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Issues involved: Disallowance of bad debts u/s 36(1)(vii) read with section 36(2) and disallowance of provision for property tax liability pending before Supreme Court.
Issue 1: Disallowance of bad debts u/s 36(1)(vii) read with section 36(2): The Revenue appealed against the allowance of bad debts amounting to Rs. 63,64,547 by the ld. CIT (Appeals) without fulfilling the conditions specified for write off of bad debts u/s 36(1)(vii) read with section 36(2) of the Income-tax Act. The Revenue failed to obtain approval from the High Power committee (COD) for filing the appeal before the Tribunal. The absence of COD approval rendered the appeal un-admitted, following the precedent set by the Supreme Court in the case of Oil & Natural Gas Commission Vs. Collector of Central Excise. The decision emphasized the necessity of COD approval for litigations involving Government and Government undertakings to prevent wastage of public money and time. The Tribunal dismissed the appeal due to the lack of COD approval, allowing the Revenue to file a Misc. Petition upon obtaining the necessary permission. Issue 2: Disallowance of provision for property tax liability pending before Supreme Court: The Revenue contested the deletion of disallowances amounting to Rs. 7,74,359 on account of provision for property tax liability, which was pending adjudication before the Hon'ble Supreme Court. However, the absence of COD approval for the appeal led to the dismissal of the Revenue's appeal by the Tribunal. The decision highlighted the importance of COD approval in litigations involving Government entities to maintain coordination and prevent frivolous disputes from burdening the courts. The Tribunal's ruling emphasized the need for adherence to the COD approval process before pursuing legal actions, ensuring the efficient resolution of disputes and the preservation of public resources. This judgment underscores the significance of obtaining COD approval for litigations involving Government entities, as mandated by legal precedents and principles of efficient dispute resolution. The Tribunal's decision to dismiss the Revenue's appeal due to the lack of COD approval serves as a reminder of the procedural requirements essential for pursuing legal actions in cases involving public sector undertakings.
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