Commissioner Of Income Tax Chennai v. M/S Tamilnadu Electricity Board

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 25.08.2008 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Appeal) No.1380 of 2008 Commissioner of Income TaxChennai..Appellant/Appellantv.M/s Tamilnadu Electricity BoardNo.800, NPKRR MaligaiElectricity AvenueAnnasalaiChennai 2..Respondent/Respondent Tax Case Appeal filed under section 260A of the Income TaxAct, 1961 against the order of the Income Tax Appellate Tribunal,Madras 'C' Bench, Chennai, dated 28.02.2008 passed in ITANo.1639/Mds/2006, against the order dated 10.3.2006, made in ITANo.360/2005-06/A-III, on the file of the Commissioner of Income Tax(Appeals), III, Chennai-34, against the Assessment order dated3.12.2002, for the Assessment year 2002-2003, passed by the DeputyCommissioner of Income Tax, Company Circle III(1), Chennai-34. For appellant : Mr.J.NarayanaswamyJUDGMENT(Judgment of the Court was delivered byK.RAVIRAJA PANDIAN, J.) This appeal is filed against the order of the Income TaxAppellate Tribunal, Madras 'C' Bench, Chennai, dated 28.02.2008passed in ITA No.1639/Mds/2006. 2. The assessee is the Tamilnadu Electricity Board, whichhad come into existence through an enactment. For the assessment https://hcservices.ecourts.gov.in/hcservices/ year 2002-2003, the assessee filed loss returns without auditreport under Section 44AB and the said return was consideredinvalid by order dated 30.10.2002. The assessee filed a 264petition to the Commissioner of Income Tax Appeals and the same wasdismissed on 08.12.2003. Subsequently, the assessee filed arevised return admitting additional loss along with 44AB report.Since the original return was treated as non est, the revisedreturn was treated as a belated return and accordingly did notallow carry forward of losses and unabsorbed depreciation. 3. Aggrieved against the assessment order, the assesseefiled appeal to the Commissioner of Income Tax (Appeals), whoallowed the appeal holding that the revised return admittingadditional loss along with 44AB report was a valid return anddirected the carry forward of losses and unabsorbed depreciation. 4. Aggrieved against the order of the CIT(A), the revenuetook the matter on appeal to the Tribunal. The Tribunal found thatrevised return was filed within the time limit given under Section139(5) and the said revised return stands substituted by therevised return and the same is valid since it was filed along withthe 44AB report and accordingly the carry forward of losses andunabsorbed depreciation were rightly directed to be allowed by CIT(A). 5. The correctness of the said order is now canvassedbefore this Court by filing this appeal by formulating thefollowing substantial questions of law: " 1. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding thatthe revised return filed within the time limitgiven under section 139(5) along with the 44ABreport is valid and not belated return as persection 139(1) and accordingly the carry forwardof losses and unabsorbed depreciation isallowable as per section 80 of the IT Act? 2. Whether the original return wasconsidered invalid by assessing officer for wantof 44AB report and assessee's petition undersection 264 was dismissed by CIT and had becomefinal, was the Tribunal right in not settingaside the order of the CIT(A), which admitted theappeal of the assessee on same issue?". 6. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. " 1. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding thatthe revised return filed within the time limitgiven under section 139(5) along with the 44ABreport is valid and not belated return as persection 139(1) and accordingly the carry forwardof losses and unabsorbed depreciation isallowable as per section 80 of the IT Act? 2. Whether the original return wasconsidered invalid by assessing officer for wantof 44AB report and assessee's petition undersection 264 was dismissed by CIT and had becomefinal, was the Tribunal right in not settingaside the order of the CIT(A), which admitted theappeal of the assessee on same issue?". 6. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. 7. The Revenue before filing an appeal against theassessee, the State owned Corporation, has to obtain clearance fromthe Committee of Disputes (CoD). The apex Court, in the case ofONGC v. City and Industrial Development Corporation, MaharashtraLtd., (2007) 7 SCC 39, after referring to the earlier cases in ONGC(I) v. CCE, 1992 Supp (2) SCC 432; ONGC (II) v. CCE, 1995 Supp (4)SCC 541; ONGC (III) v. CCE, (2004) 6 SCC 437; in which directionshave been issued to set up governmental committee to resolve thedispute between the intra-governmental or intergovernmentaldisputes involving Government Departments or Government ownedcompanies of the Central and State Governments, rather thanadjudicating the same before Courts of law, and having regard tothe fact of the particular case, that the matter was pending since1990 and considering the nature of the controversy, which is arecurring feature, directed that a Committee be formed to sort outthe differences between the Central Government and the StateGovernment entities. The composition of such committee is alsostated to be as follows : 1. The Cabinet Secretary of the Union; 2. Chief Secretary of the State; 3. Secretaries of the departments concerned of the Union and theStates; and 4. Chief Executive Officers of the undertakings concerned. 8. The Supreme Court in the case of Chief Conservator ofForests, Govt. Of A.P. vs. Collector and Others reported in (2003)3Supreme Court Cases 472 has held as follows:- "Disputes between Government Departments cannotbe contested in Court. States/Union of India mustevolve a mechanism for resolving interdepartmentalcontroversies. Constitution of Committees suggestedwhich should consist of Chief Secretary, Secretaries ofthe departments concerned, Secretary of Law andSecretary of Finance (where financial commitments areinvolved) whose decision should be binding on alldepartments concerned". 9. The apex Court also held that it shall be theobligation of every Court and every Tribunal where such a disputeis raised hereafter to demand a clearance from the committee incase it has not been so pleaded and in the absence of theclearance, the proceedings would not be proceeded with. The samehas been reiterated in the latest decision of the Supreme Court inthe case of CIT, Delhi VI v. M/s. Oriental Insurance Co. Ltd., inCivil Appeals Nos.4529 of 2008 etc., decided on July 18, 2008reported in 304 ITR. 10. In order to discharge that obligation, when we posed aquestion to the learned counsel as to whether such a clearance hashttps://hcservices.ecourts.gov.in/hcservices/ been obtained from the CoD, he admitted that such a certificatefrom COD has not been obtained. Hence, the appeal is dismissed asnot entertainable in the absence of the clearance, however, bygiving liberty to the appellant to move this Court after obtainingclearance from CoD. No costs. 10. In order to discharge that obligation, when we posed aquestion to the learned counsel as to whether such a clearance hashttps://hcservices.ecourts.gov.in/hcservices/ been obtained from the CoD, he admitted that such a certificatefrom COD has not been obtained. Hence, the appeal is dismissed asnot entertainable in the absence of the clearance, however, bygiving liberty to the appellant to move this Court after obtainingclearance from CoD. No costs. Sd/-Asst. Registrar/true copy/Sub Asst. Registrarrg To1. The Income Tax Appellate Tribunal, Chennai 'C' Bench, Chennai.2. The Commissioner of Income Tax (Appeals)III, Chennai-34.3. The Deputy Commissioner of Income Tax, Company Circle III(1), Chennai-34.4. The Income Tax Officer, Chennai-34.5. M/s. Tamil Nadu Electricity Board, No.800, NPKRR Maligai, Electricity Avenue, Anna Salai, Chennai-2. +1 cc to M/s.Pushyasitaraman, Advocate, SR.No.48097 T.C.(A)No.1380 of 2008 VM(CO)SMK/05.09.08