OF THE COURT WAS DELIVERED BY K.RAVIRAJA PANDIAN,J This appeal is filed by the revenue against the order of the Income Tax Appellate Tribunal, 'B' Bench, Chennai dated 24.6.2003 made in ITA.No.246/Mds/95. The relevant assessment year is 1987-88. 2. The facts as culled out from the statement of facts stated in the memorandum of appeals are as follows:-
The assessee is carrying on bus transport business. For the assessment year 1987-88, the assessee inter alia claimed deduction of Rs.3,92,291/ being sales tax liability relating to assessment years 1978-79 to 1985-86 as an additional ground at the stage of first appeal. Since the Commissioner of Income Tax (Appeals) did not consider the same, the assessee filed an appeal to the Tribunal, who remitted the matter back to the Commissioner of Income Tax (Appeals) directing him to consider this ground of appeal also. Although the assessee had already paid the tax in the respective 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, and therefore, the assessee claimed it as a deduction in the assessment year 1987-88. The Commissioner of Income Tax (Appeals) took the view that since the payment was genuine and the liability upheld and ascertained during the relevant accounting year, it should be allowed as a deduction in the present assessment year. The Revenue took 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 the order of Income Tax Appellate Tribunal, the present tax case appeal is filed by formulating the following substantial question of law:-
Whether in the facts and circumstances of the case, the Tribunal was right in holding that additional sales tax demanded for 1978-79 to 1985-86 which were actually paid during the relevant accounting years, could be claimed as a deduction for assessment year 1987-88 on the ground that the sales tax tribunal confirmed the liability in appeal only during the year ?"
3. We heard the arguments of the learned counsel for the appellant 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 the Committee 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) SCC 541; ONGC (III) v. CCE, (2004) 6 SCC 437; in which directions have been issued to set up governmental committee to resolve the dispute between the intra-governmental or intergovernmental 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 :
1. The Cabinet Secretary of the Union;
2. Chief Secretary of the State;
3. Secretaries of the departments concerned of the Union and the States; and
4. Chief Executive Officers of the undertakings concerned.
5. The Supreme Court in the case of Chief Conservator of Forests, Govt. Of A.P. vs. Collector and Others reported in (2003)3 Supreme Court Cases 472 has held as follows:-
"Disputes between Government Departments cannot be contested in Court. States/Union of India must evolve a mechanism for resolving interdepartmental 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".
6. 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, Delhi VI v. M/s. Oriental Insurance Co. Ltd., in Civil Appeals Nos.4529 of 2008 etc., decided on July 18, 2008.
7. 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.
krr/ To
1. M/s. Pandian Roadways Corpn. Ltd., Madurai.
2. The Income Tax Appellate Tribunal, Chennai 'B' Bench, Chennai