Income Tax Disputes badly handled in High Court - RS Summoned
IN an order dated 9.7.2015, the Delhi High Court expressed its concern about the manner in which the Revenue's cases have been handled. The Court had, in fact, called the Additional CIT concerned, Mr. Vivek Kumar and conveyed to him its concern. Mr. Vivek Kumar had assured the Court that there would be a proper coordination and it would be ensured that the Revenue is effectively represented in its cases before the Court.
In an order dated 13.08.2015, the Court observed that it was disappointing to note that the Revenue has been unable to make good the above. So the Court directed the Revenue Secretary to be present in person in the Court on 20th August, 2015 and to submit to the Court in writing the steps that he proposes to take to put in place a mechanism for the seamless and immediate transfer of cases from one Standing Counsel of the Revenue to the other in any contingency, so that no unnecessary adjournments are sought by the Standing Counsel for the Revenue, particularly on the grounds of lack of formal order of entrustment of the case, want of instructions or papers and so on and so forth.
The Court concluded, "We expect that the matter will be attended to with the seriousness and urgency that it deserves."
See what happened on 20th August 2015:
Present in the court are: Mr. SK Ray, Member (Audit and Judicial), Central Board of Direct Taxes (CBDT); Mr A. K. Sinha, Principal Commissioner of Income Tax (Pr CIT), Delhi;Mr NiranjanKohli, CIT (Judicial); Mr. Vivek Kumar Additional CIT (Judicial) and Mr. Mr Ramesh Chandra, Deputy CIT. Mr S. K. Das, Secretary (Revenue) was unable to be present in the Court.
The High Court gave certain directions to the Income Tax Department:
1. There should be a system devised for the Deputy CIT, under supervision of the Additional CIT to monitor on a constant (if not daily) basis the adherence to time lines in various matters entrusted to standing counsel. If there is delay beyond the acceptable limit, for any reason whatsoever, it should be possible for the case to be re-assigned to another standing counsel with specific instructions to complete the further steps within the stipulated time frame. The defects pointed out by the Court are accessible on the net, and the Deputy and Additional CIT will keep themselves apprised of these on a regular basis case-wise to facilitate effective monitoring.
2. The Court would like the ITD to ensure that in none of the matters there is a situation where (a) there is no one appearing for the ITD (b) even if they are, they have neither instructions nor papers. The Deputy CIT in-charge of the Judicial Cell of the ITD in the High Court should coordinate with the Court Masters of the Court and provide a list of the names of standing counsel who will be appearing in the appeals in the final hearing list. It will the responsibility of the Deputy CIT to ensure that the standing counsel who have been assigned the cases have the complete records. The Deputy CIT can obtain from the Court Masters of the Court, well in advance of the likely dates of hearing of the cases, soft copies of the complete case records available in the Court server, upon payment of the usual charges. It should not be an excuse for standing counsel of the ITD to take adjournments on the ground that they have no instructions or that they do not have the case papers.
3. Issues that may be pending before other High Courts or the Supreme Court which have attained finality one way or the other, i.e., either in favour of the Revenue or the Assessee. There should be a regular channel of communication of such information to the standing counsel (with a copy being provided to the Court Masters by the Deputy CIT). This will greatly facilitate the disposal of such Regular Matters.
On all the above three aspects, Mr Ray and Mr Sinha assured the Court that a supplementary SOP will be prepared and placed before the Court within a month's time. The Court also impressed upon the ITD that its communication with its standing counsel should be through emails and other electronic forms of communication and the movement of hard copies of files and papers should be avoided unless absolutely essential. If the entire case records in the ITAT and the level of the CIT (A) are digitised, as they should be, there should be no difficulty in even the entrustment of the case records to standing counsel happening digitally.
And the case was posted for 28th September, 2015
What happened on 28th September 2015?
Mr. NiranjanKouli, CIT (Judicial) is present in Court. He has handed over a status report prepared by him in which inter alia it is stated that there are altogether 1001 defective appeals of the Revenue beginning from the year 2006 onwards that have so far been identified. In other words, these 1001 appeals are yet to be numbered because counsel for the Revenue have not cured the defects pointed out by the Registry of the Court.
In response to a specific query by the Court as to the tax effect in all these 1001 appeals, the Court is informed by Mr. Kouli as well as by Mr. N.P. Sahni, learned Senior Standing counsel, some more time would be needed for that purpose.
The Court is also informed that the said status report has not yet been placed before the Secretary (Revenue), and that no instructions as such have been issued by him to the Income Tax Department (ITD) pursuant to the Court's order dated 20th August 2015, a copy of which was directed to be delivered to him by a Special Messenger.
The Court expressed its disappointment that the ITD has not acted with the urgency required in terms of the Court's previous order passed more than a month ago on 20th August 2015.
The Court directed:
1. By 9th October 2015, the ITD will file in the Court, and also simultaneously send to the Secretary (Revenue), Government of India, the complete list of 1001 defective appeals (with the cause title and relevant assessment year, the date of filing, the date when defects were pointed out) indicating the tax effect in each of the appeals.
2. The ITD will also file in the Court not later than 9th October 2015 the written instructions that have been issued in strict compliance with the Court's order dated 20th August 2015.
3. The Court fixes the responsibility for ensuring compliance with the directions issued in paras 4 and 5 of this order on Mr. NiranjanKouli CIT (Judicial), Mr. S.K. Ray, Member (Audit and Judicial), Central Board of Direct Taxes (CBDT) and Mr A. K. Sinha, Principal Commissioner of Income Tax (Pr CIT), Delhi Region.
4. If the ITD provides the email Ids and the mobile numbers of the CIT, ACIT and DCIT concerned to the Registry, then the list of defects thereafter pointed out by the Registry in the Revenue's appeals will be communicated by the Registry to the said officials by email and SMS simultaneous with such intimation being sent to counsel. Once this is done, responsibility should be fixed on the concerned officer of the Department when appeals which are indicated to be defective are not cured and re-filed within the time limit prescribed by the Rules of the High Court. This will also form part of revised instructions that will be issued by the ITD.
5. The ITD should digitise all its records and engage teams of persons with the requisite knowledge who can assist it in collating information on specific areas from the digitised data. The Court would expect effective steps to be set in motion without delay by the ITD and file a status report by the next date on the progress made in this regard.
The case is posted for 12th October 2015.