2022 (12) TMI 1095 - HC - Income Tax

Imposition of Cost on Income Tax officers - Reduction of cost imposed by our judgment in SR COLD STORAGE VERSUS UNION OF INDIA AND 3 OTHERS 2022 (8) TMI 806 - ALLAHABAD HIGH COURT - respondents have acted arbitrarily, illegally without jurisdiction, caused harrassment to the petitioner and abused power conferred under the Act, 1961, which resulted in creation of illegal demand of income Tax - HELD THAT - As considering the request and steps being taken by the respondent-department to improve its working so as to rule out possibility of harassment of genuine assessees in the hands of the departmental-officers, we reduce the cost from Rs.50 lacs to Rs.5 lacs with the consent of learned counsel for the petitioner and accordingly modify our judgment dated 11.08.2022 in respect of cost only. The cost shall be deposited by the respondents within one month from today in terms of the directions given in the judgment in SR COLD STORAGE supra .

Summary

Issues:
Reduction of cost imposed by the judgment dated 11.08.2022.

Analysis:
The judgment delivered by the Allahabad High Court involved a discussion on the reduction of costs imposed in a previous judgment. The Additional Solicitor General of India informed the court that the department was taking necessary actions in compliance with the observations made in the previous judgment. An order dated 31.08.2022 was issued by the Central Board of Direct Taxes to the Principal Chief Commissioner of Income Tax-I, Kanpur, directing an explanation to be obtained from the Jurisdictional Assessing Officer regarding the circumstances of reopening the case without proper verification. The ASGI highlighted the department's efforts to improve working conditions and prevent the recurrence of instances leading to legal proceedings against the petitioner. The petitioner's counsel did not oppose the reduction of costs but referred to legal principles regarding the imposition of costs, citing previous judgments such as Salem Advocate Bar Association T.N. v. Union of India (2005) and Ramrameshwari Devi v. Nirmala Devi (2011). The court, considering the department's actions and the counsel's consent, reduced the cost from Rs.50 lakhs to Rs.5 lakhs, modifying the previous judgment solely concerning costs. The respondents were directed to deposit the reduced cost within one month from the date of the judgment, and all pending applications were disposed of.

This detailed analysis of the judgment showcases the court's consideration of legal principles, previous judgments, and the actions taken by the department in deciding to reduce the costs imposed in the previous judgment. The court's decision was based on the information provided by the ASGI, the petitioner's counsel's stance, and relevant legal precedents.