2018 (9) TMI 117 - HC - Income Tax

Non removal of office objections by revenue - Tribunal has followed its view for the Assessment Year 2009-2010 and applied it for the Assessment Year under consideration, namely, 2010-2011 - Held that - On numerous occasions, this Court has brought to the notice of the Department of Revenue, Ministry of Finance, Government of India through the Commissionerates that the Revenue has been selective in its approach. It picks either the assessee or the assessment years pertaining to that assessee for challenging the orders in relation to them, before the higher forums. This results in revenue leakage or perpetuation of wrongs affecting adversely the collection of revenue. The public at large is at a loss to understand as to why the Department/Revenue consistently loses the battle in the higher Courts. This could be then termed as a deliberate or intentional act. If the Department of Revenue, Ministry of Finance, Government of India is going to conveniently overlook this and not bring the guilty persons to book by initiating disciplinary measures against them, then, no purpose will be served at all. We know that the Appeal for the prior Assessment Year may not be properly drafted or does not contain the relevant details, much less the precise question of law and if that is dismissed, there will be definitely an impact on the Appeal relating to the Assessment Year under consideration. Hence, this is not a short term exercise, but a major surgery which will have to be performed.

Summary

Issues:
1. Application of Tribunal's view for different assessment years.
2. Noncompliance with court rules leading to rejection of appeal.
3. Revenue's selective approach in challenging orders.
4. Need for disciplinary measures against guilty persons in Revenue Department.

Analysis:

1. The appellant argued that the Tribunal applied its view from the Assessment Year 2009-2010 to the current Assessment Year 2010-2011. The concern raised was that this could lead to a continuous application of the same order for subsequent years. While the principle of res judicata does not apply to Revenue/Tax proceedings, the appellant highlighted the importance of consistency in decisions. The court agreed to hear the appeal for the 2009-2010 Assessment Year, despite it being technically rejected due to noncompliance with court rules.

2. The appellant pointed out that the Income Tax Appeal for the 2009-2010 Assessment Year was rejected for noncompliance with the Bombay High Court (Original Side) Rules, 1980. The Registry reminded the Revenue Department to address office objections, but no action was taken. This raised concerns about the larger public interest being affected if legal errors in the Tribunal's order were not rectified. The court emphasized the need for proper drafting and inclusion of relevant details in appeals to avoid negative impacts on subsequent cases.

3. The court criticized the Revenue Department for its selective approach in challenging orders, either focusing on specific assesses or assessment years. This behavior was seen as leading to revenue leakage and perpetuation of wrong decisions, ultimately affecting revenue collection. The court highlighted the need for the Revenue Department to take a more consistent and proactive approach in handling legal matters to avoid adverse effects on the public and revenue collection.

4. The court stressed the importance of the Revenue Department taking disciplinary measures against individuals responsible for lapses in legal matters. It was noted that without holding guilty persons accountable, there would be no improvement in the current state of affairs. The court suggested that bold decisions and proper enforcement of disciplinary actions were necessary to bring about positive changes in the handling of legal issues within the Revenue Department.