTEE AND THAT IN THE ABSENCE OF CLEARANCE THE PROCEEDINGS MUST NOT BE PROCEEDED WITH. 4. HONBLE SUPREME COURT IN THE CASE OF MAHANAGAR T ELEPHONE NIGAM LIMITED VS. CHAIRMAN, CBDT, 267 ITR 647 HELD THAT AS THE HIGH POWERED COMMITTEE HAD NOT GIVEN CLEARANCE TO T HE APPELLANT, THE PROCEEDINGS COULD NOT BE PROCEEDED WITH. THE HI GH COURT WAS WRONG IN DEALING WITH THE MERITS OF THE MATTER AND THE SUPREME COURT WOULD NOT EXAMINE WHETHER THE HIGH COURT WAS RIGHT ON THE MERITS. PAGE 3 OF 7 5. WE ALSO THINK IT APPROPRIATE TO REPRODUCE THE DE CISION OF I.T.A.T., 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 JUDICIARY 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 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 PAGE 4 OF 7 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 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 THAT 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 PAGE 5 OF 7 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 MEMBER OF A STANDING COMMITTEE TO RESOLVE SUCH DISPUTES. THE CEO OF A STATE PSU COMES TO BE MEMBER 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 PAGE 6 OF 7 THE HIGH COURT HAD AN OCCASION TO CONSIDER THE ARGUMENTS, WHICH THE COUNSEL HAS ADVANCE BEFORE THIS TRIBUNAL, HIGH COURTS CONCLUSIONS MAY HAVE BEEN DIFFERENT, BUT THEN JUST BECAUSE 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 GOVERNMENT UNDERTAKING, FORMED AND INCORPORATED UNDER A LEGISLATION OF THE MAHARASHTRA STATE WITH 50 PERCENT SHAREHOLDING BY THE STATE GOVERNMENT DIRECTLY, AND IT IS INDEED NOT COVERED BY THE MAN DATE OF COD (CABINET SECRETARIAT) IN TERMS OF SUPREME COURTS DIRECTIONS. THE REQUIREMENT OF THE COD COMES INTO PLAY BECAUSE OF THE SCS LATER DIRECTIONS FOR SEEKING COD CLEARANCE IN RESPECT OF DISPUTES INVOLVING STATE GOVERNMENT AND PAGE 7 OF 7 STATE GOVERNMENT 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. 6. ADMITTEDLY IN THE PRESENT CASE, THE CLEARANCE OF HIGH POWER COMMITTEE IS NOT FILED THEREFORE ABOVE DEPARTMENT A PPEAL COULD NOT HAS BEEN PROCEEDED WITH. THE ABOVE APPEAL OF DE PARTMENT IS, THEREFORE, DISMISSED IN LIMINE WITH LIBERTY TO GET THE DEPARTMENT APPEAL REVIVED AFTER OBTAINING THE CLEARANCE FROM H IGH POWER COMMITTEE. THE SAME BE CONSIGNED TO RECORD ROOM. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2009. SD/- SD/- ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26.8.2009 !VYAS!