M/s Mysore Urban Development Authority, Mysore V. ITO, Mysore

ITA 98/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0553 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-01-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 09-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V S SREELEKHA
• Assessee Lawyers: S R KIRON
• Section: 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE B BENCH, BANGALORE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI N.L.KALRA, AM ITA NOS.97 & 98(BANG.)/2009 (ASSESSMENT YEARS : 2004-05 & 2005-06) M/S MYSORE URBAN DEVELOPMENT AUTHORITY, JLB RAD, MYSORE APPELLANT VS THE INCOME-TAX OFFICER, WARD-2(2), MYSORE RESPONDENT ASSESSEE BY : SHRI S.R.KIRON REVENUE BY : SMT. V.S.SREELEKHA O R D E R PER SHAILENDRA KUMAR YADAV, JM: BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAIN ST THE RESPECTIVE ORDERS OF CIT(A). 2. AT THE OUTSET OF HEARING, LEARNED DR POINTED OUT THA T THE ASSESSEE HAS NOT OBTAINED APPROVAL FROM COMMITTEE OF DIS PUTES. WE FIND THAT THE MATTER OF DISPUTE BETWEEN A PUBLIC SECTOR U NDERTAKINGS AND THE GOVERNMENT AS LAID DOWN BY THE SUPREME COURT IN ONGC VS COLLECTOR OF CENTRAL EXCISE (1995) SUPP(40SCC 541 AND IN OT HER CASES, HAS SET GUIDELINES IN SUCH MATTERS. WHETHER THIS REQUIREM ENT OF PRIOR CLEARANCE FROM A GOVERNMENT COMMITTEE IS NECESSARY EVEN IN RESPECT OF A DISPUTE BETWEEN SUCH PUBLIC SECTOR UNDERTAKINGS AND T HE STATE ITA NOS.97 & 98(BNG.)/2009 2 GOVERNMENT IS NOW A LIVE ISSUE. APPROVAL BY A DIFFERENT COMM ITTEE OF DISPUTES (COD) WITH STATE PARTICIPATION WAS HELD TO BE A REQUIREMEN T AS DECIDED BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF TAMILNADU WAREHOUSING CORPORATION VS DEPUTY CIT(2009) 309 ITR 25 2. HONBLE RAJASTHAN HIGH COURT IN THE STATE OF RAJASTHAN VS IT AT (2003) 259 ITR 686 AND CIT VS DELHI TOURISM AND TRANSPORTATION D EVELOPMENT CORPORATION LTD., (2005) 274 ITR 35(DELHI) ALSO REQUIRED SUCH CLEARANCE. BUT THE HONBLE ANDHRA PRADESH HIGH COURT IN ANDHRA PR ADESH POWER GENERATION LTD., VS ASST. CIT(2006) 280 ITR 388(AP) TOOK THE VIEW THAT THE RULE IN ONGCS CASE HAS NO APPLICATION, WHERE STATE G OVERNMENT WAS A PARTY, FOLLOWED BY THE TRIBUNAL IN DEPUTY CIT VS M AHARASHTRA STATE ROAD TRANSPORT CORPORATION(2006) 284 ITR (AT) 602 (MUM) (SB). THE SAME ISSUE HAS COME UP BEFORE THE HONBLE GUJARAT HIGH COURT IN GUJARAT MINERAL DEVELOPMENT CORPORATION LTD., VS ITAT(20 09) 314 ITR 14, WHICH FOLLOWED THE DECISION OF HONBLE ANDHRA PRADESH HIG H COURT THAT PRIOR APPROVAL IS NOT NECESSARY. THE HONBLE MADRA S HIGH COURTS VIEW, WHICH HAD PROVIDED A MECHANISM ACCEPTABLE TO THE ST ATE GOVERNMENT WITH STATE PARTICIPATION IN COMMITTEE OF DISPUTE S (COD), IN LINE WITH THE SUPREME COURT GUIDELINES IN ONGC AND OTHER CASES, WOULD BE A BETTER OPTION. 3. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS A STATE G OVERNMENT PUBLIC SECTOR UNDERTAKING AND THERE IS NO CLEARANCE FROM HIGH POWER COMMITTEE. THE HONBLE MADRAS HIGH COURT OF TAMILNADU IN THE CASE OF WAREHOUSING CORPORATION (SUPRA) HAS HELD THAT THE DISPUTE BETWEEN ITA NOS.97 & 98(BNG.)/2009 3 GOVERNMENT DEPARTMENTS WOULD NOT BE CONTESTED IN THE COURTS. THE STATE/UNION OF INDIA MUST EVOLVE A MECHANISM FOR RESOLVING THE INTERDEPARTMENTAL CONTROVERSIES. THE COMMITTEE WOULD CONS ISTS OF CHIEF SECRETARY, SECRETARY OF DEPARTMENTS CONCERNED, SECRETA RY OF LAW AND SECRETARY OF FINANCE WHERE FINANCIAL CONSTRAINTS ARE INVOLV ED. THE DECISION OF SUCH COMMITTEE SHOULD BE BINDING ON ALL THE DEPA RTMENTS CONCERNED. IT WAS FURTHER HELD THAT IT WOULD BE OBLIGATION ON EVERY TRIBUNAL AND EVERY COURT WHERE SUCH DISPUTE IS RAISED HE RE AFTER TO OBTAIN CLEARANCE FROM COMMITTEE. IN ABSENCE OF CLEARANCE , PROCEEDINGS SHOULD NOT BE PROCEEDED WITH. HONBLE MADRAS HIGH COURT IN THE CASE OF M/S MADRAS FERTILIZERS LTD., VS DCIT( 2008) 298 ITR 13 6(MAD.) HELD THAT IN CASE OF PUBLIC SECTOR UNDERTAKINGS, WHERE THERE IS NO CLEARANCE FROM THE HIGH POWER COMMITTEE THE APPEAL WAS TO BE DISMIS SED WITH LIBERTY TO REVIVE THE APPEAL. 4. FOLLOWING THE ABOVE SAID DECISIONS IN TAMILNADU WAREHOUSIN G CORPORATION(SUPRA), WE DISMISS THE APPEALS FILED BY THE ASSES SEE IN ABSENCE OF COD APPROVAL. HOWEVER, THE ASSESSEE IS AT LIB ERTY TO REVIVE THE APPEALS IN QUESTION BY OBTAINING THE APPROVAL FROM COD AS MANDATED BY THE HONBLE MADRAS HIGH COURT OR BY BRINGIN G TO OUR KNOWLEDGE THAT FORMATION OF SUCH COMMITTEE HAS NOT BEEN INITIATED AS HELD BY PUNE BENCH IN THE CASE OF M/S MAHARASHTRA WARE HOUSING CORPORATION. SIMILAR VIEW HAS BEEN TAKEN BY BANGALORE BEN CH IN ITA NOS.1384 TO 1389(B)/08 DATED 31-07-2009 IN THE CASE OF D CIT VS M/S KARNATAKA LAND ARMY CORPORATION WHICH HAS NOT BEEN DIS PUTED BY ITA NOS.97 & 98(BNG.)/2009 4 REVENUE. IT IS PERTINENT TO MENTION HERE THAT SINCE WE ARE DISMISSING THE APPEALS, WE ARE REFRAINING FROM MAKING ANY COMMENT ON THE ISSUE AT HAND. 5. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF HEARING. ( N.L.KALRA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: BANGALORE DATED: AM * COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. CIT(A) 4. CIT 5. DR 6. GF(BLORE) 7. GF(DELHI AR, ITAT, BANGALORE