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TMI Blog2005 (2) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... 307/Hyd./91 for AY 1995-96, dated 27-7-2003; ITA Nos. 496/Hyd/89, AY 82-83; 214/Hyd./91, AY 1983-84; 215/Hyd./91, AY 84-85; 216/Hyd./91, AY 85-86; 854/Hyd./91, AY 89-90 order dated 25-7-2003; ITA No. 221/Hyd./99, AY 96-97 order dated 12-2-2004, ITA No. 622/Hyd./99 AY, 1995-96 to 1997-98 - order dated 11-5-2004. 3. The case of the assessees is that these Public Sector Undertakings are owned by the State Government and that the dispute between a Public Sector Undertakings of State Government and/or between Departments of the State Government on the one side and Departments of the Union Government on the other side do not fall within the jurisdiction of "Committee on Disputes" in Cabinet Secretariate and that no "Committee on Disputes" has been constituted to resolve or permit such dispute, either by the Central Government or the State Government, to enable the assessees to seek permission from them. Under these circumstances when an identical issue had come up before this Bench earlier, it was argued that what was contemplated by the Hon'ble Supreme Court in the case of Oil Natural Gas Commission and in the case of Mahanagar Telephone Nigam Ltd. was disputes between the Public S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 541 "We direct that the Government of India shall 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 of the Government of India and Public Sector Undertakings in between themselves, to ensure that no litigation comes to the Court or to the Tribunal without the matter having been first examined by the Committee and its clearance for litigation Government may include a representative of the Ministry concerned in a specific case and one from the Ministry of Finance in the Committee. Senior Officers only should be nominated so that the Committee would function with status, control and discipline. It shall be the obligation of every court and every Tribunal where-such a dispute is raised hereafter to demand a clearance from the Committee in case it has not been so pleaded and in the absence of the clearance, the proceedings would not be proceeded with. The Committee shall function under the ultimate control of the Cabinet Secretary but his delegate may lookafter the matters This Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia will fight a litigation in a court of law. It is neither appropriate nor permissible for two departments of a State or the Union of India to fight litigation in a Court of law. Indeed, such a course cannot but be detrimental to the public interest as it also entails avoidable wastage of public money and time. Various departments of the Govt. are its limbs and, therefore, they must act in coordination and not in confrontation. Filing of a writ petition by one department against the other by invoking the extraordinary jurisdiction of the High Court is not only against the propriety and polity as it smacks of indiscipline but is also contrary to the basic concept of law which requires that for suing or being sued, there must be either a natural or a juristic person. The States/Union of India must evolve a mechanism to set at rest all interdepartmental controversies at the level of the Government and such matters should not be carried to a court of law for resolution of the controversy. The facts of the present case make out a strong case that there is a felt need of setting up of committees by the State Government also to resolve the controversy arising between various departments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on accounted for 65 percent of the civil litigation in the form of appeals and that 95 per cent of the appeals failed as they should not have filed. Singh promised to enforce a 1994 resolution taken by the then Congress Government to the effect that "disputes between the Government and PSUs, and one PSU and another do not go to Courts or Tribunals, and that such disputes be settled between the parties amicably." 6. The above decision, of the Hon'ble Rajasthan High Court which pertain to a dispute between an arm of the State Government and the Income-tax Department was followed and applied by this Bench of the Tribunal in the case of Singareni Collieries Ltd. in ITA No. 307/M/91 for AY 1995-96, dated 27-7-2003; ITA Nos. 496/Hyd./89, AY 1982-83; 214 (Hyd.) 191, AY 1983-84; 215(Hyd.)/91; AY 1984-85; 216(Hyd.)/91, AY 1985-86; 854/Hyd./91, AY 1989-90-order dated 25-7-2003; ITA No. 221/Hyd./99, AY 1996-97 - order dated 12-2-2004; ITA No. 622/Hyd./99, AY 1995-96 to 97-98 - order dated 11-5-2004. 7. Upon hearing the rival submissions, on an earlier occasion when the matter came for hearing, the Bench of the Tribunal was contemplating as to whether the issue is to be referred to a Large ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c Sector Undertakings of Government of India, disputes pertaining to your company does not fall within the jurisdiction of the Committee on Disputes in Cabinet Secretariat. 2. Copies of the notes received for consideration of the Committee are therefore returned herewith. 3. However, you may approach the office of Chief Secretary of your State who has been advised inter alia by the D/o Legal Affairs, GOI to resolve similar dispute resolution mechanism (in the pattern of the Committee on Disputes) in compliance of the orders of the Hon'ble Supreme Court in the case of dispute between Chief Conservator of Forest Government of AP (appellant) and the Collector and others (respondent) in CA Nos. 8580 of 1994 and 9097 of 1995 order dated 18-2-2003). The Hon'ble Supreme Court has reiterated the above cited verdict in the case of MTNL (appellant) v. Chairman, CBDT (respondent) in CA No. 3058 of 2004 order passed on 7th May, 2004 vide pages 2 and 3 (in which the direction given at paras 14 and 15 in the case of AP Chief Conservator of Forests and Collector and others was stated supra). A copy of the letter No. 32(2) 2004-Judl., dated 30-11-2004 issued by D/o Legal Affairs is enclosed he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company as thus defined." Thus, under the Income-tax Act as well as the Companies Act, no distinction is made between a company owned exclusively or partly by the Central Government and companies owned exclusively or partly by the State Government. In fact, all these companies either owned by the Central Government or by the State Government partly by one or partly by other are governed under section 618 to section 620 of the Companies Act and are all Public Sector Companies under the Income-tax Act. In the face of these definitions, we are unable to accept the contention of the appellants that these assesses are not Public Sector Undertakings as contemplated by the Hon'ble Supreme Court. 13. In this view of the matter, we have to decide as to whether these assessees have to obtain clearance from the "Committee on Disputes" and that the Central Government or the State Government jointly have to abide by the decision of the Supreme Court and constitute such an appropriate Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruling has been pronounced, before the date on which the Finance Bill, 2003 receives the assent of the President, by the Authority in respect of an application by a resident applicant referred to in sub-clause (ii) of this clause as it stood immediately before such dale, such ruling shall be binding on the persons specified in section 245S; (b) 'applicant' means any person who (i) is a non-resident referred to in sub-clause (i) of clause (a); or (ii) is a resident referred to in sub-clause (ii) of clause (a); or (iii) is a resident falling within any such class or category of persons as the Central Government may, by notification in the Official Gazette, specify in this behalf; and (iv) makes an application under sub-section (1) of section 245Q; (c) 'application' means an application made to the Authority under sub-section (1) of section 245Q; (d) 'Authority' means the Authority for Advance Ruling constituted under section 245Q; (e) 'Chairman' means the Chairman of the Authority; (f) 'Member' means a Member of the Authority and includes the Chairman. Sec. 245Q - Authority for advance rulings - (1) The Central Government shall constitute an Authority for givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Prime Minister in the conference of the Chief Ministers and Chief Justice on 18-9-2004. 16. As the position stands as on date, this Bench of the Tribunal has to necessarily follow the decision of the Coordinate Bench in case of Singareni Collieries and hold that this Bench does not have the power to proceed in this matter in view of the judgment of the Supreme Court in the cases of Oil Natural Gas Commission and Mahanagar Telephone Nigam Ltd. 17. We also notice that no prejudice is caused to the assessees, but for this stoic cognitive dissonance to the view of the Apex Court and the Hon'ble Prime Minister, in the light of the decision of the ITAT Delhi Bench 'D' in the case of Indian Airlines v. Asstt. CIT [1995] 53 ITD 121 at pages 127 and 129 wherein the Bench held as follows: "14. In order to give effect to aforesaid directions of Hon'ble Supreme Court, the Cabinet Secretariat has been issuing memoranda explaining procedure to be followed for settlement of disputes between different departments of Government and between a depart of Government and a Public Sector Undertaking of Central Government. One such memorandum was issued on 24th January, 1994. In the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation." The aforesaid office memorandum cannot be taken lightly. It has to be kept in mind that report of the Cabinet Secretary became part of the decision of Hon'ble Supreme Court on which further directions were issued. The High Power Committee has been set up as per the directions of Hon'ble Supreme Court and the working of the Committee is being reviewed by the Hon'ble Court from time to time. Where a reference is made to above Committee in the manner indicated, the operation of the order or proceeding under challenge is automatically suspended till appropriate order is passed by the Committee. Having regard to aforementioned circumstances it is not permissible or possible for any Department of the Government of India to contend that operation of his order or proceeding taken by him is not suspended in spite of reference of dispute to the High Power Committee. In the present case, the appellant has filed sufficient evidence before us to show that the appellant moved Cabinet Secretariat on 25-1-1995 in accordance with Circular dated 24-1-1994 and, therefore, a reference to the committee in the manner indicated in the above letter relating to action of the Assessing Officer under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tead of sitting on issue of prestige and refusing to even apply to "Committee on Disputes" or moving the Central Government/State Government to constitute a "Committee on Disputes" for resolving the issues as directed by the Supreme Court, which would result in automatic stalling of all proceedings under challenge, are unnecessarily agitating before this Bench, to admit the appeal and grant stay in their favour, when in reality as per the Supreme Court judgments as interpreted by the ITAT Delhi 'D' Bench in the case of Indian Airlines, the suspension of proceedings is in fact in the hands of the assessees themselves. Similar is the situation, if they approach the Authority for Advanced Ruling as per section 245RR of the Income-tax Act. Chapter XIX-B of the Income-tax Act is not being availed by the assessee. 19. In the result, we apply the decision of the Hon'ble Supreme Court in the cases of Oil Natural Gas Commission and Mahanagar Telephone Nigam Ltd. and the decision of the Hon'ble Rajasthan High Court in the case of State of Rajasthan and hold that. This Bench does not have the power or authority to admit these appeals in the absence of clearance as contemplated by the Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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