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File appeals on merit: CBDT to taxmen
July, 27th 2015

Disapproving of the 'casual' attitude of taxmen in filing appeals and pursuing litigation in important revenue matters, the CBDT has asked the I-T department to take legal recourse only in "deserving" cases.

In a departmental communication issued early this month, the Central Board of Direct Taxes has questioned the "apathy" of the department officials on these matters, citing at least four cases where the the taxman received severe flak from the courts and other judicial forums like the Income Tax Appellate Tribunal (ITAT).

"Needless to say that the courts are taking a stern and inclement view as far as department's actions in litigation matters is concerned. Further, besides financial costs, litigation also entails tarnishing the image of the department and straining its resources," the CBDT, the apex policy making body of the Income Tax department, said.

The Board, which has been asking the taxman to cut down on frivolous litigation in order to usher in a non-adversarial tax regime in the country, said filing of appeals or any other legal recourse should be the undertaken only in "deserving" cases.

"The significance of filing appeal and pursuing litigation only in deserving cases cannot be over-emphasised, more so in the backdrop of the fact that department is facing shortage of officers at all levels. It is imperative that the available resources are optimally utilised to obtain maximum benefit out of litigation," the latest directive, accessed by PTI, said.

The CBDT order, while rapping the department on the knuckles, cites an example where in a "sensitive" case of 2009 no appeal was made for over five years and when the case reached the Supreme Court, the apex court took a "serious view" of the incident and directed the department to "take action" against all those officials who were responsible for the negligence in the said case. The IT authorities had not filed an appeal in the case and belatedly moved a Special Leave Petition in the apex court.

The CBDT called this case a "shocking incident" and a perfect example of "apathy" exhibited by department officials in pursuing litigation issues.

The Board goes on to cite three more "glaring" cases of lack of discipline in the department which led to the courts or bodies like the Income Tax Appellate Tribunal (ITAT) issuing strictures or voicing displeasure against them.

"It has been noted that despite several instructions on the subject, necessary due diligence and caution is not being exercised while granting authorisation for filing of appeals. Several decisions have been noted where courts have taken an adverse view against the department," the CBDT said.

As part of its larger strategy to reduce litigation and public harassment, the CBDT had in November last year asked the taxman to issue summons to assessees only in "deserving cases".

The Board while issuing these directions had said the I-T department has been pulled up by bodies like CAG and courts and asked senior officers to make "merit" the essential criteria for moving forward in these instances.

"Senior officers have been directed to ensure that appeals are filed only on the merits thereof and not merely on the tax effect involved. Cases have separately been brought to the attention of the officers wherein tribunals/courts have commented adversely on frivolous filing of appeals," it said.

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