MAIT No.64/2006 (1) HIGH COURT OF MADHYA PRADESH: JABALPUR (Division Bench) MAIT No. 64/2006 APPELLANT : Commissioner of Income Tax, Jabalpur Versus RESPONDENT : Northern Coal Fields Limited, Singrauli (MP) Coram: Honble Shri Justice Ajay Kumar Mittal, Chief Justice Honble Shri Justice Vijay Kumar Shukla, Judge Appearance: Shri Sanjay Lal, Advocate for appellant. Shri A. K. Shrivastava, Advocate and Shri Abhijeet Shrivastava, Advocate for respondent. ORDER (Oral) [16.01.2020] Per: Ajay Kumar Mittal, CJ In present appeal preferred by Revenue under Section 260-A of Income Tax Act 1961(for short Act), challenge is to order dated 26.10.2005 passed by Income Tax Appellate Tribunal, (for short Tribunal), Jabalpur Bench, Jabalpur in ITA Nos. 206 to 213/JAB/2003 and ITA No.253(JAB)/2003 in respect of Assessment Years 1989-90 to 1997- 98 and 2002-03 respectively, whereby all appeals filed by appellant- Revenue were dismissed. 2. This appeal was admitted on 10.5.2006 on following substantial question of law for determination by this Court:- MAIT No.64/2006 (2) Whether Income Tax Appellate Tribunal is justified in dismissing appeal in limine on ground that approval from High Powered Coordination Committee has not been taken when question of law was posed by revenue to effect that Section 192 of statute clearly postulates that person responsible for paying income chargeable under head 'Salaries' shall at time of payment deduct income tax on amount payable at average of income tax computed on basis of rates enforced for financial year in which payment is made on estimated income of assessee ? 3. appellant-Revenue preferred appeals before learned Tribunal against two separate orders dated 6.6.2003 and 9.8.2003 passed by Commissioner of Income Tax (Appeals)-II, Jabalpur [for short CIT(A) ] pertaining to assessment years 1989-90 to 1997-98 and 2002- 03 wherein CIT(A) allowed appeals filed by assessee s. Against orders of CIT(A), appeals were filed before Tribunal, who in turn, dismissed all appeals vide order dated 26.10.2005 on ground that all appeals were filed by Revenue without obtaining COD (Committee on Disputes) approval and as on date of decision also no such COD approval was placed on record. learned Tribunal while assigning said reason took note of judgment in ONGC vs. CCE (1992) Supp (2) SCC 432 wherein Supreme Court held that when any dispute arises between public sector undertaking and Government Department, appellant was required to obtain necessary approval from COD. It is in this background, present appeal has been filed by Revenue. 4. Learned counsel for appellant-Revenue submitted that COD s approval was not at all necessary in relation to respondent-assessee, MAIT No.64/2006 (3) which is DDO for purposes of disbursing payments to employees and contractors and while doing so, failed to deduct tax as per provisions of Chapter XVII-B of Act. It is argued that learned Tribunal has committed error in ignoring provisions of Section 192 of Act which clearly stipulates that any person responsible for paying any income chargeable under head "Salaries" shall, at time of payment, deduct income-tax on amount payable at average rate of income-tax computed on basis of rates in force for financial year in which payment is made, on estimated income of assessee under this head for that financial year. approval of COD was required only where appeal relates to disputes between Government Department and PSUs. Learned counsel has further submitted that Supreme Court in Electronics Corporation of India Limited vs. Union of India and others (2011) 3 SCC 404 has reversed its earlier judgment in ONGC's case (supra). 5. Learned counsel for respondent could not dispute aforesaid proposition. However, it was contended by him that appeal was admitted in 2006 and ONGC's case (supra) was holding field then, therefore, no substantial question of law arises. Further, it was contended that in such circumstances, decision of Supreme Court in Electronics Corporation (supra), would not be applicable in present case. 6. We have heard learned counsel for parties and find that present appeal deserves to be allowed. 7. Undoubtedly, Constitution Bench of Supreme Court in Electronics Corporation (supra) has recall its earlier decision in ONGC's case (supra) and held that approval of COD in terms of its earlier MAIT No.64/2006 (4) judgment was not required. relevant extract of said decision reads as under:- 12. By order dated 11-9-1991, reported in Oil and Natural Gas Commission v. CCE, 1992 Supp (2) SCC 432, this Court noted that public sector undertakings of Central Government and Union of India should not fight their litigations in court (SCC p. 432, para 3). Consequently, Cabinet Secretary, Government of India was called upon to handle matter personally. 13. This was followed by order dated 11-10-1991 in ONGC-II case (1995 Supp (4) SCC 541, Oil and Natural Gas Commission v. CCE), where this Court directed Government of India to - set up Committee consisting of representatives from Ministry of Industry, Bureau of Public Enterprises and Ministry of Law, to monitor disputes between Ministry and Ministry of Government of India, Ministry and public sector undertakings in between themselves, to ensure that no litigation comes to court or to tribunal without matter having been first examined by Committee and its clearance for litigation (SCC pp. 541-42, para 3). 15. By another order dated 20-7-2007 (Oil and Natural Gas Commission v. City & Industrial Development Corpn. Maharashtra Ltd. - (2007) 7 SCC 39 case) this Court extended concept of dispute resolution by High-Powered Committee to amicably resolve disputes involving State Governments and their Instrumentalities. idea behind setting up of this Committee, initially, called "High-Powered Committee" (HPC), later on called as "Committee of Secretaries" (CoS) and finally termed as "Committee on Disputes" (CoD) was to ensure that resources of State are not frittered away in inter se litigations between entities of State, which could be best resolved, by empowered CoD. machinery contemplated was only to ensure that no litigation comes to court without parties having had opportunity of conciliation before in-house committee. [See SCC paras 3-4 of order dated 7-1-1994 in (2004) 6 SCC 437, Oil and Natural Gas Commission v. CCE case]. MAIT No.64/2006 (5) 16. Whilst principle and object behind aforestated orders is unexceptionable and laudatory, experience has shown that despite best efforts of CoD, mechanism has not achieved results for which it was constituted and has in fact led to delays in litigation. We have already given two examples hereinabove. They indicate that on same set of facts, clearance is given in one case and refused in other. This has led PSU to institute SLP in this Court on ground of discrimination. We need not multiply such illustrations. 17. mechanism was set up with laudatory object. However, mechanism has led to delay in filing of civil appeals causing loss of revenue. For example, in many cases of exemptions, Industry Department gives exemption, while same is denied by Revenue Department. Similarly, with enactment of regulatory laws in several cases there could be overlapping of jurisdictions between, let us say, SEBI and insurance regulators. Civil appeals lie to this Court. Stakes in such cases are huge. One cannot possibly expect timely clearance by CoD. In such cases, grant of clearance to one and not to other may result in generation of more and more litigation. mechanism has outlived its utility. 18. In changed scenario indicated above, we are of view that time has come under above circumstances to recall directions of this Court in its various Orders reported as (i) 1995 Supp (4) SCC 541, Oil and Natural Gas Commission v. CCE dated 11.10.1991, (ii) (2004) 6 SCC 437, Oil and Natural Gas Commission v. CCE, dated 7.1.1994 and (iii) (2007) 7 SCC 39, ONGC-IV dated 20.7.2007. 8. Since Supreme Court in Electronics Corporation (supra) has recalled its all earlier judgments whereby following decision in ONGC's case (supra) reported in 1992 Supp (2) SCC 432, direction was issued to resort to mechanism of settlement of inter/intra government disputes by referring matter to Committee on disputes and said committee was set up, therefore, judgment in ONGC's case (supra), no longer holds field and it would be deemed that there was no requirement of COD MAIT No.64/2006 (6) approval for filing appeal. substantial question of law framed is thus, answered accordingly. 9. In view of aforesaid, impugned order passed by Tribunal dismissing appeals only on ground that there was no sanction from COD is unsustainable and is hereby set aside. matter is remanded to learned Tribunal to re-decide appeals on merits in accordance with law. 10. Accordingly, present appeal stands allowed and disposed of. (Ajay Kumar Mittal) (Vijay Kumar Shukla) Chief Justice Judge Anchal Digitally signed by ANCHAL KHARE Date: 2020.02.01 12:48:45 +05'30' Commissioner of Income-tax, Jabalpur v. Northern Coal Fields Limited