Refusal to follow order of the ITAT - Assessee is free to take proper steps for initiating contempt proceedings
IN a recent case, the ITAT observed,
Since the Income tax Appellate Tribunal is exercising judicial functions, it is now settled that it has all powers of Court, i.e. it can issue summons and exercise all the powers vested in the Income tax authorities under section 131 of the Income tax Act. Hence, any proceeding before the Income tax Appellate Tribunal shall be deemed to be judicial proceedings.
It appears to be the impression/misunderstanding of some of the tax officials that the orders of ITAT interpreting the law cannot be binding as it is a fact-finding authority. However, one can understand that that the decision of the higher authority in the judicial hierarchy is binding on all the lower authorities below the line. Hence, the learned CIT(A) and the assessing officer would be bound by the decision rendered by the jurisdictional Income tax Appellate Tribunal. Refusal to follow the order of the ITAT would render that authority guilty of committing contempt of Tribunal for which the concerned authority is liable to be proceeded against.
Whenever a decision of the Income tax Appellate Tribunal is found to be unacceptable to the authorities below, the right course to follow is to carry the matter in appeal to the High Court and in case of urgent necessity, to seek suspension of the operation of the order of the Tribunal appealed against.
However, it is possible that the law of judicial discipline may be lost sight of by some tax officials. Hence, it would be beneficial to all if the same were brought to the notice of all tax officials in periodic intervals so that this kind of unpleasant happenings can be avoided. Accordingly, we direct the learned CIT (Departmental Representative) to bring this order to the notice of the Chief Commissioner and Central Board of Direct Taxes so that they, being the authorities having superintendence over the tax authorities, may take appropriate steps to enlighten all the officials in order to ensure enforcement of judicial discipline in them, which would avoid considerable harassment, if any, to the assessee public.
The assessee is free to take proper steps for initiating contempt proceeding against the concerned Learned CIT(A).