The Commissioner Of Income Tax Chennai Appellant (Both Tcs v. The Poompuha Shipping Corporation, 304/305 Anna Salai Chennai 18. Respondent(Both Tcs

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 18.08.2008 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Appeal) Nos.1069 and 1070 of 2008& M.P.No.1/08 in T.C.1070/08 The Commissioner of Income TaxChennaiAppellant (Both TCs.)v.The Poompuha Shipping Corporation,304/305 Anna SalaiChennai 18.Respondent(Both TCs.) Tax Case Appeals filed under section 260A of the IncomeTax Act, 1961 against the order of the Income Tax AppellateTribunal, Madras 'B' Bench, Chennai, dated 14.09.2007 passed inITA Nos.281/Mds/1995 filed against the order in ITA.230/94-95dated 17.11.1994 made by the Commissioner of Income Tax (Appeals)V, Madras-34 against the order in PA.N0.47.056-CV.7254 GI.NO.9-P/1992-1993 dated 16.8.1994 on the file of the Deputy Commissionerof Income Tax, Special Range VI, Madras-34 (TC.No.1069/08) andagainst the order in ITA.234/94-95 dated 17.11.1994 made by theCommissioner of Income Tax (Appeals) V, Madras-34 against theorder in PA.N0.47.056-CV.7254 and GI.NO.9-P/1992-1993 dated29.8.1994 on the file of the Deputy Commissioner of Income Tax,Special Range VI, Madras-34 (TC.No.1090/08) & 282/Mds/1995. For appellant : Mr.J.NarayanaswamyFor M/s.Pushya Sitaraman (Judgment of the Court was delivered byK.RAVIRAJA PANDIAN, J.) This appeals are filed against the order of the Income TaxAppellate Tribunal, Madras 'B' Bench, Chennai, dated 14.09.2007https://hcservices.ecourts.gov.in/hcservices/passed in ITA Nos.281 & 282/Mds/1995. 2. The assessee is the Poompuhar Shipping Corporationowned by the Government of Tamilnadu. For the assessment year1992-93, the assessee filed returns and claimed that unabsorbeddepreciation of the earlier years from income from heads of incomeother than business and brought its taxable income to Nil. TheAssessing Officer held that as per the provisions of Sec.34A,unabsorbed depreciation can only be set off against profits andgains of business and not against other income. He thereforerestricted the set off to 2/3rd of the unabsorbed depreciation tobusiness income only. 3. Aggrieved by the order of the Assessing Officer, theassessee carried the matter on appeal to the Commissioner ofIncome Tax (Appeals), who by his order, held that the restrictioncontemplated in Sec.34A is only to setting off of 1/3rd ofunabsorbed depreciation pertaining to assessment years 1991-92 andearlier, and does not prevent the operation of Sec.32(1)(ii) and32(2) beyond this. It is further held that the assessee isentitled to tag 2/3 of the unabsorbed depreciation from theearlier assessment years to the claim of the current years and setoff the same and thus decided the issue in favour of the assessee. 4. The revenue, aggrieved by the order of the Commissionerof Income Tax (Appeal), went on further appeal to the Income TaxAppellate Tribunal. The Tribunal, following its own decision inthe case of M/s Easwaran and Sons Engineers Ltd., and taking inaid the judgment of the Supreme Court in the case of Garden SilkWvg. Factory vs. CIT reported in 189 ITR 512 has come to theconclusion that the unabsorbed depreciation can be carried forwardand set off subject to the provisions of Sec.34A against theincome under other heads and decided in favour of the assessee.The revenue is before us, on appeal against the said order byformulating the following substantial questions of law: " Whether on the facts and in the circumstances of thecase, the Tribunal was right in holding that even thatpart of the unabsorbed depreciation deferred to be setoff as per Sec.34A can be set off against income otherthan income from business?"> 5. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. " Whether on the facts and in the circumstances of thecase, the Tribunal was right in holding that even thatpart of the unabsorbed depreciation deferred to be setoff as per Sec.34A can be set off against income otherthan income from business?"> 5. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. 6. The appellant being the Government department beforefiling an appeal against the State owned Corporation, we are ofthe view has to obtain clearance from the Committee of Disputes(CoD). The apex Court, in the case of ONGC v. City and IndustrialDevelopment Corporation, Maharashtra Ltd., (2007) 7 SCC 39, afterreferring 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.https://hcservices.ecourts.gov.in/hcservices/CCE, (2004) 6 SCC 437; in which directions have been issued to set up governmental committee to resolve the dispute between theintra-governmental or intergovernmental disputes involvingGovernment Departments or Government owned companies of theCentral and State Governments, rather than adjudicating the samebefore 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 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 andthe States; and 4. Chief Executive Officers of the undertakings concerned. 7. The Supreme Court in the case of Chief Conservator ofForests, Govt. Of A.P. vs. Collector and Others reported in (2003)3 Supreme 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". 8. 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, 2008. 9. 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 appeals are dismissedas not entertainable in the absence of the clearance, however, by https://hcservices.ecourts.gov.in/hcservices/ giving liberty to the appellant to move this Court after obtainingclearance from CoD. No costs. Consequently, connectedmiscellaneous petition is also dismissed. rg Sd/- Assistant Registrar / True Copy / Sub. Assistant Registrar To1. THE ASSISTANT REGISTRARTHE INCOME TAX APPELLATE TRIBUNALRAJAJI BHAVAN, MADRAS.2. THE INCOME TAX APPELLATE TRIBUNALCHENNAI-B-BENCH, CHENNAI3. THE COMMISSIONER OF INCOME TAXAPPEALS) V, MADRAS-344. THE DEPUTY COMMISSIONER OF INCOME TAXSPECIAL RANGE VI,MADRAS-345. THE SECRETARYCENTRAL BOARD OF DIRECT TAXESNEW DELHI.1 cc to M/s.Pushya Sitaraman, Advocates, SR.45715ntk (co)dv/29.8.