2019 (4) TMI 835 - HC - Income Tax

Plan formulated by the Central Board of Direct Taxes - document contains Chapter 3 pertaining to litigation management - Petitioners have challenged the directions issued by the CBDT for disposal of certain number of Appeals of specified categories within specified time. According to the Petitioners, these time limits are artificially applied, are contrary to the statutory provisions and also have the effect of making hurried orders by the Appellate Commissioner - HELD THAT - The target set by the CBDT for disposal of the Appeals within the time frame provided, are directory and not mandatory. Primafacie, we also feel that it may not be impermissible for the CBDT to prioritize the disposal of the Appeals and to set the goals for disposal of certain number of such Appeals by the Appellate Commissioner. With respect to the Petitioners second part of the challenge, we are of the opinion that the CBDT should reconsider the same. From the action plan, it is not clear as to the utility of the norms set which the Commissioner has to achieve. If the purpose of setting of norms is to evaluate the performance of the Commissioner, there would be all the more reason why the abovequoted portion of the action plan be reconsidered by the CBDT. On the next date of hearing, the Respondent would apprise us about the utility of the norms that the Commissioner would need to achieve and the outcome of the CBDT s deliberations on our recommendation for reconsideration.

Summary

Issues:
1. Challenge to directions issued by CBDT for disposal of Appeals within specified time limits.
2. Challenge to the portion of the action plan providing incentives for quality orders.

Analysis:
1. The petitioners challenged the directions issued by the Central Board of Direct Taxes (CBDT) regarding the disposal of Appeals within specified time limits. They argued that these time limits are artificially applied, contrary to statutory provisions, and may lead to hurried orders by the Appellate Commissioner. The court opined that the targets set by the CBDT for disposal of Appeals may be directory and not mandatory. It also considered it permissible for the CBDT to prioritize the disposal of Appeals and set goals for the Appellate Commissioner to achieve within a certain timeframe.

2. The second part of the challenge focused on a specific portion of the action plan related to incentives for quality orders. The plan mentioned additional credit for quality appellate orders passed by CITs, with specific criteria for what constitutes a quality case. The court suggested that the CBDT should reconsider this portion of the action plan. It expressed concerns about the utility of the norms set for the Commissioner, especially in evaluating performance. The court requested the Respondent's counsel to provide information on the purpose of these norms and the outcome of CBDT's deliberations on reconsideration at the next hearing date.

Overall, the court's preliminary opinion leaned towards the permissibility of setting targets for disposal of Appeals by the Appellate Commissioner but raised questions about the effectiveness and purpose of the norms related to incentives for quality orders. The case was adjourned for further information and deliberation by the CBDT.