The Commisioner of Income Tax vs State Bank of Travancore

C.N. Ramachandran Nair, J.—When these appeals were taken up for hearing counsel for the Respondent-Bank submitted that Committee on Disputes'' approval is not so far obtained by the revenue which has filed the appeals. These cases were once referred to the Full Bench for decision on the issue raised on merits. However, Full Bench decided the issues referred in respect of other Assessees and sent back these cases to the Division Bench for hearing by order dated 15.12.2009. However, at that time requirement of approval by CoD was required and therefore it was mentioned that CoD approval will be produced by the revenue before the Division Bench. When the appeals were taken up today, standing counsel referred to the judgment of the Supreme Court in Civil Appeal No. 1883 of 2011 where under the Supreme Court has recalled all the judgments based on which CoD was constituted and approval was being granted. Counsel for the Respondent-Assessee submitted that since these appeals were filed prior to the above judgment of the Supreme Court, appeals should not be entertained without clearance from CoD. However, besides vacating earlier judgments constituting CoD for the purpose of granting approval, the Supreme Court does not state whether clearance from CoD is required in respect of pending cases or not. The main reason for the Supreme Court to recall earlier judgments is the failure of the CoD in exercising their powers in an even manner, leading to denial of approval to eligible cases and at the same time granting of the same in similar cases. So much so, we feel at least in respect of appeals pending before this Court, this Court should consider the appeals on merits and appeals should not be dismissed for want of approval from CoD. Moreover what we find is that these appeals are filed u/s 260A of the I.T. Act, where jurisdiction of the High Court is limited to interfering with finding on substantial question of law. Admittedly in these cases question raised is a substantial question of law, and therefore these were referred to Full Bench and the matter now stands decided by the Full Bench judgment. Following the judgment of the Full Bench in CIT v. South Indian Bank Ltd., 326 ITR 174 (Ker.) we answer the questions referred in favour of the revenue and against the Assessee and allow the appeals by reversing the orders of the Tribunal and confirming disallowance of provision for bad debt claimed by the Respondent-Assessee to the extent it was against the judgment of the Full Bench. However modification if required will be made in the assessment to make the disallowance in tune with the judgment of the Full Bench. Therefore there will be direction to the assessing officer to consider the disallowance after giving opportunity to the Assessee as well.