Writ petition — Dispute between Government Undertaking and Union of India could be ordinarily proceeded with only after receipt of permission of COD — As the matter was covered by decision of Supreme Court, as an exception, High Court was directed to deci

[Delhi Development Authority and Anr. v. UOI & Ors.,
(2009) 314 ITR 342 (SC)]

By a writ petition the Delhi Development Authority (DDA)
sought to challenge an order dated 9-9-2005 of the Addl. CIT, Rg. 32, New
Delhi requiring the petitioner to get the accounts of DDA audited u/s.142(2A)
of the Act. According to the petitioner, it had not applied for the COD
clearance as it was not required since the dispute was frivolous and in
support of its contention reliance was placed on the decision of the Supreme
Court in Canara Bank v. National Thermal Power Corporation, (2001) 1
SCC 43, (2001) 104 Comp. Cas. 97.

The Delhi High Court however held that it was not possible
at the admission stage to arrive at the conclusion that the dispute raised was
a frivolous one as was sought to be contended. According to the High Court the
decision in the Canara Bank’s case turned on its own facts and was
distinguishable. The Delhi High Court dismissed the petition since the
petitioner had not within one month of the filing of the writ petition,
applied to the COD for permission to litigate. It was however clarified that
the time spent in the litigation would not be counted towards the period of
completion of the assessment and also that the petitioner was not precluded
from approaching the COD for resolution of the dispute.

On appeal the Supreme Court observed that ordinarily it
would not have differed with the view taken by the High Court, but as the
matter was covered by the decision in Rajesh Kumar v. Dy. CIT, (2006)
287 ITR 91 (SC), it directed the High Court to consider the writ petition
filed by the petitioner on merits.