2010 (1) TMI 747 - HC - Income Tax

Tribunal dismissed the appeal by its judgment on the ground that no approval was obtained of the Committee on Disputes constituted in pursuance to the judgment of the Supreme Court in ONGC V/s. Collector of Central Excise - revenue has stated before the Court that it was not and is not the contention of the revenue that the approval of the Committee on Disputes was required in order to prefer an appeal before the Income Tax Appellate Tribunal in a matter relating to an adjudication of a dispute relating to exaction of revenue under the Income Tax Act 1961. assessee also adopted the same contention - Held that - Additional Solicitor General states that the Union of India would be ready and willing to constitute a Committee to look into a dispute between the Central Government and State Government entities on a case to case basis if so directed by the Court but this would not be necessary in a matter such as the present which relates to the adjudication of a dispute under the Income Tax Act 1961 appeal was dismissed by the Tribunal was erroneous order of the Tribunal set aside and restored to the file of the Tribunal for a decision on its merits.

Summary

Issues:
Appeal dismissal due to lack of Committee on Disputes approval.

Analysis:
The judgment pertains to an appeal filed before the Income Tax Appellate Tribunal at Mumbai for the assessment year 2003-04. The Tribunal dismissed the appeal on the grounds that no approval was obtained from the Committee on Disputes as required by the Supreme Court judgment in ONGC v/s. Collector of Central Excise. The Tribunal noted that approval from the Committee on Disputes was necessary for the appeal. However, both the revenue's counsel and the assessee's counsel contended that such approval was not required for appeals related to the adjudication of revenue under the Income Tax Act, 1961. The Tribunal's basis for dismissal was deemed fallacious in light of this contention.

The Additional Solicitor General clarified that the ONGC judgment was specific to disputes between Central and State Government entities, leading to the formation of a Committee to resolve such differences. The Union of India was willing to constitute a Committee on a case-to-case basis for disputes between Central and State Government entities, as directed by the Court. However, it was emphasized that such a Committee was not necessary for matters like the present one, involving the adjudication of disputes under the Income Tax Act, 1961. The judgment highlighted that the Tribunal's dismissal of the appeal was based on an erroneous understanding of the necessity for Committee on Disputes approval.

In light of the above analysis, the High Court set aside the Tribunal's order dated 7th July, 2009, and restored the appeal to the Tribunal for a decision on its merits. The Court made the rule absolute in the aforementioned terms and decided that there would be no order as to costs. The judgment clarified the correct legal position regarding the requirement for Committee on Disputes approval in appeals related to the adjudication of revenue under the Income Tax Act, 1961, ensuring a fair adjudication process without unnecessary procedural hindrances.