The government is readying to appeal the Delhi high court to erase an unexpected tribunal order stricturing the Income Tax department for failing to proceed against Italian businessman Ottavio Quattrocchi for non-payment of tax on the kickback money he received from the Bofors gun deal.

The department got a favourable order from the Income Tax Appellate Tribunal on December 31 last year against former Bofors agent Win Chaddha's son, Hersh Chaddha, asking him to pay up tax dues on the commission from the gun deal with interest, totalling nearly Rs 50 crore.

The success in getting revenue from a former Bofors agent turned bitter for the Congress-led UPA government when the  ITAT recorded, "Bofors admittedly paid the amounts to the assessee (Chaddha), AE Services, Ottavio Quattrocchi and other entities. Quattrocchi was living in India for a considerable time. The issue about his tax residence status should have been verified." The tribunal asked the I-T department to pursue the case against Quattrocchi to get the tax due from him.

The government's appeal before the HC will highlight how ITAT acted like a constitutional court and passed remarks against persons, including Quattrocchi, who were not present before it to answer the charges. "This is a clear violation of the principles of natural justice," an official said. They said ITAT acted like a constitutional court while dealing with Hersh Chaddha's appeal and "completely misunderstood its position and role under the I-T Act".