2006 (11) TMI 111 - HC - Income Tax

Committee on dispute HC rejected the writ petition filed by the assessee on the ground of the assessee had not within one month of the filing of the writ petition applied to the COD for permission to litigate which is the mandatory requirement

Summary

Issues:
Challenge to order requiring audit of accounts as per Income Tax Act, 1961
Requirement of COD clearance for disputes between government departments and bodies
Mandatory nature of COD clearance for filing petitions in court by government bodies or PSUs

Analysis:
1. The writ petition challenges an order requiring the audit of accounts of the Delhi Development Authority ("DDA") as per Section 142 (2A) of the Income Tax Act, 1961. The DDA sought to challenge an order issued by the Additional Commissioner of Income Tax, Range 32, New Delhi, dated 9.9.2005.

2. The High Court directed notice to issue in the writ petition and stayed further proceedings. The court later directed the parties to determine if the dispute should be referred to the Committee on Disputes (COD). An application seeking an extension of time for assessment completion was filed by the respondents, leading to further court directions.

3. The DDA's counsel requested additional time to ascertain if COD clearance was necessary. The court clarified that time spent in litigation would not count towards the assessment period.

4. The petitioner's counsel argued that COD clearance was unnecessary, citing a judgment of the Supreme Court. However, the court disagreed, citing a Supreme Court judgment mandating disputes between government departments and bodies to be referred to the COD.

5. The court referenced the Supreme Court judgments in Oil and Natural Gas Commission v. Collector of Central Excise and Mahanagar Telephone Nigam Limited v. Chairman, CBDT, emphasizing the mandatory nature of COD clearance for filing petitions in court by government bodies or PSUs.

6. The court distinguished a previous judgment and noted that the DDA, being a statutory authority, must seek COD clearance for disputes. As the petitioner had not applied for COD permission within a month of filing the writ petition, the court dismissed the petition, clarifying that time spent in litigation would not count towards assessment completion.

7. The court dismissed the writ petition with no order as to costs, allowing the petitioner to approach the COD for dispute resolution.