Ita/126/2009 Of The Commissioner Of Income Tax,Tvm v. South Indian

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 therespondent-Bank submitted that Committee on Disputes' approval isnot so far obtained by the revenue which has filed the appeals. Thesecases were once referred to the Full Bench for decision on the issueraised on merits. However, Full Bench decided the issues referred inrespect of other assessees and sent back these cases to the DivisionBench for hearing by order dated 15.12.2009. However, at that timerequirement of approval by CoD was required and therefore it wasmentioned that CoD approval will be produced by the revenue beforethe Division Bench. When the appeals were taken up today, standingcounsel referred to the judgment of the Supreme Court in Civil AppealNo. 1883 of 2011 whereunder the Supreme Court has recalled all thejudgments based on which CoD was constituted and approval wasbeing granted. Counsel for the respondent-assessee submitted that ITA 126, 192 & 229/2009 since these appeals were filed prior to the above judgment of theSupreme Court, appeals should not be entertained without clearancefrom CoD. However, besides vacating earlier judgments constitutingCoD for the purpose of granting approval, the Supreme Court does notstate whether clearance from CoD is required in respect of pendingcases or not. The main reason for the Supreme Court to recall earlierjudgments is the failure of the CoD in exercising their powers in aneven manner, leading to denial of approval to eligible cases and at thesame time granting of the same in similar cases. So much so, we feel atleast in respect of appeals pending before this Court, this Court shouldconsider the appeals on merits and appeals should not be dismissed forwant of approval from CoD. Moreover what we find is that theseappeals are filed under Section 260A of the I.T. Act, where jurisdictionof the High Court is limited to interfering with finding on substantialquestion of law. Admittedly in these cases question raised is asubstantial question of law, and therefore these were referred to FullBench 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 BANK LTD., 326 ITR 174 (Ker.) we answer the questions referred infavour of the revenue and against the assessee and allow the appeals byreversing the orders of the Tribunal and confirming disallowance ofprovision for bad debt claimed by the respondent-assessee to the extentit was against the judgment of the Full Bench. However modification ifrequired will be made in the assessment to make the disallowance intune with the judgment of the Full Bench. Therefore there will bedirection to the assessing officer to consider the disallowance aftergiving opportunity to the assessee as well. (C.N.RAMACHANDRAN NAIR)Judge. (BHABANI PRASAD RAY) Judge. kk