SOP on Appeals to High Court - CBDT Instructions
CBDT has issued fresh instructions on filing appeals against orders of ITAT.
Responsibility for Filing of Appeal to High Court: The jurisdictional CCIT shall be the authority to decide whether to contest an order of the ITAT, in the light of the facts and circumstances of a particular case and the statutory provisions. He shall take a view in the matter after taking into consideration the recommendations of the authorities below. Once the CCIT communicates his decision to contest a particular order of ITAT, it shall be the responsibility of the CIT to ensure timely and proper filing of appeal in the High Court and consequential follow up actions.
Quality of Appeals:
i. An appeal to the High Court or the Supreme Court can be filed only on 'Substantial Questions of Law'. The CCsIT/CsIT have to bestow their personal attention on this issue while taking decision to file appeal under section 260A of the Act. The Substantial Questions of Law arising out of the order of ITAT must be clearly identified and suggested draft question of law should be sent to the Standing Counsels for their consideration
ii. Although the expression ‘substantial question of law' has not been defined anywhere in the statute, the Supreme Court has laid down the following tests to determine whether a ‘substantial question of law' is involved:
++ Whether the issue directly or indirectly affects substantial rights of the parties?
++ Whether the question is of general public importance?
++ Whether it is an open question in the sense that the issue has not been settled by pronouncement of Supreme Court?
++ Whether the issue is not free from difficulty?
++ Whether it calls for a discussion for alternative views?
iii. Perversity of facts also constitutes ‘Substantial Question of Law' as it falls in (d) and (e) above. Supreme Court has laid down the attributes of perversity by holding that an order or finding is perverse on facts if it falls under any of the following categories:
++ The finding is without any evidence.
++ The finding is contrary to the evidence.
++ There is no direct nexus between the conclusion of fact and primary fact upon which that conclusion is based?
++ When an authority draws a conclusion which cannot be drawn by any reasonable person or authority on the material and facts placed before it.
Proper Judicial Record Management System:
i. A proper judicial record management system is essential for meaningful conduct of litigation. The CIT has to, inter alia, ensure that once appeal to ITAT is authorized against the order of CIT (A), a separate judicial folder for the assessee for a particular year is maintained in his office. Among other things, the folder should have a copy of relevant assessment order, the remand report of the AO on the order of the CIT (A), if any, and the scrutiny report submitted by the authorities below.
ii. This folder should be retrieved as soon as the order of ITAT in the case is received. The scrutiny report on the order of the ITAT may be processed through this folder (where other relevant papers including the scrutiny report while filing appeal to ITAT should be available). If the appeal to High Court is filed under section 260A, the relevant papers (scrutiny report, memo of appeal etc) should also be linked to the same folder.
iii. These judicial folders should be easily retrievable once the judgement of the High Court in the case is received, so that the decision to file SLP is taken without making reference to the AO/Range Head and proposal to file SLP is processed in the office of the CIT timely.
iv. Likewise, a separate judicial folder should be maintained in case of assessee's appeal under section 260A/writ petitions filed in High Court, which should contain relevant documents including copy of counter & rejoinder affidavits filed in the Court proceedings.
v. The CIT should evolve a system through which a digital copy of relevant documents such as Appeal Memo and its enclosures (assessment order, CIT(A)'s order, ITAT order etc) are retained for use at the time of sending SLP proposal in the case, if the need arises.
Preparation of Memorandum of Appeals/Papers etc: The CIT shall evolve a system in his charge to ensure that:
(i) There is proper vetting of Memorandum of Appeals as regards relevant facts therein before the appeal is actually filed;
(ii) Necessary particulars including the correct PAN and CIT charge is mentioned;
(iii) All annexures including copies of orders of authorities below are properly typed as per High Court Rules to avoid defect/office objections.
(iv) In case, any document like agreement, depositions etc crucial to the issue involved and considered by lower authorities, a copy of the same must be referred to at relevant place in appeal memo and its copy annexed thereto.
Appeal/Writ Petition Filed by the Assessee: As soon as the memo of appeal/writ petition filed by the assessee is received, a file should be opened in the office of CIT and assigned a proper identification number incorporating the ITA No./WP No. allotted by the High Court. Factual comments on the memo of appeal/writ petition and judicial precedents in support of the Revenue's stand should be forwarded by the CIT to the Departmental Counsel for drafting counter-affidavit. The CIT should ensure that the counter-affidavit is filed within time allowed by the Court and further follow up actions taken in consultation with the counsel.
Power to defend Union of India, Ministry of Finance, Secretary (Revenue), Chairman CBDT etc in cases before High Court: All the cases before High Court, pertaining to Direct Taxes, wherein Union of India, Ministry of Finance, Secretary (Revenue), Chairman CBDT, or any of these figure as respondents, should be defended by the CCIT/ DGIT concerned.
Compliance of High Court Directions: The CIT shall personally ensure compliance of directions of the High Court like Dasti service, filing of counter or rejoinder affidavit or other specific directions within time frame to avoid adverse observations. There should be close co-ordination between field officers and Standing Counsels in the High Court so that directions are communicated in time and proper compliance is made to the satisfaction of the Court.
Judgments of High Court containing strictures etc. Judgments of the High Court containing strictures or which are contrary to Board's orders, notifications, instructions, circulars etc. shall be brought to the notice of the Board ( concerned division) immediately by the CCIT/DGIT under intimation to ITJ section of the Board.
Assistance to Departmental Counsels: The CIT should ensure that whenever the Departmental Counsel seeks Instructions/clarifications in a case, the same are attended to by the officers concerned promptly. The counsel should be briefed properly to strengthen Revenue's case. The CIT should personally involve himself in cases involving intricate issues of facts/law having wide ramifications or involving high revenue stake. A copy of the scrutiny report for filing appeal to High Court should invariably be made available to the appearing counsel for his assistance in preparation of the case and arguments.
Time Lines: The CBDT has also issued a time line chart according to which the appeal to the High Court should be filed within 115 days of the receipt of the order from ITAT.
CBDT Instructions No. 7/2011, Dated: May 24, 2011