ACIT, Trivandrum V. M/s SBT, Trivandrum

ITA 406/COCH/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58372 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2012
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 08-03-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 02-07-2009
• Court: TRIBUNAL
• Department Lawyers: T J VINCENT
• Keywords: Search and seizure; Opportunity of being heard; Bad and doubtful debts
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A NO. 406/COCH/2009 ASSESSMENT YEAR : 2004-05 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), TRIVANDRUM VS. M/S. STATE BANK OF TRAVANCORE, HEAD OFFICE POOJAPPURA, TRIVANDRUM-695012.. [PAN: AAGCS 9120G] (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) REVENUE BY SHRI T.J. VINCENT, SR. DR ASSESSEE BY SHRI C.NARESH, CA DATE OF HEARING 08/03/2012 DATE OF PRONOUNCEMENT 29 /03/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 04-02-2009 PASSED BY LD CIT(A)-I, TRIVANDRUM AND IT RELATES TO THE ASSES SMENT YEAR 2004-05. 2. THE GROUNDS RAISED BY THE REVENUE RELATE TO THE FOLLOWING FOUR ISSUES, ON WHICH THE LD CIT(A) HAD GRANTED RELIEF TO THE ASSESSEE:- A) DISALLOWANCE MADE U/S 14A OF THE ACT. B) DISALLOWANCE OF CONTRIBUTION MADE TO RETIRED E MPLOYEES MEAL BENEFIT SCHEME. C) DISALLOWANCE OF BROKEN PERIOD INTEREST PAID ON PURCHASE OF SECURITIES. D) DISALLOWANCE OF BAD DEBTS CLAIM. 3. AT THE TIME OF HEARING, THE LD COUNSEL FOR T HE ASSESSEE BROUGHT TO OUR NOTICE THE MINUTES OF MEETING OF THE COMMITTEE ON DISPUTES (CO D) HELD ON 11-11-2010 AND I.T.A. NO.406/COCH/2009 2 SUBMITTED THAT THE COD HAS GIVEN PERMISSION TO THE REVENUE ONLY TO PURSUE THE ISSUES LISTED AS (A) AND (D) SUPRA. ACCORDINGLY, HE REQUE STED THAT THE GROUNDS RELATING TO THE ISSUES LISTED AS (B) AND (C) BE DISMISSED. 4. THE PROCEDURE FOR OBTAINING PERMISSION FROM THE COMMITTEE ON DISPUTES BY THE PUBLIC SECTOR UNDERTAKINGS WAS PRESCRIBED BY THE HO NBLE SUPREME COURT IN THE CASE OF OIL AND NATURAL GAS CORPORATION VS. COLLECTOR OF CE NTRAL EXCISE (1995) SUPPL.(4) SCC 541, (116 STC 418). IN THAT CASE, THE APEX COURT D IRECTED THE GOVERNMENT OF INDIA TO SET A COMMITTEE ON DISPUTES. THE CHEQUERED HISTORY WAS EXPLAINED BY THE HONBLE APEX COURT IN THE CASE OF ELECTRONICS CORPORATION OF IN DIA LTD. VS. UNION OF INDIA AND OTHERS (2011)(332 ITR 58) AS UNDER:- THIS WAS FOLLOWED BY THE ORDER DATED OCTOBER 11, 1 991, IN ONGC CASE (1995) SUPP 4 SCC 541 WHERE THIS COURT DIRECTED THE GOVERN MENT OF INDIA TO SET UP A COMMITTEE CONSISTING OF REPRESENTATIVES FROM THE MI NISTRY OF INDUSTRY, BUREAU OF PUBLIC ENTERPRISES AND THE MINISTRY OF LAW, TO MONI TOR THE DISPUTES BETWEEN MINISTRY AND MINISTRY OF THE GOVERNMENT OF INDIA, M INISTRY AND PUBLIC SECTOR UNDERTAKINGS OF THE GOVERNMENT OF INDIA AND PUBLIC SECTOR UNDERTAKINGS IN BETWEEN THEMSELVES, TO ENSURE THAT NO LITIGATION CO MES TO COURT OR TO A TRIBUNAL WITHOUT THE MATTERS HAVING BEEN FIRST EXAMINED BY T HE COMMITTEE AND ITS CLEARANCE FOR LITIGATION. THEREAFTER, IN ONGC CASE (2004) 6 SCC 437, THIS COU RT DIRECTED THAT IN THE ABSENCE OF CLEARANCE FROM THE COMMITTEE OF SECRETAR IES (COS), ANY LEGAL PROCEEDING WILL NOT BE PROCEEDED WITH. SUBSEQUENTLY, FOR THE REASONS STATED IN ITS ORDER I N THE CASE OF ELECTRONICS CORPORATION OF INDIA LTD, SUPRA, THE HONBLE SUPREME COURT RECALLE D ITS ORDERS RELATING TO THE OBTAINING OF APPROVAL FROM COMMITTEE ON DISPUTES. SUBSEQUENT THERE TO, THERE IS NO NECESSITY FOR THE MINISTRIES AND PUBLIC SECTOR UNDERTAKINGS OF GO VERNMENT OF INDIA TO OBTAIN ANY SUCH PERMISSION FROM COMMITTEE ON DISPUTES FOR PROSECUTI NG THE APPEALS. 5. NOW THE QUESTION THAT ARISES IS WHETHER THE ORDER PASSED BY THE COMMITTEE ON DISPUTES DENYING PERMISSION WOULD STILL BE VALID EV EN AFTER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ELECTRONICS CORPORATIO N OF INDIA LTD, SUPRA. THIS QUESTION I.T.A. NO.406/COCH/2009 3 CAME TO BE CONSIDERED BY THE HONBLE KERALA HIGH CO URT IN THE ASSESSEES OWN CASE IN RP NO.895 OF 2010. THE JURISDICTIONAL HIGH COURT, VIDE ITS ORDER DATED 30-11-2011 HAS HELD AS UNDER:- HOWEVER, THE RESPONDENTS COUNSEL BROUGHT TO OUR N OTICE THAT THE COD REJECTED REVENUES APPLICATION FOR PERMISSION TO FILE APPEAL S THROUGH SEPARATE ORDERS DATED 20/05/2005, 17/06/2006, 11/11/2008 & 20/08/2009, WH ICH HAPPENED MORE THAN 2 YEARS PRIOR TO THE DATE OF THE JUDGMENT OF THE HONO URABLE SUPREME COURT. IN OTHER WORDS, WHEN THE COMMITTEE CONSIDERED AND DECL INED PERMISSION TO THE REVENUE, THE COMMITTEE REMAINED VALIDLY CONSTITUTED UNDER THE ORDERS OF THE SUPREME COURT, AND SO MUCH SO, WE ARE AFRAID WE CAN NOT IGNORE THOSE ORDERS. WE REFUSED TO ENTERTAIN THE APPEALS AND REJECTED TH E SAME ONF 15/12/2009 FOR THE REASON THAT THE COMMITTEE ON DISPUTES DECLINED PERM ISSION. THE HONOURABLE SUPREME COURT IN THE JUDGEMENT REFERRED TO ABOVE HA S NOT STATED AS TO WHETHER THE APPROVALS GRANTED OR DECLINED BY THE COMMITTEE COUL D BE GONE INTO BY THE APPELLATE COURT IN ANY CASE PENDING OR DISPOSED OF. SO MUCH SO, WE FEEL THE APPLICATIONS OF THE REVENUE CANNOT BE ALLOWED. THUS, THE JURISDICTIONAL HIGH COURT HAS MADE IT CLE AR THAT THE ORDERS ALREADY PASSED BY COD CANNOT BE IGNORED, EVEN AFTER THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF ELECTRONICS CORPORATION OF INDIA, SUPRA. IN THE INSTANT CASE, THE COD HAS PASSED ITS ORDER ON 11.11.2010. THE DECISION IN THE CASE OF E LECTRONICS CORPORATION OF INDIA LTD, SUPRA, WAS RENDERED BY HONBLE APEX COURT ON 17-12- 2011. SINCE THE COD IN THE INSTANT CASE HAS PASSED ITS ORDERS PRIOR TO THE DAT E OF DECISION OF HONBLE SUPREME COURT REFERRED SUPRA, THE SAID ORDER OF THE COD CANNOT BE IGNORED AS PER THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT REFERRED SUPRA AN D CONSEQUENTLY IT HAS TO BE COMPLIED WITH. SINCE THE COD HAS DENIED PERMISSION TO PROS ECUTE THE ISSUES LISTED AS (B) AND (C) IN PARAGRAPH 2 SUPRA, WE DISMISS THE GROUNDS RAISED BY THE REVENUE RELATING TO THE SAME. 5. WE SHALL PROCEED TO ADDRESS THE REMAINING TWO I SSUES. THE FIRST ONE RELATES TO THE DISALLOWANCE OF EXPENSES U/S 14A OF THE ACT ON ESTI MATED BASIS. WE NOTICE FROM THE ORDER OF LD CIT(A) THAT THE CO-ORDINATE BENCH OF IT AT, COCHIN HAD CONSIDERED AN IDENTICAL ISSUE IN THE ASSESSEES OWN CASE RELATING TO THE ASSESSMENT YEAR 2000-01 IN ITA NO.295/COCH/2003 AND THE TRIBUNAL, VIDE ITS ORDER D ATED 19-09-2006, HAS HELD THAT NO EXPENDITURE CAN BE DISALLOWED ON ESTIMATE BASIS. T HE LD CIT(A) HAS FOLLOWED THE SAID I.T.A. NO.406/COCH/2009 4 DECISION IN DECIDING THIS ISSUE IN FAVOUR OF THE AS SESSEE. SINCE A PARTICULAR VIEW HAS ALREADY BEEN TAKEN BY THE ITAT IN THE ASSESSEES OW N CASE ON IDENTICAL FACTS, WE DO NOT FIND IT NECESSARY TO DIFFER WITH IT. SINCE THE LD CIT(A) HAS FOLLOWED THE SAID DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL, WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF LD CIT(A) ON THIS ISSUE. 6. THE NEXT ISSUE RELATES TO THE DISALLOWANCE O F BAD DEBTS CLAIM OF RS.112,53,34,108/-. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAID ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE LATEST DECISION DATED 17-02-2012 OF HONBLE SUPREME COURT IN THE CASE OF CATHOLIC SYRIAN BANK IN CIVIL APPEAL NO.1143 OF 201 1. SINCE THE CLAIM OF THE ASSESSEE REQUIRES EXAMINATION AT THE END OF THE AO, WE SET A SIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSES SING OFFICER WITH A DIRECTION TO EXAMINE THE ABOVE SAID CLAIM OF THE ASSESSEE AFTER AFFORDIN G NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THERE AFTER DECIDE THE SAME IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 29/3/12 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 29TH MARCH, 2012 GJ COPY TO: 1. M/S. STATE BANK OF TRAVANCORE, HEAD OFFICE POOJ APPURA, TRIVANDRUM-695 012. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(1), TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . BY ORDER (ASSISTANT REGISTRAR) ITAT, COCHIN