THE COMMISSIONER OF INCOME TAX,TVM V. STATE BANK OF TRAVANCORE,TVM

ITA/126/2009

AI Insights

The case involves appeals by the Commissioner of Income-Tax, Trivandrum against the State Bank of Travancore concerning the disallowance of provision for bad debt. Initially, the appeals were held up due to the requirement of approval from the Committee on Disputes (CoD), which was not obtained. However, a Supreme Court judgment recalled earlier judgments constituting CoD, leading to the decision that the appeals should be considered on merits without CoD approval. The main legal issue was whether the provision for bad debt claimed by the assessee was allowable under the Income Tax Act, which was resolved by referencing a Full Bench judgment.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 744339 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 16-03-2011
• Assessment Year: misc
• Other Referred Cases: CIT V. SOUTH INDIAN BANK LTD., 326 ITR 174 (Ker.)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P BALAKRISHNAN
• Assessee Lawyers: JOSE JOSEPH
• Keywords: Committee on Disputes; Full Bench Judgment; Income tax appeal; Provision for Bad Debt
• Section: 260A

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY WEDNESDAY, THE 16TH MARCH 2011 / 25TH PHALGUNA 1932 ITA.No. 126 of 2009() --------------------- ITA.465/COCH/1998 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISIONER OF INCOME-TAX TRIVANDURUM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): APPELLANT ------------------------ STATE BANK OF TRAVANCORE, TRIVANDRUM. ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 16/03/2011 ALONG WITH ITA NOS. 192 & 229 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR, & BHABANI PRASAD RAY, JJ. -------------------------------------------- I.T.A. Nos. 126, 192 & 229 of 2009 -------------------------------------------- Dated this the 16th day of March, 2011 JUDGMENT Ramachandran Nair, J. When these appeals were taken up for hearing counsel for the respondent-Bank submitted that Committee on Disputes' approval is not so far obtained by the revenue which has filed the appeals. These cases were once referred to the Full Bench for decision on the issue raised on merits. However, Full Bench decided the issues referred in respect of other assessees and sent back these cases to the Division Bench for hearing by order dated 15.12.2009. However, at that time requirement of approval by CoD was required and therefore it was mentioned that CoD approval will be produced by the revenue before the Division Bench. When the appeals were taken up today, standing counsel referred to the judgment of the Supreme Court in Civil Appeal No. 1883 of 2011 whereunder the Supreme Court has recalled all the judgments based on which CoD was constituted and approval was being granted. Counsel for the respondent-assessee submitted that ITA 126, 192 & 229/2009 2 since these appeals were filed prior to the above judgment of the Supreme Court, appeals should not be entertained without clearance from CoD. However, besides vacating earlier judgments constituting CoD for the purpose of granting approval, the Supreme Court does not state whether clearance from CoD is required in respect of pending cases or not. The main reason for the Supreme Court to recall earlier judgments is the failure of the CoD in exercising their powers in an even manner, leading to denial of approval to eligible cases and at the same time granting of the same in similar cases. So much so, we feel at least in respect of appeals pending before this Court, this Court should consider the appeals on merits and appeals should not be dismissed for want of approval from CoD. Moreover what we find is that these appeals are filed under Section 260A of the I.T. Act, where jurisdiction of the High Court is limited to interfering with finding on substantial question of law. Admittedly in these cases question raised is a substantial question of law, and therefore these were referred to Full Bench and the matter now stands decided by the Full Bench judgment. Following the judgment of the Full Bench in CIT V. SOUTH INDIAN ITA 126, 192 & 229/2009 3 BANK LTD., 326 ITR 174 (Ker.) we answer the questions referred in favour of the revenue and against the assessee and allow the appeals by reversing the orders of the Tribunal and confirming disallowance of provision for bad debt claimed by the respondent-assessee to the extent it was against the judgment of the Full Bench. However modification if required will be made in the assessment to make the disallowance in tune with the judgment of the Full Bench. Therefore there will be direction to the assessing officer to consider the disallowance after giving opportunity to the assessee as well. (C.N.RAMACHANDRAN NAIR) Judge. (BHABANI PRASAD RAY) Judge. kk ITA 126, 192 & 229/2009 4 "