COMMISSIONER OF INCOME TAX-2 vs. M/S. CENTRAL BANK OF INDIA

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WP/11580/2013HC BombayHCBM01046700201323 July 2014Author: HON'BLE SHRI JUSTICE G. S. KULKARNI,HON'BLE SHRI JUSTICE M.S. SANKLECHA6 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petition filed by the Revenue was not maintainable and dismissed it. The Tribunal's decision to dismiss the Miscellaneous Application under Section 254(2) was upheld. The reasoning was primarily based on the fact that the application for recall was filed beyond the statutory period of 4 years from the date of the original order (February 20, 2008). Additionally, the Tribunal noted that the application was filed more than 11 months after the Supreme Court's judgment in "Electronics Corporation of India Ltd." The High Court found no reason to interfere with the Tribunal's order, implicitly agreeing that the delay and the procedural requirements were not met. The Revenue's argument that the Supreme Court's decision made the COD approval requirement redundant was not accepted as a ground to condone the delay in filing the recall application, especially considering the approval was required at the time the original appeal was filed.

What were the facts?

The Revenue (Petitioner) challenged an order dated July 5, 2013, by the Income Tax Appellate Tribunal (ITAT) which dismissed its Miscellaneous Application. This application, filed under Section 254(2) of the Income Tax Act, 1961, sought to recall the ITAT's earlier order dated February 20, 2008. The original order had dismissed the Revenue's appeal for Assessment Year (AY) 1996-97, noting a lack of evidence that the Revenue had obtained approval from the Committee on Disputes (COD) to prosecute the appeal. The Revenue filed the Miscellaneous Application after the Supreme Court's decision in "Electronics Corporation of India Ltd." which held that COD approval was no longer necessary. The ITAT, in its impugned order, noted that the Miscellaneous Application was filed beyond the statutory period of 4 years for rectification and also more than 11 months after the Supreme Court's decision.

What were the issues?

1. Whether the ITAT was justified in dismissing the Revenue's Miscellaneous Application filed under Section 254(2) of the Income Tax Act, 1961, seeking recall of its order dated February 20, 2008, for AY 1996-97. Assessee's Contention (Revenue's Argument): The Revenue contended that the Supreme Court's decision in "Electronics Corporation of India Ltd." rendered the requirement of obtaining approval from the Committee on Disputes (COD) for prosecuting appeals obsolete. Therefore, its earlier appeal, dismissed for lack of COD approval, should be recalled and admitted for hearing on merits. They argued that the Supreme Court's ruling changed the circumstances, making the original dismissal order erroneous. Revenue's Contention (Assessee's Argument): The Revenue argued that the Miscellaneous Application was filed beyond the statutory period of 4 years for rectification. Furthermore, even after the Supreme Court's decision, the application was filed with a significant delay of over 11 months. They also contended that the Supreme Court's decision did not absolve them of the requirement to obtain COD approval at the time the appeal was filed, as the mechanism was in force then. The fact that the Revenue had not applied for COD approval at the relevant time was a critical factor.

Which sections of the Income-tax Act were involved?

Section 254(2)

AI-generated summary — verify with the full judgment below

rng 111580.13 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE CIVIL JURI ICTION WRIT PETITION NO.11580 OF 2013 Commissioner of Income Tax2 .. Petitioner vs. M/s Central Bank of India .. Respondent Mr.Suresh Kumar for Petitioner Mr.F.Irani i/bMr.A.K.Jasani for Respondent CORAM : M.S.SANKLECHA & G.S.KULKARNI, JJ DATED : 23 JULY, 2014 P. C. This petition by the petitioner revenue challenges the order dated 5.7.2013 passed by the Income Tax Appellate Tribunal (the Tribunal) dismissing the petitioner's Misc.Application under section 254 (2) of the Income Tax Act (the Act). By the aforesaid Misc.Application the petitionerrevenue sought to recall the order of the Tribunal dated 20.2.2008 passed in relation to A.Y.199697. 2. On 20.2.2008 the Tribunal dismissed the petitioner's appeal for A.Y.199697 recording as under :

“3. Nothing was placed before us to demonstrate that what action the revenue took for obtaining the approval of COD. However, we may mention that in case the revenue desires to

rng 211580.13 prosecute the appeal, it shall be free to move this Tribunal by appropriate petition for recalling the case and if the Bench is so satisfied about the reasons for the delay in getting the approval from COD then this order shall be recalled so as to treat this appeal as admitted.”

On 1.3.2011 the Supreme Court in the case of ELECTRONICS CORPORATION OF INDIA LTD held that the mechanism of obtaining an approval from the Committee on Disputes (COD) for prosecuting the appeals with regard to disputes inter see between the government departments/undertakings has outlived its utility and it must be done away with.

On the basis of the above decision in ELECTRONICS CORPORATION OF INDIA LTD the petitionerrevenue filed Misc.Application before the Tribunal on 6.12.2012 under section 254 (2) of the Act seeking a recall of the earlier order dated 20.2.2008. The basis of the above application is that no approval is required by the petitionerRevenue of the COD for the purposes of prosecuting its appeal before the Tribunal.

rng 311580.13

The Tribunal by the impugned order dated 5.7.2013 dismissed the petitioner's Misc.Application under section 254 (2) of the Act for recall of its order dated 20.2.2008. In the impugned order the Tribunal records the fact that the Misc.Application under section 254 (2) of the Act has been filed beyond the statutory period of 4 years provided under the Act to file a Misc.Application for rectification from the order dated 20.2.2008. Moreover, the Tribunal also records the fact that after the decision of the Supreme Court in case of ELECTRONICS CORPORATION OF INDIA LTD also the application has been filed after a delay of more than 11 months. When the matter was called out, we asked the petitioner's counsel whether or not the petitioner had applied to the COD for seeking its approval before filing its appeal to the Tribunal relating to A.Y.199697. This was in view of the fact that the Tribunal in its order dated 20.2.2008 had recorded the fact that nothing was placed before them to demonstrate that the revenue had taken action for obtaining approval of the COD.

rng 411580.13

Mr.Suresh Kumar learned counsel appearing for the revenue on instructions states that the Revenue had not made any application to obtain approval of the COD before it filed its appeal for A.Y.1996 98 to the Tribunal. This inspite of the COD mechanism being very much in force at that time. The recall of its earlier orders in respect of ONGC by the Supreme Court in the case of ELECTRONICS CORPORATION OF INDIA LTD only does away with the practice in view of the changed circumstances. The necessity of obtaining approval from COD which was in practice at the relevant time cannot be done away with on the ground that the Supreme Court has now held that the practice needs to be discontinued.

In the above facts and circumstances, we see no reason to entertain the present petition. Accordingly, writ petition is dismissed with no order as to costs. (G.S.KULKARNI, J)

(M.S.SANKLECHA, J)

rng 511580.13

rng 611580.13

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