State Bank of Patiala V. Commissioner of Income Tax, Patiala and Pr. Commissioner of Income Tax, Patiala

ITA/390/2011

AI Insights

The case involves multiple appeals by the State Bank of Patiala against the Commissioner of Income Tax, Patiala, concerning disallowances and deductions under various sections of the Income Tax Act, 1961. The primary issues included the disallowance under Section 14A related to securities held in stock, and the applicability of Section 41(4) read with 36(1)(vii) concerning the recovery of bad debts written off in earlier assessment years. The Tribunal had previously remanded some matters back to the Assessing Authority and declined to adjudicate others due to the absence of COD approval. The High Court's decision to remand the cases to the Tribunal was based on the legal precedents that dispensed with the need for COD approval in disputes involving public sector undertakings.

• Counselvise Citation: [] 140 COUNSELVISE.COM (IT) 821617 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 03-12-2025
• Assessment Year: misc
• Other Referred Cases: Principle CIT Vs. State of Patiala, Maxopp Investment Ltd. Vs. Commissioner of Income Tax, Electronics Corporation of India Ltd. vs. UOI and Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SAURABH KAPOOR; RANA GURTEJ SINGH; MUSKAAN GUPTA
• Assessee Lawyers: SANJAY BANSAL; GURDEEP SINGH; SUSHRUT SINGLA; IMAN SINGLA
• Keywords: Bad debts; Committee on Disputes; Disallowance; Remand
• Section: 14A; 36(1)(vii); 41(4)

Judgement Text

" IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** 203 ITA-390-2011 (O&M) Date of Decision: 03.12.2025 STATE BANK OF PATIALA ...Petitioner Vs. COMMISSIONER OF INCOME TAX, PATIALA …Respondent Sr. No. Case No. Petitioner(s) Respondent(s) 2. ITA-391-2011 (O&M) State Bank of Patiala, Patiala, Punjab The Commissioner of Income Tax, Patiala 3. ITA-392-2011 (O&M) State Bank of Patiala, Patiala, Punjab The Commissioner of Income Tax, Patiala 4. ITA-393-2011 (O&M) State Bank of Patiala, Patiala, Punjab The Commissioner of Income Tax, Patiala 5. ITA-394-2011 (O&M) State Bank of Patiala, Patiala, Punjab The Commissioner of Income Tax, Patiala 6. ITA-432-2015 (O&M) The Pr. Commissioner of Income Tax, Patiala State Bank of Patiala, The Mall, Patiala 7. ITA-439-2015 (O&M) The Pr. Commissioner of Income Tax, Patiala State Bank of Patiala, The Mall, Patiala 8. ITA-450-2015 (O&M) The Pr. Commissioner of Income Tax, Patiala State Bank of Patiala, The Mall, Patiala 9. ITA-462-2015 (O&M) The Pr. Commissioner of Income Tax, Patiala State Bank of Patiala, The Mall, Patiala CORAM:- HON'BLE MR. JUSTICE JAGMOHAN BANSAL HON'BLE MR. JUSTICE AMARINDER SINGH GREWAL Present:- Mr. Sanjay Bansal, Sr. Advocate with Mr. Gurdeep Singh, Advocate Mr. Sushrut Singla, Advocate and Mr. Iman Singla, Advocate for appellant-State Bank of Patiala Mr. Saurabh Kapoor, Advocate with Mr. Rana Gurtej Singh, Advocate and Ms. Muskaan Gupta, Advocate for respondent-Income Tax Department *** Printed from counselvise.com DEEPAK BISSYAN 2025.12.04 17:27 I attest to the accuracy and integrity of this document ITA-390-2011 (O&M) and connected cases -2- JAGMOHAN BANSAL, J. (ORAL) 1. As common issues are involved in the captioned petitions, with the consent of both sides, the same are hereby disposed of by this common order. 2. Three issues are involved in these appeals. First issue relates to disallowance under Section 14A of Income Tax Act, 1961 (for short ‘1961 Act’) on the securities held in stock. This issue stands settled by this Court in “Principle CIT Vs. State of Patiala”, (2017) 391 ITR 218 (P&H). The judgment of this Court stands affirmed by Hon’ble Supreme Court in “Maxopp Investment Ltd. Vs. Commissioner of Income Tax”, 2018 SCC Online SC 250. 3. The second issue relates to applicability of Section 41(4) read with 36(1)(vii) of 1961 Act with respect to recovery of bad debts which were written off in the earlier assessment years, however, deduction was not claimed. The Tribunal for the subsequent assessment years remanded the matter back to Assessing Authority which agreed with the stand of the assessee. 4. The Tribunal has declined to adjudicate four issues on the ground of absence of Committee on Disputes (for short ‘COD’) approval. Hon’ble Supreme Court vide judgment dated 17.02.2011 passed in “Electronics Corporation of India Ltd. vs. UOI and Ors.”, (2011) 3 SCC 404, has dispensed with requirement of COD approval in case of dispute between Public Sector Undertaking and State. The Tribunal was supposed to adjudicate issues raised by appellant even without approval of COD. Printed from counselvise.com DEEPAK BISSYAN 2025.12.04 17:27 I attest to the accuracy and integrity of this document ITA-390-2011 (O&M) and connected cases -3- 5. Learned counsel for the parties are ad idem with respect to aforestated factual and legal position and submit that matter may be remanded to Assessing Authority or Tribunal, as this Court deems fit, to pass fresh order in accordance with afore-stated legal/factual position. 6. In the wake of statement of both sides, we find it appropriate to remand all the appeals to Tribunal because Tribunal has not adjudicated four issues on the ground of absence of COD approval. Accordingly, all the appeals are allowed by way of remand to Tribunal which would pass fresh order in accordance with law. The parties would be free to raise all the arguments with respect to aforesaid issues before the Tribunal. 7. Pending application(s), if any, stands disposed of. (JAGMOHAN BANSAL) JUDGE (AMARINDER SINGH GREWAL) JUDGE December 03, 2025 Deepak DPA Whether Speaking/reasoned Yes/No Whether Reportable Yes/No Printed from counselvise.com DEEPAK BISSYAN 2025.12.04 17:27 I attest to the accuracy and integrity of this document "