Allocation of work to Commissioner of Income-tax (Judicial) - Income Tax - Instruction No. 1/2024

Instruction No. 1/2024 F. No. 279/Misc./33/2014-ITJ Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, the 9 th February, 2024 To All Principal Chief Commissioners of Income-tax Subject: Allocation of work to Commissioner of Income-tax (Judicial)-reg. Madam/Sir Consequent upon rollout of faceless assessment and appeals schemes and e-Appeals Scheme, 2023 , and progressive increase in workload, it has become imperative to expand the work jurisdiction and role of CIT(Judicial) [hereinafter referred to as CIT(J)] to account for the recent developments. Accordingly, and in supersession of the existing Instruction No 6/2015 dated 03/07/2015 issued through F. No. 279/Misc/33/2014-lTJ, the CBDT vide the present instruction defines, with immediate effect, the structure, work jurisdiction and domain of CIT(J) as mentioned below: 2. Work Jurisdiction of CIT (J): 2.1 The CIT (J) shall be the nodal office for all matters, including but not limited to those mentioned in Para 3 below, relating to the jurisdictional High Court as also co-ordination with counterparts for other High Court/s and shall be responsible for ensuring that the Departmental view on interpretation of the Income-tax Act, 1961 [hereinafter referred to as the Act] is enforced uniformly and coherently within the jurisdiction of the respective Pr. CCIT. 2.2 The CIT(J) shall assist the Pr. CCIT in supervising the litigation management/judicial functions within the region. 3. Structure: The CIT (J) shall report to the Pr. CCsIT of the region concerned. In the absence of a CIT(J) being posted in a region all the functions and duties meant to be discharged by the CIT(J) shall be discharged by the Addl./Jt. CIT(J). The High Court Cell in respect of each region will be under the administrative control of CIT(J) of that region. 4. Work Domain: (i) The administrative decision to file appeal before High Court will vest in respective CIT/PCIT/CCIT. Based on LIMBS and other available databases, the CIT(J)/Addl./Jt. CIT (J) shall ensure that there is uniformity in the Departmental stand on a particular issue. (ii) In cases involving common issues inputs may be sought from Sr. Standing Counsels by the office of CIT(J)/Addl./Jt. CIT(J) either on its own or on references from PCsIT/CsIT and disseminated to all PCsIT/CsIT offices within the region. (ii) CIT(J)/Addl./Jt. CIT(J) shall be responsible for identification of cases for bunching of appeals pending before the High Court/s based on available records/databank. To identify cases for bunching of appeals and to maintain this database in respect of the ITAT and High Court orders, the PCsIT/CsIT shall submit a Monthly report. in Annexure-A1 on appeals/SLP filed at High Court/Supreme Court, and in Annexure-A2 for cases where appeals/SLP are decided not to be filed at High Court/Supreme Court, respectively to the CIT(J)/Addl./Jt. CIT(J) office. The overall supervision over the process of bunching of appeals in the region shall be exercised by the CIT(J)/Addl./Jt. CIT(J). (iii) The role of CIT(J)/Addl./Jt. CIT(J), in effective representation before High Court is to follow up, through a dedicated High Court Cell, on a day to day and case to case basis, the pronouncements/orders/listing rosters of the High Court(s) concerned. Any findings/ directions of High Court are to be communicated by the High Court Cell immediately to the PCsIT/CsIT and other authorities concerned for follow up action. (iv) CIT(J)/Addl./Jt. CIT(J) shall be responsible for dissemination of settled judicial view based on important decisions of jurisdictional High Court and Supreme Court to the field formations in the Pr. CCIT Region on quarterly basis within 15 days from the end of the quarter. CIT(J)/Addl./Jt. CIT(J) will also co-ordinate with the Directorate of L R to obtain information of cases where Department has accepted a decision. (v) CIT(J)/Addl./Jt. CIT(J) shall be responsible for processing of Central Scrutiny Reports (CSRs) received from the Pr.CsIT/CsIT in respect of appeals before High Court(s) in following cases: i. where tax effect is more than threshold monetary limit and appeal is recommended on merit by PCIT/CIT, or ii. where the tax effect is less than the threshold monetary limit but the case is covered under an exception and appeal is recommended by PCIT/CIT, or iii. Where the tax effect is more than the threshold monetary limit, but appeal is not recommended on merit by the PCIT/CIT. Soft copy of the CSR/appeal folder shall be sent to the CIT(J)/Addl./Jt. CIT(J) electronically as soon as the physical file has been signed by the PCIT/CIT. The physical copy/ file of the same may be sent to CIT(J)/Addl./Jt. CIT(J) in due course. After receipt of the CSR/s, the CIT(J)/Addl./Jt.CIT(J) shall examine, inter alia, whether the appeal proposed is in accordance with the existing instructions, whether the grounds of appeal are suitably framed and whether they are in conformity with the Departmental position/view on the legal issues involved. In case of any defect/ error, the same shall be recorded in the proposal received by him from the PCIT/CIT concerned before sending the file to the CCIT/ panel of CCsIT. For this, the CIT(J)/Addl./Jt. CIT(J) may be made part of the work flow of processing of CSRs in ITBA and the entire process shall be as per time lines given in Annexure-C . Scrutiny reports in respect of writ appeals to division bench of HC against single judge bench order may also be routed through the CIT(J)/Addl./Jt. CIT(J). (vi) Where appeal is not recommended on merit in cases where the tax effect is above the monetary threshold for filing appeals as per extant CBDT Circulars in this regard, approval for the same shall be sought from the Collegium constituted to examine cases for filing appeals [set up vide CBDT's press release dated 07.11.2014] [hereinafter referred to as the Merit Collegium]. In all cases of appeals being filed/decided not to be filed the Central Scrutiny Reports (CSRs) along with the Substantial Questions of Law (SQoL) in those cases shall be sent to the O/o, CIT(J)/Addl./Jt. CIT(J) who shall analyse the same and communicate to the Collegium and/or O/o, PCIT/CIT concerned if the SQoL in a certain case merits change based on the overall requirements as laid out in points (ii) to (iv), above. (vii) The CBDT, vide order F. No.1873/2020-ITA-I dated 25th October 2023 , has clarified that the Pr. CCIT(NaFAC) shall be responsible for ensuring that the Technical Units provide a considered view on legal matters and provide technical support required for the Assessment Units. CIT(J)/Addl./Jt. CIT(J) will work in coordination with Technical Units for maintaining uniformity on legal position and disseminate settled judicial view within the region [FAO / PCIT(AU) / non-faceless AOs]. CIT(J)/Addl./Jt. CIT (J) shall be responsible for communicating the latest directions/orders/judgments in a particular case received from the jurisdictional Assessing Officer or from the Counsels, to NaFAC and NFAC which shall in turn communicate the same to the faceless Assessing Officer and CIT(A)/JCIT(A) for suitable necessary action as per law. Information about writ petitions filed by the assessees/ taxpayers will be passed on to the CIT(J)/Addl./Jt. CIT (J) by the Pr.CCIT/CCIT/DGIT/Pr.CIT/Pr.DIT/CIT. In this respect the Letter dated 05.09.2022 issued vide F.No.279/Misc.42/2011-ITJ may be referred to, regarding the role of Pr.CCIT concerned in defending such cases. (viii) Collegiums for the purpose of 158AB of the Act have been constituted vide order F.No. 370133/123/2022-TPL dated 28th September 2022 [hereinafter referred to as 158AB collegium']. Once decision on filing of appeal on merits is finalized by the Merit Collegium, the appeal may be examined by the 158AB Collegium, in case the appeal is proposed to be deferred. For effective functioning of the same and to ensure uniformity within the region, the CIT(J) [in case of Mumbai and Delhi] or an officer of the rank of Addl./Jt.CIT [for other regions] as nominated by the Pr.CCIT in this regard shall be the Member-Secretary of all 158AB Collegiums. Till such time as a system based solution is not developed and implemented, data in respect of deferred cases and the linked 'other cases' shall be maintained in the O/o, CIT(J)/Addl./Jt.CIT. This information may be maintained in a format similar to form 8A notified vide Notification No. 83/2022/ F. No. 370142/30/2022-TPL dated 12.07.2022 . For this purpose, CIT(J) or Addl./Jt.CIT, nominated by the Pr.CCIT in this regard, shall be provided access to the database of SQsOL/QsOL and the system-based utility for linking the deferred and other cases that will be developed for this purpose. Further, to maintain a complete database of appeal deferred cases, the PCIT/CIT concerned shall transmit the details of cases deferred, to the CIT(J)/Addl./Jt. CIT(J) in accordance with Board's letter in F.No.279/Misc./M-96/2021-ITJ, dated 23.01.2023. CIT(J)/Addl./Jt. CIT (J) shall compile the database of all Forms 8A issued by PCIT/CIT in respect of deferment of appeals before ITAT and High Courts. The database may be used for bunching of appeals with identical questions of law and prioritizing of pending appeals. The CIT(J)/Addl./Jt. CIT(J) shall also ensure regular transmission of the details of Form 8A collated in the region to the Central Monitoring Cell which functions in the Directorate of L R. (ix) The actual filing of appeals before the High Court shall remain the responsibility of the jurisdictional PCIT/CIT. Any work after filing of appeal before the High Court shall be monitored by the CIT(J)/Addl./Jt. CIT(J). Any information required by the High Court shall be made available to the Court by the concerned PCIT/CIT. CIT(J)/Addl./Jt. CIT(J) shall act as a link between the Court and the PCIT/CIT. CIT(J)/Addl./Jt. CIT(J) will also ensure that at least one official is present in the Court at the time of hearing, for taking down instructions. (x) In respect of fresh empanelment of panel(s) of Sr./Jr. Standing Counsels and Special Public Prosecutors it shall be ensured that process for the same is initiated at least 6 months prior to the expiry of the term of the existing panel(s). CIT(J)/Addl./Jt. CIT(J) shall be made part of the Screening Committee and the office of CIT(J)/Addl./Jt. CIT(J) will provide secretarial assistance to the Screening Committee for engagement of Standing Counsels and Prosecution Counsels. Review of performance of the counsels is primarily the responsibility of PCsIT/CsIT. CIT(J)/Addl./Jt. CIT (J) shall be responsible for assisting the PCIT/CIT in the work of reviewing and evaluating their performance. As per the extant Instructions ( Instruction No. 7/2016 dated 07.09.2016 for Standing Counsels and Instruction No. 2/2023 dated 30.11.2023 for SPPs), Pr.CsIT/ CsIT are required to submit reports regularly, in prescribed performance, to the Board regarding performance of the Departmental representatives. The aforementioned reports shall be submitted to CBDT through the O/o, CIT(J)/Addl./Jt. CIT(J) along with recommendations/comments. (xi) The CIT(J)/Addl./Jt. CIT(J) shall maintain a roster to ensure uniform work allocation to all Counsels, hold regular meetings with the Counsels and act as a communication channel to co-ordinate between the Counsels and the Department. The counsels are required to provide a record of their performance on a monthly basis to the CIT(J)/Addl./Jt. CIT(J) by submitting report in proforma 'E' of Instruction 7/2016 dated 07.09.2016 . CIT(J)/Addl./Jt. CIT(J) may ensure regularity in track record of submission of proforma 'E' by the counsels before their bills are cleared by the Pr.CIT/CIT concerned who are the nodal officers for submission of bills by Counsels as per Instruction 7/2016 dated 07.09.2016 . CIT(J)/Addl./Jt. CIT (J) shall be responsible for ensuring effective representation before Courts including attendance of officers during High Court proceedings. (xii) CIT(J)/Addl./Jt. CIT (J) is to assist the Pr.CCIT, who vide CBDT's letter F.NO 278/ M-52/2003 ITJ ( Pt) dated 17.03.2023 has been designated as the Nodal Officer in the Region for receipt of communication and obtaining updating details of pending tax matters from the registry of concerned NCLT/NCLAT Bench. In order for the CIT(J)/Addl./Jt. CIT(J) to assist the Pr.CCIT, in the functions that arise as a result of the Pr.CCIT being nominated as the Nodal Officer with reference to the same, the CIT(J)/Addl./Jt. CIT(J) would be responsible for receipt of all orders from IRP / RP / NCLT/ NCLAT and forward the same to the Jurisdictional officers. CIT(J)/Addl./Jt. CIT(J) would ensure that a suitable panel of Standing Counsels for representing the Department before the NCLT Benches and NCLAT is engaged. CIT(J)/Addl./Jt. CIT(J) shall also serve as a repository of various judicial decisions of Supreme Court / High Court / NCLT / NCLAT on Insolvency and Bankruptcy Code, 2016 (IBC-2016) and the Companies Act, 2013 . Data in respect of such decisions is to be maintained in Annexure D of this Instruction and submitted by the PCIT/CIT concerned to the CIT(J) on a monthly basis within 7 days of the end of the month. (xiii) Data in respect of cases where prosecution is filed shall be submitted by each PCIT/CIT, on a quarterly basis within 15 days from the end of the quarter, to the CIT(J)/Addl./Jt. CIT(J) as per Annexure B of this Instruction. CIT(J)/Addl./Jt. CIT(J) shall maintain a database of prosecution cases and monitor the progress of the same. (xiv) CIT(J)/Addl./Jt. CIT(J) shall be a member of the Regional Technical Committee (RTC). Further, the Addl./Jt.CIT(J) concerned shall the Member(Secretary) of the RTC. (xv) CIT(J)/Addl./Jt. CIT(J) shall also be responsible for collation and onward submission of judicial/appeal/prosecution related reports to authorities concerned. (xvi) It is suggested that regular, preferably quarterly meetings should be taken by the CIT(J) of all the judicial officers (DC/ACIT/ITO(Judicial)) of regional CCIT/PCIT/CIT charges, to share the best practices, sensitize them about the issues being faced by the CIT(J)/Addl./Jt. CIT(J) offices and what is expected of them. All judicial officers in the region should be imparted appropriate training. (Wii) The CIT(J)/Addl./Jt. CIT (J) will function as Nodal Officer for e-Office and LIMBS in the region for: a) User Management in region : As Nodal Officer of LIMBS, the CIT(J)/Addl./Jt. CIT(J) shall coordinate with the Directorate of L R for management of user accounts. (At present all Pr.CCsIT, CCsIT, Pr.CsIT and CSIT are eligible as users of LIMBS). b) Ensuring completeness and accuracy of LIMBS database : The CIT(J)/Addl./Jt. CIT(J) shall be responsible for monitoring the completeness and accuracy of LIMBS data pertaining to all users within the Pr. CCIT region. c) Generating MIS reports : The CIT(J)/Addl./Jt. CIT(J) shall be responsible for generating various kinds of MIS reports from LIMBS and other databases for effective litigation management within the Department. 5. In order for the institution of CIT(J)/Addl./Jt. CIT(J) to function on the framework provided above, necessary manpower and infrastructure may be provided by the Pr.CCsIT. 6. The above may be brought to the notice of all concerned for necessary compliance. Yours faithfully, (Tanay Sharma) Jr. CIT(OSD)-ITJ, CBDT Annexure-A1 (Where appeal/SLP is filed) Sr No (1) Name of the assessee (2) PAN (3) AY (4) Details of Appellate order and date of order (5) Issue(s)/Section(s) involved (6) Tax effect involved (7) Question(s) of Law (8) If appeal/SLP filed despite low tax effect mention reasons * (9) ITA No. /Lodging No./ Appeal No./ SLP No. (HC/SC) (10) * The reasons should invariably include following details: i. If appeal/SLP has been filed despite low tax effect state the exceptior (s) invoked. ii. Whether the issue is recurring in nature. iii. Decision of jurisdiction ITAT/High Court/Other High Court/Supreme Court if any in favor of Revenue. iv. Any other reason. Annexure-A2 (Where appeal/SLP is decided not to be filed) Sr No (1) Name of the assessee (2) PAN (3) AY (4) Details of Appellate order and date of order (5) Issue(s)/Section(s) involved (6) Tax effect involved (7) If appeal/SLP is not filed mention reasons * (8) * The reasons should invariably include following details: i. Whether the decision of ITAT/High Court has been acceptedon merit (see the CSR from the PCIT/CIT) ii. Whether the decision of ITAT/High Court is found not acceptable on merit but appeal has not been filed only due to low tax effect. iii. Whether the issue is recurring in nature. iv. Decision of jurisdiction ITAT/ High Court/Other High Court /Supreme Court if any in favor of Assessee. v. Any other reason. Annexure-B (Data in respect of cases where prosecution is filed) Complaint No. with Date of filing Name of the Complaint Officer with Civil List No. / Disposition List No. Name of person against whom complaint filed with its latest jurisdiction AY/FY PAN of the person mentioned in Col (3) Section under which complaint filed (1) (2) (3) (4) (5) (6) Name of the Court in which complaint filed Date of Compounding Petition, if any Date of disposal of the Compounding Petition Compounding Fees paid, if any Date of disposal of the Complaint Date of filing of further appeal, if any, before HC/SC with reference number (7) (8) (9) (10) (11) (12) Annexure C Time Line for filing of appeal in the High Court S.No. Stages No. of Days Total Time 1 Receipt of Appeal order in the office of PCIT/CIT 0 Day 0 Day 2 Entry in relevant register linking with old appeal folder of the case from where appeal to ITAT was authorized 1 Day 1 Day 3 Sending the order to AO for necessary action along with a copy to Range Head 2 Days 3 Days 4 Submission of CSR in the prescribed proforma by AO to Range Head after giving appeal effect 30 Days 33 Days 5 Submission of CSR by Range Head to PCIT/CIT 10 Days 43 Days 6 Decision making by PCIT/CIT including consultation with the Sr. Standing counsel, if required and submission to CIT(J) 15 Days 58 Days 7 Processing in the O/o CIT(J) 7 Days 65 Days 8 Approval by Pr. CCIT/Merit Collegium 7 Days 72 Days 9 In case of disagreement, file to be put up to Pr. CCIT (Decision of PCCIT) 3 Days 75 Days 10 Sending file to CIT (J) who will in turn send it to the PCIT/CIT after retaining a dummy folder of the original appeal folder 3 Days 78 days 11 Sending appeal folder to the Standing Counsel by PCIT/CIT for drafting appeal memo 2 Days 80 Days 12 Drafting of Appeal memorandum by the Counsel and return to PCIT/CIT 20 Days 100 Days 13 Vetting / Preparation of sets with annexure in the O/o Pr. CIT and sending it back to the Standing Counsel for filing 15 Days 115 Days 14 Actual filing in the HC registry 3 Days 118 Days 15 Intimation of Diary/ Lodging No to the O/o CIT/CIT(J)/ HC cell along with copy of the appeal memo 2 Days 120 Days * In case a reference for deferring of appeal filing is made to the 158AB collegium, timelines as per Section 158AB of the Act should be adhered to. Annexure-D (Data of judicial decisions of NCLT/NCLAT on Insolvency and Bankruptcy Code, 2016 (IBC-2016) and the Companies Act, 2013) Sr. No. (1) Name of the assessee (2) PAN (3) Details of IM*/NCLT/ NCLAT order and date of order (4) Issue(s)/ Section(s) involved (5) Department's claim involved (Rs.) (6) Date of filing claim by Dept. (7) Jurisdictional Pr.CIT/CIT (8) Status of proceeding (9) Name of Counsel engaged (10) *IM - Information Memorandum