Commissioner Of Income Tax vs. M.P. Rajya Van Vikas Nigam

ITA Nos. 22 & 24 of 2010 (1) THE HIGH COURT OF MADHYA PRADESH: JABALPUR (Division Bench) ITA No. 22/2010 APPELLANT : Commissioner of Income Tax, Bhopal Versus RESPONDENT : M/s M.P. Rajya Van Vikas Nigam, Bhopal With ITA No. 24/2010 APPELLANT : Commissioner of Income Tax, Bhopal Versus RESPONDENT : M.P. Rajya Van Vikas Nigam, Bhopal ------------------------------------------------------------------------------------------- Coram: Hon’ble Shri Justice Ajay Kumar Mittal, Chief Justice Hon’ble Shri Justice Vijay Kumar Shukla, Judge ------------------------------------------------------------------------------------------- Appearance: Shri Ajay Yadav, Advocate on behalf of Shri Sanjay Lal, Advocate for the appellant. Shri Abhijeet Shrivastava, Advocate for the respondent. ------------------------------------------------------------------------------------------- O R D E R (Oral) [04.02.2020] Per: Ajay Kumar Mittal, Chief Justice: Both the present appeals preferred by the Revenue under Section 260A of the Income Tax Act, 1961 (in short “the Act”) are involving identical substantial questions of law framed vide order dated 03.03.2014 and therefore, are disposed of by this common order. 2. ITA No.22/2010 has arisen out of an order dated 22.07.2009 passed by the Income Tax Appellate Tribunal, Indore (for brevity “the Tribunal”) in ITA No.03/IND/2000 (assessment year 2005-06) whereas ITA No. 24/2010 ITA Nos. 22 & 24 of 2010 (2) has arisen out of an order dated 17.07.2009 passed by the Tribunal in ITA No.130/Ind/2009 and ITA No.269/Ind/2009 (Assessment Year 2006-07). 3. For the sake of brevity, the facts are taken from ITA No.22/2010. The appeal was admitted on 03.03.2014 for determination of the two substantial questions of law, which read as under:- “1. Whether the Income Tax Appellate Tribunal was right in dismissing the appeal filed by the Revenue only on the ground that approval of the committee on dispute constituted by the Central Govt. has not been obtained? 2. The question further as to whether this finding can be upheld or can be termed as good in view of the subsequent judgment of the Supreme Court in the case of Electronics Corporation of India Ltd. vs. Union of India (2011) 332 ITR 0058?” 4. The learned Tribunal dismissed the appeal of the Revenue vide order dated 22.07.2009 as not maintainable, however, with a liberty to revive the appeal upon obtaining the clearance of the CoD (Committee on Dispute) or with the evidence that such a committee does not exist or is in the process. 5. A similar question had come up for consideration before this Court in MAIT No.90/2006 (Commissioner of Income Tax, Jabalpur vs. Northern Coal Fields Limited) decided on 06.01.2020 wherein, the Bench considered the law laid down by the Supreme Court in Electronics Corporation of India Limited vs. Union of India and others (2011) 3 SCC 404 in which it was held that approval of the CoD in terms of its earlier judgment was not required. The relevant extract of the Division Bench decision reads as under:- 7. Undoubtedly, the Constitution Bench of the Supreme Court in Electronics Corporation (supra) has reversed its earlier decision in ITA Nos. 22 & 24 of 2010 (3) ONGC’s case (supra) and held that approval of the COD in terms of its earlier judgment was not required. The relevant extract of the said decision reads as under:- “12. By order dated 11-9-1991, reported in Oil and Natural Gas Commission v. CCE, 1992 Supp (2) SCC 432, this Court noted that “public sector undertakings of the Central Government and the Union of India should not fight their litigations in court” (SCC p. 432, para 3). Consequently, the Cabinet Secretary, Government of India was “called upon to handle the matter personally”. 13. This was followed by the order dated 11-10-1991 in ONGC-II case (1995 Supp (4) SCC 541, Oil and Natural Gas Commission v. CCE), where this Court directed the Government of India to “set up a Committee consisting of representatives from the Ministry of Industry, the Bureau of Public Enterprises and the Ministry of Law, to monitor disputes between Ministry and Ministry of Government of India, Ministry and public sector undertakings in between themselves, to ensure that no litigation comes to court or to a tribunal without the matter having been first examined by the Committee and its clearance for litigation” (SCC pp. 541-42, para 3). *** *** *** 15. By another order dated 20-7-2007 (Oil and Natural Gas Commission v. City & Industrial Development Corpn. Maharashtra Ltd. - (2007) 7 SCC 39 case) this Court extended the concept of dispute resolution by High-Powered Committee to amicably resolve the disputes involving the State Governments and their Instrumentalities. The idea behind the setting up of this Committee, initially, called a "High-Powered Committee" (HPC), later on called as "Committee of Secretaries" (CoS) and finally termed as "Committee on Disputes" (CoD) was to ensure that resources of the State are not frittered away in inter se litigations between entities of the State, which could be best resolved, by an empowered CoD. The machinery contemplated was only to ensure that no litigation comes to court without the parties having had an opportunity of conciliation before an in-house committee. [See SCC paras 3-4 of the order dated 7-1-1994 in (2004) 6 SCC 437, Oil and Natural Gas Commission v. CCE case]. 16. Whilst the principle and the object behind the aforestated orders is unexceptionable and laudatory, experience has shown that despite best efforts of the CoD, the mechanism has not achieved the results for which it was constituted and has in fact led to delays in ITA Nos. 22 & 24 of 2010 (4) litigation. We have already given two examples hereinabove. They indicate that on same set of facts, clearance is given in one case and refused in the other. This has led a PSU to institute a SLP in this Court on the ground of discrimination. We need not multiply such illustrations. 17. The mechanism was set up with a laudatory object. However, the mechanism has led to delay in filing of civil appeals causing loss of revenue. For example, in many cases of exemptions, the Industry Department gives exemption, while the same is denied by the Revenue Department. Similarly, with the enactment of regulatory laws in several cases there could be overlapping of jurisdictions between, let us say, SEBI and insurance regulators. Civil appeals lie to this Court. Stakes in such cases are huge. One cannot possibly expect timely clearance by CoD. In such cases, grant of clearance to one and not to the other may result in generation of more and more litigation. The mechanism has outlived its utility. 18. In the changed scenario indicated above, we are of the view that time has come under the above circumstances to recall the directions of this Court in its various Orders reported as (i) 1995 Supp (4) SCC 541, Oil and Natural Gas Commission v. CCE dated 11.10.1991, (ii) (2004) 6 SCC 437, Oil and Natural Gas Commission v. CCE, dated 7.1.1994 and (iii) (2007) 7 SCC 39, ONGC-IV dated 20.7.2007.” 8. Since the Supreme Court in Electronics Corporation (supra) has recalled its all earlier judgments whereby following the decision in ONGC’s case (supra) reported in 1992 Supp (2) SCC 432, direction was issued to resort to mechanism of settlement of inter/intra government disputes by referring matter to Committee on disputes and the said committee was set up, therefore, the judgment in ONGC’s case (supra) no longer holds the field and it would be deemed that there was no requirement of COD approval for filing the appeal. The substantial question of law framed is thus, answered accordingly. 6. In view of the above, both the substantial questions of law are answered in favour of the appellant. The impugned orders passed by the Tribunal dismissing the appeals only on the ground that there was no clearance of the CoD, are unsustainable and the same are hereby set aside. ITA Nos. 22 & 24 of 2010 (5) The matters are remanded to the learned Tribunal to re-decide the appeals on merit in accordance with law. 7. Accordingly, both the present appeal stand allowed and disposed of. Let a copy of this order be retained in the record of ITA No.24/2010. (Ajay Kumar Mittal) (Vijay Kumar Shukla)

Chief Justice Judge S/ Digitally signed by SACHIN CHAUDHARY Date: 2020.02.19 12:05:31 +05'30'