Commissioner of Income Tax vs Tamilnadu Electricity Board

K. Raviraja Pandian, J.—This is appeal is filed against the order of the Tribunal, Madras ''C'' Bench, Chennai. dt. 28th Feb., 2008 passed in ITA No. 1639/Mad/2006.

The assessee is the Tamilnadu Electricity Board, which had come into existence through an enactment. For the asst. yr. 2002-03, the assessee filed loss returns without audit report u/s 44AB and the said return was considered invalid by order dt. 30th Oct., 2002. The assessee filed a Section 264 petition to the CIT and the same was dismissed on 8th Dec, 2003. Subsequently, the assessee filed a revised return admitting additional loss along with Section 44AB report. Since the original return was treated as non est, the revised return was treated as a belated return and accordingly did not allow carry forward of losses and unabsorbed depreciation.

Aggrieved against the assessment order, the assessee filed appeal to the CIT(A), who allowed the appeal holding that the revised return admitting additional loss along with Section 44AB report was a valid return and directed the carry forward of losses and unabsorbed depreciation.

Aggrieved against the order of the CIT(A), the Revenue took the matter on appeal to the Tribunal. The Tribunal found that revised return was filed within the time-limit given u/s 139(5) and the said revised return stands substituted by the revised return and the same is valid since it was filed along with the Section 44AB report and accordingly the carry forward of losses and unabsorbed depreciation were rightly directed to be allowed by CIT(A).

The correctness of the said order is now canvassed before this Court by filing this appeal by formulating the following substantial questions of law:

Whether (when) in the facts and circumstances of the case, the Tribunal was right in holding that the revised return filed within the time-limit given u/s 139(5) along with the Section 44AB report is valid and not belated return as per Section 139(1) and accordingly the carry forward of losses and unabsorbed depreciation is allowable as per Section 80 of the IT Act?

Whether the original return was considered invalid by AO for want of Section 44AB report and assessee''s petition u/s 264 was dismissed by CIT and had become final, was the Tribunal right in not setting aside the order of the CIT(A), which admitted the appeal of the assessee on same issue?

We heard the arguments of the learned Counsel for the appellant and perused the materials available on record.

The Revenue before filing an appeal against the assessee, the State owned corporation, has to obtain clearance from the Committee on Disputes (CoD). The apex Court, in the case of Oil and Natural Gas Corporation Ltd. Vs. City and Indust. Dev. Corpn., Maharashtra and Others, , after referring to the earlier cases in 1992 (61) ELT 3 (SC) , Oil and Natural Gas Commission and Another Vs. Collector of Central Excise, , Oil and Natural Gas Commission Vs. Collector of Central Excise, in which directions have been issued to set up Governmental Committee to resolve the dispute between the intra-Governmental or inter-Governmental disputes involving Government Departments or Government owned companies of the Central and State Governments, rather than adjudicating the same before Courts of law, and having regard to the fact of the particular case, that the matter was pending since 1990 and considering the nature of the controversy, which is a recurring feature, directed that a Committee be formed to sort out the differences between the Central Government and the State Government entities. The composition of such Committee is also stated to be as follows:

The cabinet secretary of the Union;

Chief secretary of the State;

Secretaries of the Departments concerned of the Union and the States; and

Chief executive officers of the undertakings concerned.

8.The Supreme Court in the case of Chief Conservator of Forests, Govt. of A.P. Vs. The Collector and Others, has held as follows:

Disputes between Government Departments cannot be contested in Court. States/Union of India must evolve a mechanism for resolving inter-departmental controversies. Constitution of Committees suggested which should consist of Chief Secretary, Secretaries of the Departments concerned, Secretary of Law and Secretary of finance (where financial commitments are involved) whose decision should be binding on all Departments concerned.

The apex Court also held that 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. The same has been reiterated in the latest decision of the Supreme Court in the case of CIT v. Oriental Insurance Co. Ltd. in Civil Appeal Nos. 4529 of 2008, etc., decided on 18th July, 2008 [reported at (2008) 217 CTR 593 (SC).

In order to discharge that obligation, when we posed a question to the learned Counsel as to whether such a clearance has been obtained from the CoD, he admitted that such a certificate from CoD has not been obtained. Hence, the appeal is dismissed as not entertainable in the absence of the clearance, however, by giving liberty to the appellant to move this Court after obtaining clearance from CoD. No costs.