2018 (8) TMI 716 - HC - Income Tax

Conduct of the revenue in pursuing and prosecuting its appeals before the High Court - appeal against settled issues - Held that - we were assured by the Revenue that proper steps would be taken to ensure that the State takes a consistent view and decisions on any issue which are already taken by this Court would be informed to their Advocates who would also be continuously updated of the decisions taken by this Court on the questions of law. This is to ensure that there is consistency in the view taken by this Court. However, it appears that the Revenue has not carried out the assurance which was made to the Court. On the next occasion, we would expect a proper response from the Revenue and explanation as to why assurance given to us earlier that consistent view would be taken by the Revenue is not being followed. It is time, responsibility is fixed and the casual approach of the Revenue in prosecuting its appeals is stopped. We would also request the Additional Solicitor General to assist us on the next date.

Summary

Issues:
1. Disallowance of Employees' Contributions to ESIC paid beyond due dates under ESIC Act.
2. Claim of set-off of unabsorbed depreciation of assessment year 2000-01 beyond 8 years.

Analysis:
1. The first issue raised in the appeals challenges the disallowance made under Section 36(1)(Va) read with Section 2(24)(x) of the Income-Tax Act regarding Employees' Contributions to ESIC paid by the assessee-Company beyond the due dates under ESIC Act for Assessment Years 2009-10 and 2010-11. The Revenue contended this disallowance, but the Counsel for Revenue acknowledged that a similar issue was decided against the Revenue in a previous case by the Bombay High Court. Consequently, it was concluded that this issue did not present any substantial question of law.

2. The second issue in the appeals concerns the claim of set-off of unabsorbed depreciation of the assessment year 2000-01 beyond the period of 8 years. The Revenue highlighted conflicting decisions by the Bombay High Court on this matter. Despite some appeals being dismissed, subsequent appeals on the same issue were admitted without considering the earlier decisions. The Court expressed disappointment at the Revenue's approach, emphasizing the need for consistency in legal matters. The Court adjourned the hearing to allow the Revenue to provide a proper response and explanation for the inconsistent stance taken. The Court also directed the Revenue to ensure a consistent approach and requested the Additional Solicitor General's assistance in the next hearing for further clarity and resolution of the matter.