M/s. Coal India Ltd, Kolkata V. ACIT, Circle - 5, Kolkata, Kolkata

MA 54/KOL/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9746 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2001-2002
• Appeal Filed On: 02-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

M.A.54/ KOL./2011 (IN I.T.A. NO.1633/ KOL. / 2006) AS SESSMENT YEAR : 2001-02 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA E BENCH, KOLKATA BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER), AND SHRI MAHAVIR SINGH (JUDICIAL MEMBER) M.A. NO. 54/KOL./2011 (ARISING OUT OF I.T.A. NO.: 1633/ KOL. / 2006) ASSESSMENT YEAR : 2001-02 M/S. COAL INDIA LTD.,.....APPLICANT 10, N.S. ROAD, KOLKATA-700 001 [PAN : AABCC 3929 J] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX, ....RESPONDENT, CIRCLE-5, KOLKATA APPEARANCES BY: NIMESH KUMAR, A.R., FOR THE APPLICANT P.K. MONDAL, SR. D.R., FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : NOVEMBER 16, 2012 DATE OF PRONOUNCING THE ORDER : DECEMBER 28, 2012 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS MISCELLANEOUS APPLICATION, THE AS SESSEE APPLICANT SEEKS RECALL OF ORDER DATED 18 TH JANUARY, 2007, PASSED BY THIS TRIBUNAL, SUMMARILY DISMISSING, FOR WANT OF CLEARANCE OF THE COMMITTEE ON DISPUTES (COD) TO PURSUE THE APPEAL BEFORE THE TRIB UNAL, ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2001-02. IT IS NOT I N DISPUTE THAT IN VIEW OF HONBLE SUPREME COURTS SUBSEQUENT JUDGMENT, IN THE CASE OF ELECTRONIC CORPORATION OF INDIA LTD. VS.- UNION O F INDIA (332 ITR 58), M.A.54/ KOL./2011 (IN I.T.A. NO.1633/ KOL. / 2006) AS SESSMENT YEAR : 2001-02 PAGE 2 OF 7 SUCH A CLEARANCE IS NOT NECESSARY. IN THE SAID JUDG MENT, HONBLE SUPREME COURT HAS, INTER ALIA , OBSERVED AS FOLLOWS :- LEARNED ATTORNEY GENERAL HAS SUBMITTED THAT THE AB OVE ORDERS HAVE OUTLIVED THEIR UTILITY AND IN VIEW OF THE CHANGED S CENARIO, AS INDICATED HEREINAFTER, THE AFORESTATED ORDERS ARE REQUIRED TO BE RECALLED. WE FIND MERIT IN THE SUBMISSION MADE BY THE ATTORNEY GENERA L OF INDIA ON BEHALF OF THE UNION OF INDIA FOR THE FOLLOWING REAS ONS. BY ORDER DATED 11.09.1991, REPORTED IN 1992 SUPP (2) SCC 432 (ONGC AND ANR. V. CCE) THIS COURT NOTED THAT PUBLIC SECTOR UNDERTAKI NGS OF CENTRAL GOVERNMENT AND THE UNION OF INDIA SHOULD NOT FIGHT THEIR LITIGATIONS IN COURT. CONSEQUENTLY, THE CABINET SECRETARY, GOV ERNMENT OF INDIA WAS CALLED UPON TO HANDLE THE MATTER PERSONALLY. THIS WAS FOLLOWED BY THE ORDER DATED 11.10.1991 IN ONGC. II CASE (SUPRA) WHERE THIS COURT DIRECTED THE GOVERNMENT OF INDIA TO SET UP A COMMITTEE CONSISTING OF REPRESENTATIVES FROM THE MI NISTRY OF INDUSTRY, BUREAU OF PUBLIC ENTERPRISES AND MINISTRY OF LAW, T O MONITOR DISPUTES BETWEEN MINISTRY AND MINISTRY OF GOVERNMENT OF INDI A, MINISTRY AND PUBLIC SECTOR UNDERTAKINGS OF THE GOVERNMENT OF IND IA AND PUBLIC SECTOR UNDERTAKINGS BETWEEN THEMSELVES, TO ENSURE T HAT NO LITIGATION COMES TO COURT OR TO A TRIBUNAL WITHOUT THE MATTER HAVING BEEN FIRST EXAMINED BY THE COMMITTEE AND ITS CLEARANCE FOR LIT IGATION. THEREAFTER, IN ONGC-III CASE (SUPRA), THIS COURT DI RECTED THAT IN THE ABSENCE OF CLEARANCE FROM THE COMMITTEE OF SECRETA RIES(COS), ANY LEGAL PROCEEDING WILL NOT BE PROCEEDED WITH. THIS W AS SUBJECT TO THE RIDER THAT APPEALS AND PETITIONS FILED WITHOUT SUCH CLEARANCE COULD BE FILED TO SAVE LIMITATION. IT WAS, HOWEVER, DIRECTED THAT THE NEEDFUL SHOULD BE DONE WITHIN ONE MONTH FROM SUCH FILING, F AILING WHICH THE MATTER WOULD NOT BE PROCEEDED WITH. BY ANOTHER ORDE R DATED 20.07.2007 (ONGC-IV CASE) THIS COURT EXTENDED THE CONCEPT OF D ISPUTE RESOLUTION BY HIGH POWERED COMMITTEE TO AMICABLY RESOLVE THE D ISPUTES INVOLVING THE STATE GOVERNMENTS AND THEIR INSTRUMENTALITIES. THE IDEA BEHIND SETTING UP OF THIS COMMITTEE, INITI ALLY, CALLED A HIGH- POWERED COMMITTEE (HPC), LATER ON CALLED AS COMMI TTEE OF SECRETARIES (COS) AND FINALLY TERMED AS COMMITTEE ON DISPUTES(COD) WAS TO ENSURE THAT RESOURCES OF THE STATES ARE NOT FRITTERED AWAY IN INTER SE LITIGATIONS BETWEEN ENTI TIES OF THE STATE, M.A.54/ KOL./2011 (IN I.T.A. NO.1633/ KOL. / 2006) AS SESSMENT YEAR : 2001-02 PAGE 3 OF 7 WHICH COULD BE BEST RESOLVED, BY AN EMPOWERED COD. THE MACHINERY CONTEMPLATED WAS ONLY TO ENSURE THAT NO LITIGATION COMES TO COURT WITHOUT THE PARTIES HAVING HAD AN OPPORTUNITY OF CO NCILIATION BEFORE AN IN-HOUSE COMMITTEE. [PARA 3 OF THE ORDER DATED 7.1. 1994 (SUPRA)] WHILST THE PRINCIPLE AND THE OBJECT BEHIND THE AFOR ESTATED ORDERS IS UNEXCEPTIONABLE AND LAUDATORY, EXPERIENCE HAS SHOWN THAT DESPITE BEST EFFORTS OF THE COD, THE MECHANISM HAS NOT ACHIEVED THE RESULTS FOR WHICH IT WAS CONSTITUTED AND HAS IN FACT LED TO DEL AYS IN LITIGATION. WE HAVE ALREADY GIVEN TWO EXAMPLES HEREINABOVE. THEY I NDICATE THAT ON SAME SET OF FACTS, CLEARANCE IS GIVEN IN ONE CASE A ND REFUSED IN THE OTHER. THIS HAS LED A PSU TO INSTITUTE A SLP IN THIS COURT ON THE GROUND OF DISCRIMINATION. WE NEED NOT MULTIPLY SUCH ILLUSTRAT IONS. THE MECHANISM WAS SET UP WITH A LAUDATORY OBJECT. HOWEV ER, THE MECHANISM HAS LED TO DELAY IN FILING OF CIVIL APPEA LS CAUSING LOSS OF REVENUE. FOR EXAMPLE, IN MANY CASES OF EXEMPTIONS, THE INDUSTRY DEPARTMENT GIVES EXEMPTION, WHILE THE SAME IS DENIE D BY THE REVENUE DEPARTMENT. SIMILARLY, WITH THE ENACTMENT OF REGULA TORY LAWS IN SEVERAL CASES THERE COULD BE OVERLAPPING OF JURISDI CTIONS BETWEEN, LET US SAY, SEBI AND INSURANCE REGULATORS. CIVIL APPEALS L IE TO THIS COURT. STAKES IN SUCH CASES ARE HUGE. ONE CANNOT POSSIBLY EXPECT TIMELY CLEARANCE BY COD. IN SUCH CASES, GRANT OF CLEARANCE TO ONE AND NOT TO THE OTHER MAY RESULT IN GENERATION OF MORE AND MORE LITIGATION. THE MECHANISM HAS OUTLIVED ITS UTILITY. IN THE CHANGED SCENARIO INDICATED ABOVE, WE ARE OF THE VIEW THAT TIME HAS COME UNDER THE ABOVE CIRCUMSTANCES TO RECALL THE DIRECTIONS OF THIS COUR T IN ITS VARIOUS ORDERS REPORTED AS (I) 1995 SUPP (4) SCC 541 DATED 11.10.1991, (II) (2004) 6 SCC 437 DATED 7.1.1994 AND (III) (2007) 7 SCC 39 DATED 20.07.2007. IN THE CIRCUMSTANCES, WE HEREBY RECALL THE FOLLOWIN G ORDERS REPORTED IN (I) 1995 SUPP (4) SCC 541 DATED 11.10.1991; (II) (2004) 6 SCC 437 DATED 7.1.1994; (III) (2007)( 7 SCC 39 DATED 20.07.2007.. 2. THE AFORESAID MISCELLANEOUS APPLICATION HAS BEEN FILED ON 6 TH JUNE, 2011, WHEREAS THE TRIBUNALS ORDER, WHICH IS SOUGHT TO BE RECALLED, WAS PASSED ON 18 TH JANUARY, 2007. IN EFFECT, THUS THE M.A.54/ KOL./2011 (IN I.T.A. NO.1633/ KOL. / 2006) AS SESSMENT YEAR : 2001-02 PAGE 4 OF 7 RECTIFICATION PETITION HAS BEEN PASSED AFTER FOUR Y EARS FROM THE DATE OF RELEVANT TRIBUNALS ORDER. IT WAS IN THIS BACKDROP THAT LEARNED COUNSELS ATTENTION WAS INVITED TO THE PROVISIONS O F SECTION 254(2) WHICH PROVIDE FOR A LIMITED TIME FRAME OF FOUR YEAR S, FROM THE DATE OF PASSING THE ORDER, FOR AMENDING ANY ORDER TO RECT IFY ANY MISTAKE APPARENT ON RECORD. THE ASSESSEE WAS THUS REQUIRED TO SHOW-CAUSE AS TO WHY THE MISCELLANEOUS APPLICATION NOT BE REJECTED A S TIME BARRED. 3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CA SE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 4. WE FIND THAT, AS HAS BEEN POINTED OUT BY THE LEA RNED COUNSEL FOR THE ASSESSEE, HONBLE BOMBAY HIGH COURT, IN THE CAS E OF KHUSHALCHAND B. DAGA VS.- 4 TH INCOME TAX OFFICER (85 ITR 48), WERE IN SEISIN OF A MATERIALLY SIMILAR SITUATION, I.E. IN WHICH A COORD INATE BENCH OF THIS TRIBUNAL HAD SUMMARILY DISMISSED AN APPEAL, WITHOUT DISMISSING MERITS OF ISSUES RAISED THEREIN, AND THE ASSESSEES APPLICATION TO RECALL THE SAID ORDER WAS RECEIVED BEYOND THE TIME LIMIT S ET OUT IN SECTION 35 OF THE INCOME TAX ACT, 1922 WHICH IS IN PARI MATERIA WITH SECTION 254(2) OF THE PRESENT ACT. WE FURTHER FIND THAT, AS IN THE SAID CASE BEFORE HONBLE BOMBAY HIGH COURT, THE IMPUGNED ORDER HAS B EEN RENDERED ERRONEOUS BECAUSE OF SUBSEQUENT JUDGMENT OF HONBLE SUPREME COURT. THE SAME IS THE SITUATION BEFORE US INASMUCH AS NOW IN THE CASE OF ELECTRONICS CORPORATION OF INDIA LTD. VS.- UNION O F INDIA (332 ITR 58), WHICH HOLDS THAT THE CLEARANCE OF COMMITTEE ON DISP UTES (CABINET SECRETARIAT) IS NOT MANDATORY EVEN IN CASES WHERE A PUBLIC SECTOR M.A.54/ KOL./2011 (IN I.T.A. NO.1633/ KOL. / 2006) AS SESSMENT YEAR : 2001-02 PAGE 5 OF 7 UNDERTAKING APPROACHES A COURT OR TRIBUNAL AGAINST A GOVERNMENT DEPARTMENT. ACCORDINGLY, THE IMPUGNED TRIBUNALS OR DER IS RENDERED ERRONEOUS BECAUSE OF SUBSEQUENT SUPREME COURT JUDGM ENT. THE OBSERVATIONS MADE BY HONBLE SUPREME COURT, IN THE CASE OF KHUSHALCHAND B. DAGA ( SUPRA ), FACTS OF WHICH ARE MATERIALLY SIMILAR, ARE IMPORTANT IN THIS CONTEXT :- EVEN IF IT WERE ASSUMED FOR THE PURPOSE OF ARGUMEN T THAT THE TRIBUNALS ORDER DAT4D 24 TH OCTOBER, 1961, WAS NOT A NULLITY BUT AN ERRONEOUS ORDER, IN VIEW OF TH E SUPREME COURT DECISION THAT RULE 24 WAS INVALID AND ULTRA VIRES BEING REPUGNANT TO SECTION 33(4) OF THE ACT, THE TRIBUNAL, IN MY VIEW, OUGHT TO HAVE SET ASIDE T HE SAID IMPUGNED ORDER IN EXERCISE OF ITS INHERENT POW ERS AND SHOULD HAVE REHEARD THE APPEAL ON MERITS, WITHO UT GOING INTO THE QUESTION AS TO WHETHER THE APPLICATI ON FOR RECTIFICATION OF THE MISTAKE WAS WITHIN TIME OR NOT, FOR, AFTER ALL, NO COURT OR TRIBUNAL CAN ALLOW A PA RTY TO SUFFER FOR ITS OWN MISTAKE. THAT THE COURT OR TRIBU NAL HAS SUCH INHERENT POWER TO CORRECT ITS OWN MISTAKE IS WELL-SETTLED. IN SUB-DIVISIONAL OFFICER (COMPENSATI ON OFFICER), MIRZAPUR VS. RAJA SRINIVASA PRASAD SINGH, IT HAS BEEN OBSERVED BY THE SUPREME COURT AS FOLLOWS : - EVERY COURT AND TRIBUNAL IS ENTITLED TO REOPEN A PROCEEDING WHICH HAS PROCEEDED EX PARTE, NOT BECAUSE A PARTY HAS FAILED TO APPEAR BUT BECAUSE A NOTICE HAS NOT BEEN SENT TO THE NECESSARY PARTY. A DECISION REACHED BEHIND THE BACK OF A NECESSARY PARTY TO WHOM NOTICE MUST BE SENT IS NOT BINDING UPON SUCH A PARTY AND THE COURT MAY IN SUCH A CASE REOPEN THE PROCEEDING TO GIVE THE PARTY A CHANCE TO STATE ITS CASE. THE DECISION WAS FOLLOWED BY THE ALLAHABAD HIGH COURT IN THE CASE OF INCOME TAX OFFICER, LUCKNOW VS.- S.B. SINGAR SINGH & SONS, WHERE THE ALLAHABAD HIGH COURT HELD AS FOLLOWS:- M.A.54/ KOL./2011 (IN I.T.A. NO.1633/ KOL. / 2006) AS SESSMENT YEAR : 2001-02 PAGE 6 OF 7 EVEN WHEN EXPRESS POWER TO REVIEW ITS ORDERS IS NOT CONFERRED BY A STATUTE, A COURT OR A TRIBUNAL HAS INHERENT JURISDICTION TO RECTIFY A WRONG COMMITTED BY ITSELF WHEN THAT WRONG CAUSES PREJUDICE TO A PARTY FOR WHICH THAT PARTY IS NOT RESPONSIBLE. IT IS TRUE THAT IN THE PRESENT CASE THE PETITIONER OR HIS REPRESENTATIVE DID NOT REMAIN PRESENT ON 24 TH OCTOBER, 1961, IN SPITE OF NOTICE HAVING BEEN SERVED UPON HI M BUT THAT IS BESIDE THE POINT. ON THAT DAY IN DISMISSING THE APPEAL FOR DEFAULT OF APPEARANCE THE TRIBUNAL UNDOUBTEDLY COMMITTED A MISTAKE AS ACCORDING TO THE SUPREME COURT THE TRIBUNAL HAD NO POWER TO DO SO BUT IT WAS UNDER AN OBLIGATION TO DECIDE THE APPEAL ON MERITS UNDER SECTION 33(4) AND THAT MISTAKE ON THE PART OF THE TRIBUNAL WOULD OBVIOUSLY CAUSE SERIOUS PREJUDICE TO THE PETITIONER IN THE MATTER OF PROSECUTING EFFICIENTLY THE FURTHER REMEDIES BY WAY OF REFERENCE TO THE HIGH COURT AND AN APPEAL TO THE SUPREME COURT. IN MY VIEW, THEREFORE, THE TRIBUNAL OUGHT TO HAVE DIRECTED THE APPEAL TO B E REHEARD ON MERITS, EVEN ON THE BASIS THAT ITS PREVI OUS ORDER DATED 24 TH OCTOBER, 1961, WAS AN ERRONEOUS ORDER OR AN ORDER CONTAINING AN ERROR APPARENT ON T HE FACT OF THE ORDER. 5. THE ABOVE OBSERVATIONS, IN OUR HUMBLE UNDERSTAND ING, ARE EQUALLY APPLICABLE IN THE PRESENT CASE AS CRUCIAL F ACTS ARE IN PARI MATERIA . NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR NOTI CE. THE IMPUGNED ORDER, THEREFORE, INDEED DESERVES TO BE RE CALLED EVEN THOUGH THE ASSESSEE HAS MOVED THE MISCELLANEOUS APPLICATIO N AFTER THE EXPIRY OF TIME LIMIT SET OUT IN SECTION 254(2) OF THE INCO ME TAX ACT, 1961. M.A.54/ KOL./2011 (IN I.T.A. NO.1633/ KOL. / 2006) AS SESSMENT YEAR : 2001-02 PAGE 7 OF 7 6. IN VIEW OF THE ABOVE DISCUSSIONS, AND HAVING REG ARD TO THE FACT THAT THE IMPUGNED TRIBUNALS ORDER HAS BEEN RENDERE D ERRONEOUS BY THE SUBSEQUENT JUDGMENT OF HONBLE SUPREME COURT INASMU CH AS IT IS NOT CONDITION PRECEDENT FOR US FOR ENTERTAINING AN INCO ME-TAX APPEAL FILED BY A PUBLIC SECTOR UNDERTAKING TO SATISFY OURSELVES THAT CLEARANCE OF THE COMMITTEE ON DISPUTES (CABINET SECRETARIAT) HAS BEEN OBTAINED, WE DEEM IT FIT AND PROPER TO RECALL THE ORDER DATED 18 .01.2007 PASSED BY US AND DIRECT THE REGISTRY TO FIX IT FOR HEARING ON ME RITS, AT THE SOONEST. WE ORDER SO. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH DAY OF DECEMBER, 2012. SD/- SD/- MAHAVIR SINGH PRAMOD KUMAR (JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 28 TH DAY OF DECEMBER, 2012 COPIES TO : (1) THE ASSESSEE (2) THE DEPARTMENT (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.