2016 (9) TMI 1556 - HC - Income Tax

Settlement Commission order u/s 245D(6) (B) - Revenue does not seek to pursue Writ Petition BUT Mr. Chhotrary learned Counsel appearing for the Petitioner in Writ Petition states that he has not received any written instructions and therefore he cannot withdraw the Petition - Difference amongst the different Officers of the department - HELD THAT - We are at a loss to understand this attitude of Mr. Chhotrary. An Officer of the Income Tax in Court states that the department does not want to pursue Writ Petition No. 2860 of 2015 yet he still insists on not withdrawing the Petition. It appears that each Income Tax Officer considers himself as independent authority and not a part of one department. If each Officer of the Income Tax is allowed to separately canvass their view point and not the department s view it would lead to chaos. It is to be noted that all authorities under the Act function under the overall supervision of Central Board of Direct Taxes in the execution of this Act. This filing of multiple Petitions on the same cause of action is normally not done. In fact it is the first time we are noticing multiple Petitions are being filed by the Income Tax Department through different Officers challenging the same impugned order. This certainly leads to waste of public money as more than one Advocate is briefed to canvass/ agitate the same issue. The grievances of the Revenue as a whole could be made a subject matter of single Petition. We had on 27th July 2016 adjourned the Petitions on the assurance given to us by Senior Counsel Mr.Setalwad appearing for the Revenue that both the Petitions would be examined and remedial steps taken to ensure that multiple Petitions are not filed. In spite of the above we find that there is dichotomy amongst the different Officers of the department instructing their Counsel. It is not for us to decide the dispute between the Officers of the department. In the above facts it is necessary that the Principal Chief Commissioner of Income Tax Department at Mumbai file an affidavit explaining the circumstances which have led to the filing of the two Petitions on the same cause of action by two different Officers of the Revenue. Further he should also put on record whether the department still insists on pursuing with both the Petitions and the reasons for the same. This without losing sight of the fact that the Income Tax Department as a whole was represented by one Commissioner before the Settlement Commission whose order is subject of challenge before us. Further in case he is of the view that one of the Petitions is to be withdrawn which one. We can only observe that the Officers of the Revenue must act in cooperation to protect its interest by putting up of joint show and not act at cross purposes. We have said so earlier but it bears repetition that the Commissioners of Income Tax must realize they are not independent entities but part of a team known as Income Tax Department administering the Direct Tax Laws.

Summary

Issues Involved:
Challenging an order by the Income Tax Settlement Commission under Section 245D(6)(B) of the Income Tax Act, 1961; Filing multiple petitions by the Income Tax Department on the same cause of action; Lack of coordination among different Officers of the Income Tax Department; Waste of public money due to the filing of multiple petitions; Need for the Principal Chief Commissioner of Income Tax Department to file an affidavit explaining the circumstances leading to the multiple petitions.

Analysis:
The judgment by the Bombay High Court involves multiple issues related to the actions of the Income Tax Department. The primary concern is the challenge to an order issued by the Income Tax Settlement Commission under a specific section of the Income Tax Act. The court notes that the department has filed multiple petitions challenging the same impugned order, which is an unusual practice and raises concerns regarding the coordination and decision-making within the department.

The court expresses disappointment in the lack of cooperation and unity among different Officers of the Income Tax Department, as evidenced by conflicting instructions given to their respective counsels. This lack of coordination is viewed as detrimental to the department's interests and leads to wastage of public resources, as multiple advocates are engaged to address the same issue.

The judgment emphasizes the need for the Principal Chief Commissioner of the Income Tax Department to provide an explanation for the circumstances that led to the filing of multiple petitions on the same cause of action. The court directs the Commissioner to clarify whether the department intends to pursue both petitions and reasons for such a decision. It underscores the importance of unity within the department and the realization that all Officers are part of a collective entity, the Income Tax Department.

Furthermore, the court directs the counsels representing the PetitionerRevenue to serve a copy of the order to the Principal Chief Commissioner for compliance. The Registry is also instructed to forward a copy of the order to the Chairman of the Central Board of Direct Tax for information and necessary action. The judgment adjourns both petitions to a later date, awaiting the Commissioner's affidavit and ensuring compliance with the court's directives to address the issues raised regarding the filing of multiple petitions and lack of unity within the Income Tax Department.