“(i) The Supreme Court in the three ONGC cases and in
Chief Conservator of Forests, Government of AP v. Collector, (2003) 3
SCC 472 and MTNL v. Chairman CBDT, (2004) 267 ITR 647 was dealing
with disputes between a public sector undertaking of the Central Government
and a Department of the Central Government or between two Departments of the
State Government of Andhra Pradesh. The directions given and the
observations made by the Supreme Court therein have to be read in the
context and against the backdrop of the controversy before the Court,
including the litigants who were before it. There is no order made by the
Supreme Court which relates to a dispute between the Union of India and a
State, or a public sector undertaking of the Union of India and a State, or
between two States inter se, the term ‘State’ here meaning and
including the State Government, a Department of the State Government or an
undertaking of the State Government. None of these cases suggest that the
Committee set up by the Central Government would have jurisdiction to
consider resolution of such disputes between a State and the Union, the
respective Departments and undertakings included.
(ii) Hence, it is not possible to expand the scope of the
directions of the Supreme Court so as to include a dispute between a
Department of the Central Government and a State Government undertaking.
(iii) The Income-tax Appellate Tribunal is a creature of
statute. Such a constituted Tribunal is required to exercise powers and
discharge the functions conferred on the Tribunal by the Act. The Tribunal,
therefore, cannot exercise powers or discharge functions which are not
conferred on the Tribunal by the Act.
(iv) The powers available to the Tribunal are governed by
the provisions of S. 253 and S. 254 of the Act. These provisions cannot be
read to mean that the Tribunal has power to hold that an appeal is not
admitted.
(v) Both the assessee and the Department are statutorily
vested with a right under the Act by virtue of S. 253(1), (2) and (4) of the
Act to file an appeal or cross-objections. Such right granted by the statute
cannot be divested by the Tribunal on an erroneous assumption of powers
arrogated to itself under a mistaken belief of law.
(vi) The Tribunal had assumed powers which it did not
have, for determining whether the appeal was to be admitted or not. There
was no such requirement in the facts of the case to approach the Committee
as the assessee and the Income-tax Department could not be asked to go and
obtain clearance from a Committee which had no jurisdiction over them.
(vii) The appeals filed by the assessee and the
Department before the Tribunal were accordingly restored to the file of the
Tribunal for being heard and decided afresh on the merits in accordance with
law.”
