Income Tax Appellate Tribunal - Hyderabad
Transmission Corpn. Of Ap Ltd. vs Asstt. Cit, Circle (2) on 24 February, 2005
Equivalent citations: [2005]97ITD171(HYD)
ORDER
J. Sudhakar Reddy, A.M. These Stay Petitions are filed by the above mentioned assessees. The assessees are Public Sector Undertakings/Corporation owned by Government of Andhra Pradesh. By this Stay Petition, the assessees seek stay of demand arising from the impugned assessment orders.
2. The preliminary issue that has come up for-consideration is whether this Bench of the Tribunal has the power to admit the case in view of the following judgments and the communication of the Hon'ble President in the case of AP State Civil Supplies Corpn. Ltd. :
(i) Oil & Natural Gas Commission v. CCE 1992 Suppl. (2) SCC 432 and Oil & Natural Gas Commission v. CCE (1995) Suppl. (4) SCC 541.
(ii) Mahanagar Telephone Nigam Ltd. v. Chairman, CBDI'(2004) 267 ITR 647 (SC).
(iii) State of Rajasthan v. ITA T (2003) 259 ITR 686 (Raj) and
(iv) Orders of ITAT in the case of Singareni Collieries Ltd. in ITA No. 307/Hyd./91 for AY 1995-96, dated 27-7-2003; ITA Nos. 496/Hyd/89, AY 82-83; 214/Hyd./91, AY 1983-84; 215/Hyd./91, AY 84-85; 216/Hyd./91, AY 85-86; 854/Hyd./91, AY 89-90 order dated 25-7-2003; ITA No. 221/Hyd./99, AY 96-97 order dated 12-2-2004, ITA No. 622/Hyd./99 AY, 1995-96 to 1997-98-order dated 11-5-2004.
3. The case of the assessees is that these Public Sector Undertakings are owned by the State Government and that the dispute between a Public Sector Undertakings of State Government and/or between departments of the State Government on the one side and departments of the Union Government on the other side do not fall within the jurisdiction of "Committee on Disputes" in Cabinet Secretariate and that no "Committee on Disputes" has been constituted to resolve or permit such dispute, either by the Central Government or the State Government, to enable the assessees to seek permission from them. Under these circumstances when an identical issue had come up before this Bench earlier, it was argued that what was contemplated by the Hon'ble Supreme Court in the case of Oil & Natural Gas Commission (supra) and in the case of Mahanagar Telephone Nigam Ltd. (supra) was disputes between the Public Sector Undertakings of the Central Government and the departments of the Union Government and that disputes between the Undertakings of the State Government and departments of the Union Government have not been contemplated and that in the judgment of the Hon'ble Supreme Court in the case of AP Chief Conservator of Forest v. Collector (2003) 3 SCC 472 what was contemplated was a "Committee on Disputes" for looking into the matters that arise between different limbs of State Government only and that the department of a State Government or/and a Public Sector Undertakings owned by the State Government, having disputes with a department of the Government of India, was not considered by the Hon'ble Supreme Court. They submitted that the order of ITAT in the case of Singareni Collieries Ltd. (supra) which was in line with the judgment of the Rajasthan High Court requires re-consideration and that a special Bench of the Tribunal has to be constituted.
4. The learned Departmental Representative contended that this Bench of the Tribunal has already taken a view on the matter by following the judgment of the Hon'ble Rajasthan High Court and that it cannot deviate from its earlier view.
5. Rival contentions heard. We have carefully considered the arguments as well the case laws on the subject. For ready reference, we feel that it would be useful to extract the judicial pronouncement on the issue :
The Hon'ble Supreme Court of India :
(a) In the case of Oil & Natural Gas Commission v. CCE 1992 Suppl. (2) SCC 432 :
"The court has no more than one occasion pointed out that Public Sector Undertakings of Central Government and the Union of India should not fight their litigations in court by spending money on fees of counsel, court fees, procedural expenses and wasting public time. Courts are maintained for appropriate litigations.
Court's time is not to be consumed by litigations which are carried on either side at public expenses from the source. Notwithstanding these observations repeated on a number of occasions, the present cases appear to be an instance of total callousness. The letter of 3-10-1988 indicated that the Cabinet Secretary was looking into the matter. That has not obliviously been followed up. As an instance of wasting public time and energy this matter involves a principle to be examined at the highest level.
(b) In the case of Oil & Natural Gas Commission v. CCE 1995 Suppl. (4) SCC 541 :
"We direct that the Government of India shall set up a Committee consisting of Representatives from the Ministry of Industry. The Bureau of Public Enterprises and the Ministry of Law, to monitor disputes between Ministry and Ministry of Government of India, Ministry and Public Sector Undertakings of the Government of India and Public Sector Undertakings in between themselves, to ensure that no litigation comes to the court or to the Tribunal without the matter having been first examined by the Committee and its clearance for litigation Government may include a representative of the Ministry concerned in a specific case and one from the Ministry of Finance in the Committee. Senior Officers only should be nominated so that the Committee would function with status, control and discipline.
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. [Emphasis Italicised in Print Supplied] The Committee shall function under the ultimate control of the Cabinet Secretary but his delegate may lookafter the matters. This court would expect a quarterly report about the functioning of this system to be furnished to be Registry beginning from 1-1-1992.
Our direction may be communicated to every High Court for information of all the courts subordinate to them." (Emphasis supplied)"
(c) 78 ELT Page T37-C.B.E. & C Circular No. 27/94-CX., dated 2-3-1994-Settlement of Disputes between a Government department and Public Sector Undertakings :
"Reference to this Sect. O.M. No. 533691-Cab., dated 31-12-1991 whereby a Committee was constituted to give clearance to the disputes between a Government department and another and one Government department and a Public Sector Enterprises and Public Enterprises themselves, before these are agitated in a court Tribunal. The Hon'ble Supreme Court had an occasion to go into the working of the Committee in the Civil Appeal Nos. 2058-59 of 1988(I.A. Nos. 3 & 4 of 1992) between Oil & Natural Gas Commission v. Collector of Central Excise and has further directed vide its order dated 7-1-1994.
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2. In view of the directions of the Hon. Supreme Court mentioned above, it is requested that the Ministry, department of Government of India and Public Sector Undertakings should refer the dispute to the Committee in a self-contained note. It is also requested that while forwarding the requisite note (15 copies) to this Secretariat, the note may also be circulated to the members of the Committee viz, Secretary, department of Industrial Development, Secretary, department of Public Enterprises, Secretary, department of Legal Affairs, Finance Secretary, Secretary of the Administrative Ministry/department of Public Sector Undertakings and Chief Executive of the concerned Public Sector Undertakings viz Public Sector Undertakings which are parties to the dispute or concerned in that matter.
3. The foregoing instructions may be brought to the notice of all concerned for guidance and strict compliance."
(d) In the case of AP Chief Conservator of Forest's case (supra) Article 131Disputes Between Gover,nment department cannot be contested in court :
"Under the scheme of the Constitution, article 131 confers original jurisdiction on the Supreme Court in regard to a dispute between two States of the Union of' India or between one or more States and the Union of India. It was not contemplated by the Iranters of the Constitution or CPC that two departments of a State or the Union of India will fight a litigation in a court of law. It is neither, appropriate nor permissible for two departments of a State or the Union of Indica to fight litigation in a court of law. Indeed, such a course cannot but be detrimental to the public interest as it also entails avoidable wastage of public money and tinie. Various departments of the Govt. are its limbs and, therefore, they must act in coordination and not in confrontation. Filing of a writ petition by one department against the other by invoking the extraordinary jurisdiction of the High Court is not only against the propriety and polity as it smacks of indiscipline but is also contrary to the basic concept of law which requires that for suing or being sued, there must be either a natural or a juristic person. The States/Union of India must evolve a mechanisin to set at rest all interdepartmental controversies the level of the Government and such matters should not be carried to a court of law for resolution of the controversy. The facts of the present case make out a strong case that there is a felt need of setting up of committees by the State Government also to resolve the controversy arising between various departments of the State or the State and any of its undertakings. It would be appropriate for the State Governments to set up a committee consisting of the Chief Secretary of the State, then Secretaries of the departments concerned, the Secretary of the law and where financial commitments are involved, the Secretary of Finance. The decision taken by such a committee shall be binding on all the departments concerned and shall be the stand of the Government. (Emphasis supplied)
(e) In the case of Mcihanagar Telephone Nigam Ltd. (supra) :
"Held that as the High Powered Committee had not given clearance to the appellant, the proceedings could not be proceeded with. The High Court was wrong in dealing with the merits of the matter and the Supreme Court would not examine whether the High Court was right on the merits.
Held also, that the appellant wanted to approach the court only against a show cause notice and it was settled law that against a show cause notice litigation should not be encouraged. The High Powered Committee merely emphasized the well settled position. Its decision was eminently fair and correct and its purpose was to prevent frivolous litigation. No right of the appellant was affected." (Emphasis supplied)
(f) The Hon'ble Rajasthan High Court in the case of State of Rajasthan's case (supra) held that "in the case of Oil & Natural Gas Commission v. CCE (1991) 4 JT 158, their lordships of the Supreme Court held that a petition by one department against another Public Sector Undertaking or State does not lie to the High Court unless certificate for filing the same has been given by the High Level Committee constituted by the Government. The Apex Court has observed that inter se dispute of the State Government on the one side and the Central Government,it on the other side directly should not come to the court for its resolution. For resolution ol their inter se disputes a high power committies to be constituted." (Emphasis supplied)
(g) Further, the Hon'ble Prime Minister of India Dr. Manmohan Singh while addressing a conference of Chief Justices and Chief Ministers on 18-9-2004 at Vigyan Bhawan, New Delhi, stated (Excise Law Times Vol. 171 Page A191) "that the Government would ensue that disputes between the Central and Public Sector Undertakings and among Public Sector Undertakings are resolved amicably without burdening the courts".
Citing a sample survey conducted in Karnataka. The Prime Minister said Government litigation accounted for 65 per cent of the civil litigation in the form of appeals and that 95 per cent of the appeals failed as they should not have filed.
Singh promised to enforce a 1994 resolution taken by the then Congress Government to the effect that "disputes between the Government and PSUs, and one PSU and another do not go to Courts or Tribunals, and that such disputes be settled between the parties amicably."
6. The above decision, of the Hon'ble Rajasthan High Court which pertain to a dispute between an arm of the State Government and the Income Tax Department was followed and applied by this Bench of the Tribunal in the case of Singareni Collieries Ltd. in ITA No. 307/M/91 for AY 1995-96, dated 27-7-2003; ITA Nos. 496/Hyd./89, AY 1982-83; 214 (Hyd) 191, AY 1983-84;215(Hyd)/91;AY 1984-85;216(Hyd)/91, AY 1985-86;854/Hyd./91,AY 1989-90-order dated 25-7-2003; ITA No. 221/Hyd./99, AY 1996-97-order dated 12-2-2004;ITA No. 622/Hyd./99,AY 1995-96 to97-98-order dated 11-5-2004.
7. Upon hearing the rival submissions, on an earlier occasion when the matter came for hearing, the Bench of the Tribunal was contemplating as to whether the issue is to be referred to a Larger Bench by placing the facts before the Hon'ble President or as to whether the Bench can follow its own order in the case of Singareni Collieries (supra). The Bench had in fact formulated a question for being placed before the Hon'ble President. In the meanwhile, it has come to the notice of this Bench that in the case of AP State Civil Supplies Corpn. Ltd., which is another State Government Public Sector Undertaking, a petition was made directly by the assessee to the Hon'ble President of ITAT for constitution of a Special Bench on 20-11-2004. The Hon'ble President's decision was communicated by the Registrar vide letter dated 23-11-2004 to AP Civil Supplies Corpn Ltd. wherein he observed that when a decision of a Hon'ble High Court was available on the point, it is not appropriate on the part of the ITAT to constitute a Special Bench as in other words, it would amount to review of the judgment of the Hon'ble Rajasthan High Court. The request of the assessee, i.e., AP State Civil Supplies Corpn. Ltd., for constitution of Special Bench, was rejected by the Hon'ble President, ITAT. In the light of the subsequent developments, the recommendation of this Bench seeking approval of the Hon'ble President for constitution of a Larger Bench on the same issue has to be viewed. As on date this Bench is bound to follow its view taken in the case of Singareni Collieries (supra) wherein it applied the judgment of the Hon'ble Rajasthan High Court.
8. It is also brought to our notice that AP State Civil Supplies Corpn. had made yet another request directly vide letter dated 23-11-2004 to the Hon'ble President of ITAT despite his earlier observation, to constitute Larger Bench on the same issue on similar ground. On both the occasions AP State Civil Supplies Corpn. Ltd. chose not to favour this Bench with at least a copy of its petition made to the Hon'ble President, despite being aware of the situation.
9. Be that as it may, M/s. AP State Civil Supplies Corpn. had written in the meanwhile to the "Committee on disputes", Cabinet Secretariat for permission to peruse their appeals in Hyderabad Bench of ITAT. The Cabinet Secretariat vide letter dated 2-2-2005 to AP State Civil Supplies Corpn. Ltd., stated as follows :
"I am directed to refer to your letter dated 10-11-2004 on the above mentioned subject and to say that as M/s. Andhra Pradesh State Civil Supplies Corpn. Ltd. is not a Public Sector Under takings of Government of India, disputes pertaining to your company does not fall within the jurisdiction of the Committee on Disputes in Cabinet Secretariat.
2. Copies of the notes received for consideration of the Committee are therefore returned herewith.
3. However, you may approach the office of Chief Secretary of your State who has been advised inter alia by the D/o Legal Affairs, GOI to resolve similar dispute resolution mechanism (in the pattern of the Committee on Disputes) in compliance of the orders of the Hon'ble Supreme Court in the case of dispute between Chief Conservator of Forest Government of AP (appellant) and the Collector and others (respondent) in CA Nos. 8580 of 1994 and 9097 of 1995 order dated 18-2-2003). The Hon'ble Supreme Court has reiterated the above cited verdict in the, case of MTNL (appellant) v. Chairman, CBDT (respondent) in CA No. 3058 of 2004 order passed on 7-5-2004 vide pages 2 and 3 (in which the direction given at paras 14 and 15 in the case of'AP Chief Conservator of Forests and Collector and others was stated supra). A copy of the letter No. 32(2) 2004-Judl., dated 30-11-2004 issued by D/o Legal Affairs is enclosed herewith for ready reference and for taking further necessary action as deemed appropriate."
10. The circular of Ministry of Law and Justice No. F 32(2)/2004-Judl., dated 30-11-2004 reads as under :
"I am directed to draw attention towards the observations made by the Hon'ble Supreme Court in para 15 of its judgment in the case of Chief Conservator of Farests v. Collector reported in (2003) 3 SCC 472 which is reproduced in the Supreme Court judgment dated 7-5-2004 (copy enclosed) delivered in Civil Appeal No. 3058 of 2004 in the case of Mahanagar Telephone Nigam Ltd. v. Chairman, Central Board of Direct Taxes and to request to take necessary action in terms of the observations of the Hon'ble Supreme Court."
Considering the proposition laid down by the Supreme Court and the pronouncements of the Hon'ble Prime Minister of India and the Cabinet Secretariat view on the issue, we have to examine whether this Bench can admit this appeal or not, without necessary clearance from the "Committee on Disputes", which is yet to be constituted.
11. The Hon'ble Supreme Court has time and again reiterated that the litigation between different limbs of Governments should not be taken to court. The views of the Hon'ble Prime Minister based on a resolution of 1994, is that an alternate dispute resolution mechanism is to be set up. The Committee is supposed to be an arbitration and reconciliation mechanism and not a licensing authority for litigation. The object is to settle the disputes between these parties amicably and not just to decide as to whether they should be permitted to fight or not. The object is to avoid waste of public money and time.
12. Contention of the appellant is that the assessees are Public Sector Undertakings owned by the State Government and not by the Central Government and that the decision of the Supreme Court does not apply to them has to be viewed also from the definitions under the Income Tax Act and under the Companies Act :
Section 2(36A) of Income Tax Act, 1961 : "Public Sector Company" means any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956) "Section 617.Definition of Government company.For the purposes of this Act Government company means any company in which not less than fifty one per cent of the paid up share capital is held by the Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company as thus defined."
Thus, under the Income Tax Act as well as the Companies Act, no distinction is made between a company owned exclusively or partly by the Central Government and companies owned exclusively or partly by the State Government. In fact, all these companies either owned by the Central Government or by the State Government partly by one or partly by other are governed under section 618 to section 620 of the Companies Act and are all Public Sector Companies under the Income Tax Act. In the face of these definitions, we are unable to accept the contention of the appellants that these assessees are not Public Sector Undertakings as contemplated by the Hon'ble Supreme Court.
13. In this view of the matter, we have to decide as to whether these assessees have to obtain clearance from the "Committee on Disputes" and that the Central Government or the State Government jointly have to abide by the decision of the Supreme Court and constitute such an appropriate Committee to resolve the dispute. The learned counsel for the assessee pleaded that the Public Sector Companies are placed at a disadvantageous position as compared to Private Sector companies in free market economy as they have to obtain clearance to defend them-selves against huge tax demands. Yet another licensing authority is created as the "Committee on disputes" is never acting as a settlement and reconciliating authority, but just a high power permitting authority.
14. It may not be out of place to take notice that what is contemplated in the resolution of 1994, referred to by the Hon'ble Prime Minister Dr. Manmohan Singh, is an alternate arbitration and reconciliation mechanism; amicable settlements are contemplated and it is not expected that the "Committee on Disputes" remains just a litigation permitting/Licensing authority. It is for these limbs of Government to turn this resolution of 1994 into an opportunity and resolve issues faster than that of Private Sector. We note that the Authority for Advance Rulings (Chapter XIX-B Section 245N; Section 245-0, Section 245P; Section 215Q; Section 215R; Section 245RR; Section 245S; Section 245T; Section 245U and Section 245V) which is headed by a retired Supreme Court Judge, is now given the jurisdiction to give advance ruling in cases of Public Sector Undertakings also. For ready reference, we extract Section 245N and Section 245-0 of the Income Tax Act.
"Section 245N.In this Chapter, unless the context otherwise requires
(a) 'advance ruling'means
(i) a determination by the Authority in relation to a transaction which has been undertaken or is proposed to be undertaken by a non-resident applicant; or
(ii) a determination by the Authority in relation to the tax liabilitv of a-non-resident arising out of a transaction which has been undertaken or is proposed to be undertaken by a resident applicant with such non-resident, and such determination shall include the determination of any question of law or of fact specified in the application;
(iii) a determination or decision by the Authority in respect of an issue relating to computation of total income which is pending before any income-tax authority or the Appellate Tribunal and such determination or decision shall include the determination or decision of any question of law or of fact relating to such computation of total income specified in the application :
Provided that where an advance ruling has been pronounced, before the date on which the Finance Bill, 2003 receives the assent of the President, by the Authority in respect of an application by a resident applicant referred to in sub-clause (ii) of this clause as it stood immediately before such date, such ruling shall be binding on the persons specified in section 245S;
(b) 'applicant' means any person who
(i) is a non-resident referred to in sub-clause (i) of clause (a); or
(ii) is a resident referred to in sub-clause (ii) of clause (a); or
(iii) is a resident falling within any such class or category of persons as the Central Government may, by notification in the Official Gazette, specify in this behalf; and
(iv) makes an application under sub-section (1) of section 245Q;
(c) 'application' means an application made to the Authority under sub-section (1) of section 245Q;
(d) 'Authority' means the Authority for Advance Ruling constituted under section 245Q;
(e) 'Chairman'means the Chairman of the Authority;
(f) 'Member' means a Member of the Authority and includes the Chairman.
Section 245Q-Authority for advance rulings-(1) The Central Government shall constitute an Authority for giving advance rulings, to be known as 'Authority for Advance Rulings'.
(2) The Authority shall consist of the following Members appointed by the Central Government, namely :
(a) a Chairman, who is a retired Judge of the Supreme Court;
(b) an officer of the Indian revenue Service who is qualified to be a Member of the Central Board of Direct Taxes;
(c) an officer of the Indian Legal Service who is, or is qualified to be, an Additional Secretary to the Government of India.
(3) The salaries and allowance payable to, and the terms and conditions of service of the Members shall be such as may be prescribed.
(4) The Central Government shall provide the Authority with such officers and staff as may be necessary for the efficient exercise of the powers of the Authority under this Act.
(5) The office of the Authority shall be located in Delhi.
245RR. No income-tax authority or, the Appellate Tribunal shall proceed to decide any issue in respect to which an application has been made by an applicant, being a resident, under sub-section (1) of section 245R.
Notification 725(E) section(s) Referred-section 245N(b)(iii) date of issue 3-8-2000 (Notification No. 11456/P. No. 142/37/2000-TPL) 'In exercise of the powers conferred by sub-clause (iii) of clause (b) of section 245N of the Income Tax Act, 1961 (43 of 1961), and in supersession of Notification No. S.O. 473(3), dated 21-6-1999, the Central Government hereby specifies public sector companies as defined in clause (36A) of section 2 of the Income Tax Act being such class of persons, as applicant for the purposes of Chapter XIX-B of the Income Tax Act.
2. It shall come into force on the date of its publication in the Official Gazette.' The Authority for Advance Ruling is statutorily required as per section 245(R)(6) to pronounce its ruling within 6 (six) months. Can the regular channel of Tribunal, High Court and Supreme Court be faster ? It is definitely not so. It is for the Public Sector to take advantage of this Chapter XIX-B.
15. The proposition that limbs of the State Government can litigate with limb of the Central Government cannot be accepted by us, as it is against the spirit of the judgments of the Hon'ble Supreme Court as well as against the professed policy of the Government of India which is laid down by way of a resolution in the year 1994 and by way of a statement of policy by the Hon'ble Prime Minister in the conference of the Chief Ministers and Chief Justice on 18-9-2004.
16. As the position stands as on date, this Bench of the Tribunal has to necessarily follow the decision of the Coordinate Bench in case of Singareni Collieries and hold that this Bench does not have the power to proceed in this matter in view of the judgment of the Supreme Court in the cases of Oil & Natural Gas Commission (supra) and Mahanagar Telephone Nigam Ltd. (supra).
17. We also notice that no prejudice is caused to the assessees, but for this stoic cognitive dissonance to the view of the Apex Court and the Hon'ble Prime Minister, in the light of the decision of the ITAT Delhi Bench 'D' in the case of Indian Airlines v. Asstt. CIT (1995) 53 ITD 121 at pages 127 and 129 (paras 14 & 15) wherein the Bench held as follows :
"14. In order to give effect to aforesaid directions of Hon'ble Supreme Court, the Cabinet Secretariat has been issuing memoranda explaining procedure to be followed for settlement of disputes between different departments of Government and between a depart of Government and a Public Sector Undertaking of Central Government. One such memorandum was issued on 24-1-1994. In the said memorandum, the Secretariat has once again referred to abovementioned directions of Supreme Court and also directions dated 7-1-1994 relating to working of the High Power Committee. In para (i) of the Memorandum, it has been stated that all pending matters before any court or Tribunal should be referred by the appellant or the petitioner to the High Power Committee within one month from 7-1-1994. In para (ii), it is stated that there should be no bar to the lodging of an appeal before any court or Tribunal so as to save limitation but before such filling every endeavour should be made to have the clearance from the Committee. In the next para (iii) which is relevant for our purpose, it is provided as under :
(iii) Whenever appeals/petitions etc., are filed without the clearance of the High Power Committee, so as to save limitation, the appellant or the petitioner, as the case may be shall within one month from such filing, refer the matter to the High Power Committee, with prior notice to the designated authority in Cabinet Secretariat (Under-Secretary (Co-ordination)) authorized to receive notices in that behalf. The reference shall be deemed to have been made and become effective only after the notice of the reference is lodged with the Under-Secretary (Co-ordination) in the Cabinet Secretariat. The reference shall be deemed to be valid if made in the case of Union of India by its Secretary. In the Ministry of Finance, department of revenue and in the case of Public Sector Undertakings by its Chairman, Managing Director or Chief Executive, as the case may be. It is only such reference to the Committee is made in the manner indicated that the operation of the order or proceedings under challenge, shall be suspended till the committee resolves the dispute or gives clearance to the litigation. If the High Power Committee is unable to resolve the matter for reasons to be recorded by it, it shall grant clearance from the litigation.
It is thus clear that the Central Government is making all endeavour to resolve litigation between a Government department and a Public Undertaking through the High Power Committee. It has also been provided that where a reference is made in the manner indicated in the circular, "the operation of the order or proceeding under challenge shall be suspended till the Committee resolves the dispute or gives clearance to the litigation." The aforesaid office memorandum cannot be taken lightly. It has to be kept in mind that report of the Cabinet Secretary became part of the decision of Hon'ble Supreme Court on which further directions were issued. The High Power Committee has been set up as per the directions of Hon'ble Supreme Court and the working of the Committee is being reviewed by the Hon'ble Court from time to time. Where a reference is made to above Committee in the manner indicated, the operation of the order or proceeding under challenge is automatically suspended till appropriate ordcr is passed by the Committee. Having regard to aforementioned circumstances it is not permissible or possible for any department of the Government of India to contend that operation of his order or proceeding taken by him is not suspended in spite of reference of dispute to the High Power Committee. In the present case, the appellant has filed sufficient evidence before us to show that the appellant moved Cabinet Secretariat on 25-1-1995 in accordance with Circular dated 24-1-1994 and, therefore, a reference to the committee in the maniier indicated in the above letter relating to action of the assessing officer under section 201(1) and 201(1A) of the Income Tax Act, is deemed to be pending with High Power Committee. Therefore, operation of the order or proceeding relating to recovery of demand has to be taken as suspended. The proposition was put to learned Departmental Representative during the course of hearing of stay application and he was asked as to how the revenue can proceed with recovery of demand after reference to the High Power Committee was made on 25-1-1995. No satisfactory reply could be given by the learned Departmental Representative.
15. Having regard to the clear provision of Circular dated 24-1-1994 suspending operation of order under challenge with the High Power Committee, there is no need, in our opinion, to pass any stay order relating to recovery of demand disputed in reference before the High Power Committee. There is nothing before us to indicate that assessing officer or other officers of the department would act in defiance of assurances of Cabinet Secretary and directions of Hon'ble Supreme Court and in spite of pending reference before the High Power Committee, the demand in dispute would not be treated as suspended after 25-1-1995. Therefore, it is not necessary for us as at present, to pass any order of stay in this case. The orders of the assessing officer are treated as suspended unless High Power Committee decides otherwise. We hope that both the parties would approach the High Power Committee for resolving the issue expeditiously. The appellant or the revenue can approach this Appellate Tribunal if so warranted by future events and facts and circumstances of the case. With the aforesaid observations, the stay applications of the appellant are treated as infructuous and are filed.
During the course of hearing, learned Representatives of both the parties requested the Bench that DASTI copies of order be given to them on 31-1-1995. This request is accepted and Registry is directed to give copies to the parties as prayed, in accordance with rules.
18. In the light of the ratio laid down by the ITAT Delhi Bench 'D' in the case of Indian Airlines (supra), we find that no prejudice is caused to the assessees, inasmuch as, if a mere application is made by them to the Committee on Disputes, all proceedings under challenge shall be suspended till the Committee resolves the dispute or gives clearance to the litigation. In our considered view these Public Sector Undertakings, instead of sitting on issue of prestige and refusing to even apply to "Committee on Disputes" or moving the Central Government/State Government to constitute a "Committee on Disputes" for resolving the issues as directed by the Supreme Court, which would result in automatic stalling of all proceedings under challenge, are unnecessarily agitating before this Bench, to admit the appeal and grant stay in their favour, when in reality as per the Supreme Court judgments as interpreted by the ITAT Delhi 'D' Bench in the case of Indian Airlines, the suspension of proceedings is in fact in the hands of the assessees themselves. Similar is the situation, if they approach the Authority for Advanced Ruling as per section 245RR of the Income Tax Act. Chapter XIX-B of the Income Tax Act is not being availed by the assessee.
19. In the result, we apply the decision of the Hon'ble Supreme Court in the cases of Oil & Natural Gas Commission (supra) and Mahanagar Telephone Nigam Ltd. (supra) and the decision of the Hon'ble Rajasthan High Court in the case of State of Rajasthan (supra) and hold that. This Bench does not have the power or authority to admit these appeals in the absence of clearance as contemplated by the Supreme Court. As we are unable to admit these appeals at this stage, no stay can be granted. Thus, we have to necessarily dismiss these Stay Petitions in limine.