Appellants: In Re: Mahanagar Telephone Nigam Ltd. Vs.
Advance rulings--MAINTAINABILITY OF APPLICATIONApproval not granted by COD In case of an application for advance ruling filed by a public sector company clearance from Committee on Disputes (COD) was not obtained, therefore, pronouncement of ruling was declined on the ground that clearance of COD had not been obtained.
Application for advance ruling filed by a public sector company in the absence of clearance of Committee on Disputes (COD) is not maintainable.
Having regard to the order of the Hon'ble Supreme Court in Oil and Natural Gas Commission & Anr v. CCE in LA Nos. 1 & 2 in Civil Appeal Nos. 2058-59 of 1988 decided on 11-10-1991 and the office memorandum issued by the Central Government (Cabinet Secretariat, vide No.53/3/10/1994-Cab., dated 24-1-1994), the approval of COD is necessary for proceeding in the matter. It was for obtaining clearance of COD that the case was adjourned more than once. It transpires that the COD is not inclined to grant approval, therefore, the court declined to pronounce ruling on the aforementioned question. However was it open to the applicant to approach the Authority by filing fresh application in the event of the COD granting permission to invoke the jurisdiction of the Authority for seeking advance ruling.
Followed : Oil and Natural Gas Commission & Anr v. CCE LA Nos. 1&2 in CA No. 2058-59 of 1988 dated 11-10-1991 1. This is an application, by a public sector company, under Section 245Q(1) of the IT Act, 1961 (for short the "Act"). The applicant sought advance ruling of the Authority on the following question: "Whether, on the stated facts, the amount refunded by the applicant-company to ITI Ltd. on account of waiver of liquidated damages is an allowable deduction from its business income under the IT Act, 1961, in the assessment for the asst. yr. 2002-2003".
2. On 5th April, 2004, when the application came up for hearing, the jurisdictional CIT raised a preliminary objection on the ground that clearance of COD had not been obtained by the applicant. After hearing both the parties, the Authority passed an order on that date. The relevant portion of the order may be extracted here : "A preliminary objection is raised by the jurisdictional CIT that the applicant is a public sector undertaking so it ought to have sought clearance from the COD before approaching the AAR for advance ruling, having regard to the following observations of the Supreme Court in the Oil and Natural Gas Commission and Anr. v. CCE, Civil Appeal No. 2058/59/1988, dt. 7th Jan., 1994.
'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.' And the Office Memorandum of Cabinet Secretariat No. 53/3/6/91-Cab, dt. 31st Dec. 1991. The memorandum enjoins- 'Further, it has to be ensured that no litigation involving such disputes is taken up in a Court or a Tribunal without the matter having been first examined by the above constituted Committee and the Committee's clearance for litigation is obtained.' In view of the above position the learned counsel appearing for the applicant seeks adjournment of the application by 8 weeks to approach the Committee on Disputes for its clearance. The case is, therefore, adjourned.
Thereafter the case was adjourned from time to time and stands posted today.
3. The applicant requested for adjournment of the application on 11th Oct., 2004, by a letter. The relevant portion of the letter reads as follows : "During our hearing at the COD on 7th Oct., 2004, the COD has held that no approval is required for proceedings before the Authority for Advance Rulings. We are still waiting for the official communication in this regard. We shall file the official communication as soon we receive the same.
In view of the above, we would request your honour to adjourn the hearing till the receipt of official communication from the COD" (emphasis, italicised in print, supplied).
4. We declined adjournment as the case is very old and there is a statutory duty to pronounce ruling within six months of filing of application and from the date of passing the order, referred to above, period of six months has elapsed. The case is taken up today, as fixed earlier.
5. Mr, Akhil Sambhar, learned chartered accountant, represented before us that COD had granted approval and it was only a matter of communicating the approval, therefore, we might adjourn the case to some other day. When we confronted the learned chartered accountant with the letter of 11th Oct., 2004, quoted above, he said that the COD had asked the CBDT to issue necessary instructions for entertaining the application. In this state of affairs we are not inclined to adjourn nor can we proceed with the matter in the absence of orders of COD. In our view, having regard to the order of the Hon'ble Supreme Court in Oil and Natural Gas Commission and Anr. v. CCE in IA Nos. 1 & 2 in Civil Appeal Nos. 2058-59 of 1988 decided on 11th Oct., 1991 and the office memorandum issued by the Central Government (Cabinet Secretariat, vide No. 53/3/10/1994-Cab. dt. 24th Jan., 1994), the relevant portions of which have been reproduced above, the approval of COD is necessary for proceeding in the matter.
It was for obtaining clearance of COD that the case was adjourned more than once. From what is stated above, it transpires that the COD is not inclined to grant approval, therefore, we decline to pronounce ruling on the aforementioned question. However, we leave it open to the applicant to approach the Authority by filing fresh application in the event of the COD granting permission to invoke the jurisdiction of the Authority for seeking advance ruling.