I am attaching original submission with the relevant case . So that one may take note of relevancy of the subject matter and also parallel Judgments in the case.
God Bless you,
Shah D J
DIT vs. Credit Agricole Indosuez (Bombay High Court) (No. 1)
| COURT: | Bombay High Court |
| CORAM: | M. S. Sanklecha J, N. M. Jamdar J |
| SECTION(S): | 260A |
| GENRE: | Domestic Tax |
| CATCH WORDS: | strictures |
| COUNSEL: | Madhur Agrawal, P.J. Pardiwalla |
| DATE: | June 17, 2015 (Date of pronouncement) |
| DATE: | July 29, 2015 (Date of publication) |
| AY: | 1997-98 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| Strictures passed regarding the "casual and callous" and "frivolous" manner in which senior officers of the dept authorize filing of appeals. Strictures also passed against counsel for acting as a "mouthpiece" of the Dept in persisting with unmeritorious appeals. CBDT directed to take appropriate action | |
The manner in which the appeal has been filed and prosecuted with regard to the proposed questions 1, 2 and 3 was casual and callous, as the following facts would demonstrate:
(i) In respect of Question No.1 the Revenue sought to agitate an issue contrary to its stand before the Tribunal. The Revenue's prayer before the Tribunal, was to declare that interest income earned on NOSTRO account is taxable. The impugned order of the Tribunal granted the Revenue's prayer and held that interest earned on NOSTRO account is taxable. Before us, the question framed/agitated was that the Tribunal erred in granting
interest on NOSTRO account. It is beyond comprehension as to how a party can be aggrieved by an order that grants its prayer.
interest on NOSTRO account. It is beyond comprehension as to how a party can be aggrieved by an order that grants its prayer.(ii) Question Nos.2 and 3 as framed, were conceded by the Revenue at the hearing before the Tribunal. Nevertheless, the Revenue sought to challenge what has not been contested before the Tribunal. This without even a whisper as to why the concession made before the Tribunal was not correct or that subsequent decisions of Court makes the concession before the Tribunal not sustainable in law.
(iii) The Appeal memo has been signed by a senior officer of the Revenue viz. Director of Income-tax (IT) and he has also directed the Asst. Director of Income-tax (IT)I(2), Mumbai to file this appeal. Either there is no application of mind to the order of the Tribunal before filing of this appeal or the Revenue is deliberately seeking to keep the pot boiling, so that uncertainty is kept alive. It shows the casual attitude of the Revenue in filing appeals. This is not the first of its kind. We had earlier also passed orders disapproving this conduct of the revenue, but there is no improvement. If filing of such appeals on questions (1), (2) and (3) by the Revenue without justification is unacceptable, the counsel for the Revenue persisting in arguing those questions of law taking valuable time of Court is further objectionable. Such frivolous appeals add to the burden of the Court and thoughtless prosecution of these takes time of the Court which could be utilised for more meritorious (debatable) cases.
(iv) The manner in which sometimes the unmeritorious appeals are persisted by the advocates for the Revenue reminds us of the famous observations of Mr.Justice Crampton in R v O'Connell (1844) 7 ILR 261 @ 312 "Another doctrine broached by another eminent counsel I cannot pass by without a comment. That learned counsel described the advocate as the mere mouthpiece of his client, he told us that the speech of the counsel was to be taken as that of the client; and thence seemed to conclude that the client only was answerable for its language and sentiments. Such, I do conceive, is not the office of an advocate. His office is a higher one. To consider him in that light is to degrade him. I would say of him as I would say of a member of the House of Commons – he is a representative, but not a delegate. He gives to his client the benefit of his learning, his talents and his judgment; but all through he never forgets what he owes to himself and to others. He will not knowingly misstate the law – he will not wilfully misstate the facts, though it be to gain the cause for his client. He will ever bear in mind that if he be the advocate of an individual, and retained and remunerated (often inadequately) for his valuable services, yet he has a prior and perpetual retainer on behalf of truth and justice; and there is no Crown or other licence which in any case, or for any party or purpose, can discharge him from that primary and paramount retainer."
(Emphasis supplied)
(Emphasis supplied)
(v) Undoubtedly, an Advocate has to fearlessly put forth his client's point of view, however the same has to be tempered /guided by truth and justice of the dispute. In matters of tax, justice requires that there must be certainty of law which presupposes equal application of law. Thus where the issue in controversy stands settled by decisions of this Court or the Tribunal in any other case and the Revenue has accepted that decision, then in that event the Revenue ought not to agitate the issue further unless there is some cogent justification such as change in law or some later decision of an higher forum etc. then in such cases appropriately the appeal memo itself must specify the reasons for preferring an appeal failing which at least before admission the officer concerned should file an affidavit pointing out the reasons for filing the appeal. It is only when the Court is satisfied with the reasons given, that the merits of the issue need be examined of purposes for admission. (Please see ITA No. 37/2013 CIT vs. M/s. Procter and Gamble Home Products Ltd dated 19/1/2015; ITA No.269/2011 CIT vs. SBI dated 4/2/2015; ITA No.330/2013 Director of I.T. vs. CitiBank NV dated 11/3/2015).
(vi) Filing of appeal under Section 260A of the Act is a serious issue. The parties who seek to file such appeals (which are normally after two tires of appeal before the Authorities under the Act) must do so after due application of mind and not raise frivolous / concluded issues. This is certainly expected of the State.
The Registry has informed us that out of 4784 appeals from the order of the Tribunal filed in this Court during the period 01/01/2014 to 01/06/2014 the appeals filed by the Revenue are 3968 and only 816 by the class of Assessee as a whole.
(vii) We direct the Registry and also the Counsel appearing for the Revenue to forward a copy of this order to CBDT. What could possibly be done is to provide an inhouse committee of senior officers of the Revenue to review decisions taken in respect of appeals already filed and pending. If it is found that questions raised are covered by any decision of this Court or Apex Court or it relies upon an earlier decision of the Tribunal which has been accepted by the Revenue as no appeal there from has been filed then they could be separately classified. On completion of the above exercise such appeals could be either withdrawn and/or dismissed as not pressed.
Related Judgements
- DIT vs. Credit Agricole Indosuez (Bombay High Court) (No. 2) Interest on income tax refund is not effectively connected with the PE (Permanent Establishment) either on asset test or activity test. Therefore, taxable under the Article 11(2) of Indo Netherlands tax treatyRead more ›
- Thermax Babcock & Wilcox Ltd vs. CIT (Bombay High Court) High Court lays down zero-tolerance policy over adjournments. Threatens to dismiss appeals, hear them ex-parte or and/or impose costs if counsel are not prepared(i) We have noted that the Final Hearing Board consists of all Appeals of 2002. First two matters have been adjourned by us only because the…
- CIT vs. Sairang Developers and Promoters Pvt.Ltd (Bombay High Court) High Court imposes costs of Rs. 50,000 on AO for filing frivolous appeal & wasting public money & judicial timeThough the Bench clearly indicated to the department's counsel that the appeal had no merit and gave the department an opportunity to withdraw, the department did not do so….
- P. C. Joshi vs. UOI (Bombay High Court) A Writ Petition was filed to challenge the levy of service-tax on advocates. It was claimed that an advocate renders services which cannot be said to be commercial or business like. They cannot be equated with the service providers mentioned…Read more ›
- DIT vs. M/s. Societe Generale (Bombay High Court) The factual situation the backdrop of which this question is raised to be most unfortunate, disturbing and dangerous to say the least. The Tribunal as a matter of routine goes on consolidating appeals …. We think that our observations made above are enough to guide the Tribunal and we…
CIT vs. Dalmia Dyechem Industries (Bombay High Court)
| COURT: | Bombay High Court |
| CORAM: | M. S. Sanklecha J, N. M. Jamdar J |
| SECTION(S): | 271(1)(c) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | concealment of income, furnishing inaccurate particulars of income, penalty |
| COUNSEL: | A. K. Jasani |
| DATE: | July 6, 2015 (Date of pronouncement) |
| DATE: | July 29, 2015 (Date of publication) |
| AY: | 2003-04 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 271(1)(c): The rigors of penalty provisions cannot be diluted only because a small number of cases are picked up for scrutiny. No penalty can be levied unless if assessee's conduct is "dishonest, malafide and amounting concealment of facts". The AO must render the "conclusive finding" that there was "active concealment" or "deliberate furnishing of inaccurate particulars" | |
(i) Section 271(1)(c) of the Act lays down that the penalty can be imposed if the authority is satisfied that any person has concealed particulars of his income or furnished inaccurate particulars of such income. The Apex Court in Commissioner of Income Tax Vs Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC) applied the test of strict interpretation. It held that the plain language of the provision shows that, in order to be covered by this provision there has to be concealment and that the assessee must have furnished inaccurate particulars. The Apex Court held that by no stretch of imagination making an incorrect claim in law, would amount to furnishing inaccurate particulars.
Vs Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC) applied the test of strict interpretation. It held that the plain language of the provision shows that, in order to be covered by this provision there has to be concealment and that the assessee must have furnished inaccurate particulars. The Apex Court held that by no stretch of imagination making an incorrect claim in law, would amount to furnishing inaccurate particulars.(ii) Thus, conditions under Section 271(1)(c) must exist before the penalty can be imposed. Mr.Chhotaray tried to widen the scope of the appeal by submitting that the decision of the Apex Court should be interpreted in such a manner that there is no scope of misuse especially since minuscule number of cases are picked up for scrutiny. Because small number of cases are picked up for scrutiny does not mean that rigors of the provision are diluted. Whether a particular person has concealed income or has deliberately furnished inaccurate particulars, would depend on facts of each case. In the present case we are concerned only with the finding that there has been no concealment and furnishing of incorrect particulars by the present assessee.
(iii) Though the Assessee had given interest free advances to it's sister concerns and that it was disallowed by the Assessing Officer, the Assessee had challenged the same by instituting the proceedings which were taken up to the Tribunal. The Tribunal had set aside the order of the Assessing Officer and restored the same back to the Assessing Officer. Therefore, the interpretation placed by Assessee on the provisions of law, while taking the actions in question, cannot be considered to be dishonest, malafide and amounting concealment of facts. Even the Assessing Officer in the order imposing penalty has noted that commercial expediency was not proved beyond doubt. The Assessing Officer while imposing penalty has not rendered a conclusive finding that there was an active concealment or deliberate furnishing of inaccurate particulars. These parameters had to be fulfilled before imposing penalty on the Assessee.
(iv) The case of Commissioner of Income Tax Vs. Zoom Communications P.Ltd. [ 2010] 327 ITR 510 (Delhi) is clearly distinguishable on facts. In that case the Assessee had conceded before Assessing Officer that it's action of claiming revenue deductions was not correct at all. It was not the case of the Assessee therein, throughout the proceedings, that the deductions carried out by the Assessee was a debatable issue. The Delhi High Court noted that even before it the Assessee could not explain the circumstances and it's conduct.
Related Judgements
- DCIT vs. Nepa Limited (ITAT Indore) (i) It is incumbent upon the Assessing Officer to state whether penalty was being levied for concealment of particulars of income by the assessee or whether any inaccurate particulars of income had been furnished by the assessee. There are two…Read more ›
- Rushi Builders and Developers vs. ACIT (ITAT Mumbai) The disallowance of expenditure was attracted due to non-deduction of TDS and it cannot be said to be a case of concealment of income or furnishing of inaccurate particulars of income. The levy of penalty u/s.271(1)(c) of the Act is not attractedRead more ›
- Mitsu Industries Ltd vs. DCIT (Gujarat High Court) it is incumbent upon the AO to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income have been furnished by the assessee. In the absence…Read more ›
- Global Green Company Limited vs. DCIT (ITAT Delhi) Despite the insertion of sub-section (1B) to s. 271, the necessity for "prima facie satisfaction" for initiation of penalty proceedings continues to be a jurisdictional fact. The AO has to record the finding that there was concealment of income. In the s. 143(3) assessment order, the AO has not…
- CIT vs. Sania Mirza (Andhra Pradesh High Court) There is nothing to suggest that the assessee acted in a manner such as to lead to the conclusion that she had concealed the particulars of her income or had furnished inaccurate particulars of income. As the amount of Rs.30,63,310 was shown by her in the return, it…
Hinduja Global Solutions Ltd vs. UOI (Bombay High Court)
| COURT: | Bombay High Court |
| CORAM: | M. S. Sanklecha J, N. M. Jamdar J |
| SECTION(S): | 253 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | strictures |
| COUNSEL: | F. V. Irani |
| DATE: | July 16, 2015 (Date of pronouncement) |
| DATE: | July 30, 2015 (Date of publication) |
| AY: | 2009-10 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| Action of the ITAT in disregarding its own order without reason and remanding matter to AO for fresh consideration is "arbitrary" and "failure to perform basic judicial function" and a "lapse" which should not occur again. | |
The issue before the Tribunal was regarding disallowance made on account of claim for deduction under Section 10A of the Act. This very issue was covered in favour of the Petitioner by the decision of the Tribunal for A.Y. 2005-2006 in the Petitioner's own case. The departmental representative before the Tribunal also accepted the position. Inspite of the agreed position between the parties, the Tribunal by the impugned order yet remands this very issue to the Assessing Officer for fresh examination/determination. This is without in any manner even attempting to indicate why and how its earlier decision will not apply to the facts for the subsequent Assessment year. The Tribunal should not completely disregard its earlier order without some reason. This is the minimum expected of any quasi judicial / judicial authority. If the Tribunal has failed to perform it's basic judicial functions in such arbitrary manner, the approach of the Tribunal must be corrected, so as to ensure that such lapses do not occur again.
of claim for deduction under Section 10A of the Act. This very issue was covered in favour of the Petitioner by the decision of the Tribunal for A.Y. 2005-2006 in the Petitioner's own case. The departmental representative before the Tribunal also accepted the position. Inspite of the agreed position between the parties, the Tribunal by the impugned order yet remands this very issue to the Assessing Officer for fresh examination/determination. This is without in any manner even attempting to indicate why and how its earlier decision will not apply to the facts for the subsequent Assessment year. The Tribunal should not completely disregard its earlier order without some reason. This is the minimum expected of any quasi judicial / judicial authority. If the Tribunal has failed to perform it's basic judicial functions in such arbitrary manner, the approach of the Tribunal must be corrected, so as to ensure that such lapses do not occur again. Note: Similar strictures against the ITAT have been passed in DIT v. Societe Generale, Madhukar Thakroor v. ITAT, R. W. Promotions v. ITAT, CIT vs. Gauthamchand Bhandari 347 ITR 491, 499 (Kar) and CIT Vs. Ram Singh (Rajasthan High Court). See also post where suggestions have been given on how to rectify the sorry state of affairs
Related Judgements
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- CIT vs. Reliance Infrastructure Ltd (Bombay High Court) The department conceded before the Tribunal that the issue in the appeal was covered in favour of the assessee by the judgement of the Supreme Court in CIT v/s Tulsyan NEC Ltd 330 ITR 226 (SC). However, despite this, the…Read more ›
- CIT vs. Kirloskar Oil Engines Ltd (Bombay High Court) Dept given "last opportunity" and warned of "heavy costs" for wasting judicial time by filing appeal on covered mattersWe are afraid that if the Revenue persists with such stand and as has been turned down repeatedly, that would defeat the very object and purpose of the schemes and…
- CIT vs. State Bank Of India (Bombay High Court) When the Revenue challenges the order of the Tribunal which in turn relies upon another decision rendered by it on the same issue, then in cases where the Revenue has accepted the order by not preferring any Appeal against the earlier order, the Revenue should not challenge the subsequent…
- Kansai Nerolac Paints Ltd vs. DCIT (Bombay High Court) S. 254: If a legal issue is raised (even for the first time) ITAT has the duty to deal with it and cannot remand it to lower authoritiesThe Tribunal should have answered the legal issue itself. The Tribunal was not prevented in any manner and in law from…
Hinduja Global Solutions Ltd vs. UOI (Bombay High Court)
Action of the ITAT in disregarding its own order without reason and remanding matter to AO for fresh consideration is "arbitrary" and "failure to perform basic judicial function" and a "lapse" which should not occur again.
The Tribunal should not completely disregard its earlier order without some reason. This is the minimum expected of any quasi judicial / judicial authority. If the Tribunal has failed to perform it's basic judicial functions in such arbitrary manner, the approach of the Tribunal must be corrected, so as to ensure that such lapses do not occur again
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