2010 (11) TMI 745 - HC - Income Tax

Delay in filing of an appeal - period of limitation - information from the Income Tax Appellate Tribunal under the Right to Information Act - counsel for the Department for want of proper instructions, is not able to provide information regarding those matters where similar issues arise. In many decisions rendered by the Tribunal, we find that the Tribunal has either followed its own order pertaining to the earlier Assessment year of the same assessee or the order passed on the same issue in the case of some other assessee. The counsel pleads ignorance as to whether any appeal was preferred against those orders and if preferred they are not able to give the particulars of the appeals or the outcome of those appeals or the stage at which those appeals are. Sometimes repeated adjournments are given to the counsel for the Revenue to supply such information. However, the Department is not able to give the information. This is happening only because there is no organized system which is adopted by the legal section of the Income Tax Department in pursuing these appeals. It is also because of non-computerization of the legal cell. Because of lack of proper coordination between different Departments or in action on the part of the officers of the nature specified above, the Department may be losing huge revenue. There are many other problems and it is not necessary to spell out all those problems in this order, Since repeated oral instructions given to the Department from time to time to set its house in order have fallen into deaf years, we have no option but to bring these aspects to the notice of the higher authorities by means of this order. We also feel it necessary to summon Secretary (Revenue), Govt. of India as well as Chairman CBDT

Summary

Issues: Impugned order's limitation period determination; Lack of coordination between ITAT and Income Tax Department; Delays and shortcomings in filing and pursuing appeals; Lack of proper instructions and information by counsel for the Department; Non-computerization of the legal cell; Summoning of higher authorities.

Impugned Order's Limitation Period Determination: The appeal filed by the Revenue challenges the order of the Income Tax Appellate Tribunal (ITAT) dated 05.12.2001. The appellant claims the appeal is within limitation as they received the copy of the impugned order on 29.09.2006. However, the respondent contends that the limitation should be counted from 31.01.2002 when the Tribunal's order was initially sent but not accepted by the Income Tax Department. The lack of coordination between ITAT and the Department is evident from the delay in receiving certified copies, highlighting the unorganized functioning of the Income Tax Department.

Delays and Shortcomings in Filing and Pursuing Appeals: The High Court observes various shortcomings and lapses by the Income Tax Department in filing and pursuing appeals. Despite most appeals being filed within the stipulated period, significant delays occur in removing objections raised by the Registry, with delays in refiling appeals exceeding 100, 300, and even 500 days. The Department's inefficiency in addressing objections promptly results in substantial delays in processing matters, raising concerns about the handling of appeals with significant tax implications.

Lack of Proper Instructions and Information by Counsel: The Court notes that counsel for the Department often lacks proper instructions and information regarding previous decisions and appeals, leading to difficulties in providing relevant details on similar issues. The absence of an organized system within the legal section of the Income Tax Department and non-computerization of the legal cell contribute to the challenges faced by counsel in presenting comprehensive information, causing repeated adjournments and delays in proceedings.

Non-Computerization of the Legal Cell: The judgment highlights the adverse impact of the non-computerization of the legal cell within the Income Tax Department, emphasizing the need for an organized system to streamline the handling of appeals and ensure efficient coordination between different departments. The lack of proper coordination and actions by officers may result in revenue losses for the Department, indicating the necessity for technological advancements and improved processes.

Summoning of Higher Authorities: Due to the persistent issues and the ineffectiveness of repeated instructions to rectify the situation, the Court decides to summon the Secretary (Revenue), Govt. of India, and the Chairman CBDT. The higher authorities are directed to appear in court on a specified date to address the concerns raised regarding the functioning, coordination, and efficiency of the Income Tax Department in handling appeals and legal matters, emphasizing the need for corrective action at the administrative level.