To err on revenue side is not always safe - Tribunal terms such attitude as "Intellectually dishonest" and imposes cost of Rs 25,000/-
ADJUDICATION by departmental offices has become a sham. Every assessee knows that the allegations levelled in the Show Cause Notice will be religiously confirmed by the Adjudicating Authority. Even in cases which are squarely covered by the precedent decisions of Supreme Court and High Courts, the oft repeated phrase in the Order-in-Original is "the case laws relied by the assessee are not on all fours with the facts of the case and are distinguishable". The ld Adjudicating Authorities are too busy to record any finding in the orders as to why the case laws are not applicable. To err on revenue side is a widely accepted mantra as there is no accountability for passing patently erratic orders in favour of the revenue. While many of these orders are set aside by the Tribunals, once in a while we see Tribunals getting annoyed with such non-application of mind by the lower authorities.
In a recent order, the ITAT came down heavily on the CIT(A) and held:
"…We are of the considered opinion that the order has been passed by the CIT(A) in a non-judicious and arbitrary manner. The order of the CIT(A) is not only against the law laid down by the Hon'ble High Court but smacks malafide on the part of the CIT(A). It is evident that the CIT(A) has committed "intellectual dishonesty" extending it to the limit of perversity. The impugned order has burdened the assessee with the avoidable cost of litigation before the Tribunal and harassment. We feel that the instant case is one of the rare and fit case where the Revenue should compensate the assessee for causing unnecessary mental and financial harassment. The valuable time of the Tribunal has also been lost in adjudicating the issue which is squarely covered by the judgement of the Hon'ble High Court. Therefore, the appeal of the assessee is allowed with costs of Rs.25,000/-. The cost shall be paid to the assessee in accordance with Rule 32A(2) of the Appellate Tribunal Rules, 1963."
Perhaps now, the whole department will stand by the ld. CIT(A) and an appeal will be filed against the ITAT order citing various grounds. It is high time the departmental adjudication and appeal be done away with.