Commissioner Of Income Tax, Madurai v. M/S. Pandian Roadways Corpn. Ltd., Madurai

In the High Court of Judicature at Madras Dated :15.12.2009 Coram : The Honourable Mr.Justice K.RAVIRAJA PANDIANandThe Honourable Mr.Justice M.M.SUNDRESH Tax Case (Appeal) Nos.481 of 2004 Commissioner of Income Tax,Madurai.... Appellant Vs.M/s. Pandian Roadways Corpn. Ltd.,Madurai.... Respondent TAX CASE (APPEAL) under Section 260A of the Income Tax Actagainst the order of the Income Tax Appellate Tribunal Madras 'B'Bench dated 24.6.2003 made in ITA.No.246/Mds/95 for the assessmentyear 1987-88 against the order dated 3.10.94 in PAN.No.47-027-CX-5395 on the file of Commissioner of Income Tax (Appeal VI) Maduraiagainst the order dated 30.11.88 in PAN 47-027-CX-5395/87-88 on thefile of Deputy Commissioner Spl. Range-II, Madurai. For Appellant : Mr.J.Nareshkumar For Respondent: Mr.J.Balachandar for M/s.S.Sridhar JUDGMENT JUDGMENT OF THE COURT WAS DELIVERED BY K.RAVIRAJA PANDIAN,J This appeal is filed by the revenue against the order ofthe Income Tax Appellate Tribunal, 'B' Bench, Chennai dated24.6.2003 made in ITA.No.246/Mds/95. The relevant assessment yearis 1987-88. 2. The facts as culled out from the statement of facts statedin the memorandum of appeals are as follows:- The assessee is carrying on bus transport business. Forthe assessment year 1987-88, the assessee inter alia claimeddeduction of Rs.3,92,291/ being sales tax liability relating to https://hcservices.ecourts.gov.in/hcservices/ assessment years 1978-79 to 1985-86 as an additional ground at thestage of first appeal. Since the Commissioner of Income Tax(Appeals) did not consider the same, the assessee filed an appealto the Tribunal, who remitted the matter back to the Commissionerof Income Tax (Appeals) directing him to consider this ground ofappeal also. Although the assessee had already paid the tax in therespective years, since they had disputed the liability in appeal,they did not take the amount into their profit and loss account.The Sales Tax Tribunal confirmed the liability in 1986, andtherefore, the assessee claimed it as a deduction in the assessmentyear 1987-88. The Commissioner of Income Tax (Appeals) took theview that since the payment was genuine and the liability upheldand ascertained during the relevant accounting year, it should beallowed as a deduction in the present assessment year. The Revenuetook up the matter on appeal to the Income Tax Appellate Tribunal.The Tribunal upheld the order of the Commissioner of Income Tax(Appeals) and dismissed the Revenue's appeal. Aggrieved by theorder of Income Tax Appellate Tribunal, the present tax caseappeal is filed by formulating the following substantial questionof law:- Whether in the facts and circumstances ofthe case, the Tribunal was right in holding thatadditional sales tax demanded for 1978-79 to 1985-86which were actually paid during the relevantaccounting years, could be claimed as a deductionfor assessment year 1987-88 on the ground that thesales tax tribunal confirmed the liability in appealonly during the year ?" 3. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding thatadditional sales tax demanded for 1978-79 to 1985-86which were actually paid during the relevantaccounting years, could be claimed as a deductionfor assessment year 1987-88 on the ground that thesales tax tribunal confirmed the liability in appealonly during the year ?" 3. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. 4. The Revenue before filing an appeal against the assessee,the State owned Corporation, has to obtain clearance from theCommittee of Disputes (CoD). The apex Court, in the case of ONGC v.City and Industrial Development Corporation, Maharashtra Ltd.,(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) SCC541; ONGC (III) v. CCE, (2004) 6 SCC 437; in which directions havebeen issued to set up governmental committee to resolve the disputebetween the intra-governmental or intergovernmental disputesinvolving Government Departments or Government owned companies ofthe Central and State Governments, rather than adjudicating thesame before Courts of law, and having regard to the fact of theparticular case, that the matter was pending since 1990 andconsidering the nature of the controversy, which is a recurringfeature, directed that a Committee be formed to sort out thedifferences between the Central Government and the State Government entities. The composition of such committee is also stated to be asfollows : 1. The Cabinet Secretary of the Union; 2. Chief Secretary of the State; 3. Secretaries of the departments concerned of the Union andthe States; and 4. Chief Executive Officers of the undertakings concerned. 5. 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 cannot becontested in Court. States/Union of India must evolve amechanism for resolving interdepartmental controversies.Constitution of Committees suggested which shouldconsist of Chief Secretary, Secretaries of thedepartments concerned, Secretary of Law and Secretary ofFinance (where financial commitments are involved) whosedecision should be binding on all departmentsconcerned". 6. The apex Court also held that it shall be the obligationof every Court and every Tribunal where such a dispute is raisedhereafter to demand a clearance from the committee in case it hasnot been so pleaded and in the absence of the clearance, theproceedings would not be proceeded with. The same has beenreiterated in the latest decision of the Supreme Court in the caseof CIT, Delhi VI v. M/s. Oriental Insurance Co. Ltd., in CivilAppeals Nos.4529 of 2008 etc., decided on July 18, 2008. 7. In order to discharge that obligation, when we posed aquestion to the learned counsel as to whether such a clearance hasbeen 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. Sd/- Asst.Registrar. /true copy/ krr/ https://hcservices.ecourts.gov.in/hcservices/ To 1. The Income Tax Appellate Tribunal, Chennai 'B' Bench, Chennai. 90 Chennai 'B' Bench, Chennai. 90 2. The Commissioner of Income Tax (Appeals-VI) Madurai 3. The Deputy Commissioner of Income Tax, Special Range- II, Madurai T.C.(A)No.481 of 2004 KA (CO)kk 18/1