Citing that they have the responsibility to protect the interests of their minority shareholders, public-sector banks have sought the right to appeal in tribunals and high courts in income tax cases.
In many instances, banks are not satisfied with the orders of the income tax commissioners (appeals) in cases of disputes over the assessment of the income tax of banks. Then, the banks are required to appeal to the income tax appellate tribunal.
Also, in many cases, the Committee on Disputes does not permit banks to pursue the case before the appellate tribunal or high court. This refusal leaves no scope for judicial pronouncement in the case. All government-owned entities have to mandatorily take permission from the committee, if they decide to resort to litigation against government departments, failing which the tribunal or high court will not entertain the matter.
Seeking a solution to the issue from the government, the Indian Banks Association (IBA) said, “With the process of disinvestment by the government, most public-sector banks have raised capital by issuing shares to the public.”
Hence, these banks are no longer totally owned and controlled by the Central Government and they are required to protect the interests of other shareholders as well, the IBA added.
The IBA has approached the government to permit banks to file appeals before tribunals since there is provision for the same in the Income Tax Act. The association further suggested that representatives of public sector entities, including banks, should be nominated on the Committee on Disputes to facilitate amicable resolution of disputes referred to it.
