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Income Tax Appellate Tribunal - Delhi

Itdc Ltd, New Delhi vs Department Of Income Tax on 23 September, 2009

                   IN THE INCOME TAX APPELLATE TRIBUNAL
                         DELHI BENCH : C : NEW DELHI

               BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER
                                  AND
                SHRI B.C. MEENA, ACCOUNTANT MEMBER

                             ITA No.4494/Del/2009
                          Assessment Year : 2002-03

ACIT,                                  Vs.   M/s ITDC Ltd.,
Cir.11 (1),                                  Core -8, 6th Floor, Scope Complex,
New Delhi.                                   Lodhi Road,
                                             Institutional Area,
                                             New Delhi.

                                             PAN : AAAC10825J

     (Appellant)                                (Respondent)

              Assessee by          :    Shri Naresh Kumar Gulati, Sr.Manager
              Revenue by           :    Shri Sanjay Awasthi, Sr. DR


                                       ORDER

PER I.P. BANSAL, JUDICIAL MEMBER

This is an appeal filed by the revenue. It is directed against the order of the CIT (A) dated 23rd September, 2009 for assessment year 2002-03. The only effective ground of appeal taken by the revenue is with regard to deletion of a sum of Rs.64.74 lac on account of unlinked creditors.

2. Ld. CIT (A) has deleted the said addition on the ground that the addition is made on the basis of assessment order for assessment year 2003-04 which was deleted vide his order dated 23rd August, 2006. The department had sought permission to file appeal against the said order of CIT (A) vide which similar addition was deleted and the permission to file further appeal was not accorded to the revenue and, in this manner, the addition was deleted by the CIT (A).

3. At the time of hearing it was found that the department has not placed on record the approval of COD to contest the present appeal as the Respondent in the present case is a Govt. of India Undertaking. Earlier also on 27th January, 2010 the department was required to submit the approval from COD which till date has not been furnished. According to the decision of Hon'ble Supreme Court in the case of Oil & Natural Gas Commission & Another v. Commissioner of Central Excise, 104 CTR SC 31 it is obligatory on every court and every Tribunal where dispute between public sector undertaking and department is raised to demand a clearance from Committee in case it has not been so pleaded and in the absence of clearance, the proceedings would not be proceeded with. It will be relevant to reproduce following observations of their Lordships from the said decision:-

"It shall be the obligation of every Court and every Tribunal where such a dispute is raised hereafter to demand a clearance from the Committee in case it has not been so pleaded and in the absence of the clearance, the proceedings would not be proceeded with."

4. The stand was reiterated by the Hon'ble Supreme Court in the case of Mahanagar Telephone Nigam Ltd. v. Chairman, CBDT, [2004] 267 ITR 647(SC) as per the following observations:-

"In this case, this is absolutely what has happened. The appellants wanted to approach the Court only against a show cause notice. It is settled law that against a show cause notice litigation should not be encouraged. The decision of the High Powered Committee, set out hereinabove, merely emphasizes the well-settled position. It is an eminently fair and correct decision. The purpose of the decision was to prevent frivolous litigation. No right of the appellants is being affected. It has been clarified that the appellants could move a Court of law against an appealable order. By not maintaining discipline and abiding by the decision, the appellants have wasted public money and time of the Courts. The clarificatory order, relied upon by Mr. Andhyarujina, clarifies in para 5 as to what is to happen if clearance is not given by the Committee. It is set out that, in the absence of the clearance, the proceedings must not be proceeded with. This position is further clarified in Chief Conservator of Forests' case where again this Court has held that the decision taken by 3 ITA No.4494/Del/2009 such a Committee is binding on all Departments concerned and it is the stand of the Government.

In view of this settled law, which is binding on us, we hold that, as clearance has not been given to the appellants, these proceedings cannot be proceeded with. The High Court was wrong in dealing with the merits of the matter. We, therefore, do not examine whether the High Court was right on merits. The appeal accordingly stands disposed of with no order as to costs."

5. No such approval from COD has been furnished by the Department, therefore, in the absence of clearance from COD the appeal filed by the Department cannot be proceeded with. As such, this appeal is dismissed for want of clearance from COD. We may observe that if later on in case the Department is able to obtain clearance from COD it may approach the Tribunal for revival of this appeal. With these observations the appeal is dismissed.

6. In the result, the appeal is dismissed.

.

The order pronounced in the open court on 16.07.2010.

                    Sd/-                                     Sd/-
          [B.C. MEENA]                               [I.P. BANSAL]
      ACCOUNTANT MEMBER                            JUDICIAL MEMBER

Dated, 16th July, 2010.

dk

Copy forwarded to: -
1.    Appellant
2.    Respondent
3.    CIT
4.    CIT(A)
5.    DR, ITAT
                                  TRUE COPY

                                                                        By Order,


                                                                Deputy Registrar,
                                                             ITAT, Delhi Benches