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2019 Supreme(Bom) 519
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Akil Kureshi, Sarang V. Kotwal, JJ.
Chamber of Tax Consultants, Mumbai - Appellant
Vs.
Central Board Of Direct Taxes, Department of Revenue, Ministry Of Finance, Government of India, New Delhi - Respondent
Writ Petition No. 3343 of 2018, Public Interest Litigation No. 144 of 2018
Decided On : 11-04-2019
S.E. Dastur, Adv., Vipul Joshi, Adv., Harsh Kothari, Adv., Abhishek Padwalkar, Adv., Dharan V. Gandhi, Adv., Anil Singh, Adv., Sham V. Walve, Adv., Ritika Agarwal, Adv., Deepti Jethva, Adv.
Headnote:
Income Tax Act, 1961 – Sections 119,250(6A),246A,271(1) - Challenge - Petitioners of Public Interest Litigation have also challenged same plan - Challenge however is confined to the portion of plan, where CIT Appeals have been given higher weight age for disposal of Appeals by quality orders - CBDT has framed said plan for financial year - Preamble of this document sets out the purpose for framing said plan and reads as under - Action Plan for 2017-18 was a comprehensively re-modeled plan that sought to address all current priorities in a holistic manner - It laid special emphasis on a number of critical areas such as litigation management improving quality in diverse areas of work and strengthening compliance and enforcement functions - Plan worked well and resulted in enhanced levels of performance in all functions across board - Action Plan for 2018-19 retains broad structure of plan for 2017-18 and seeks to consolidate achievements made, while reemphasising priorities within the framework of overall Vision - A new chapter on Widening of Tax Base has been added so as to highlight critical importance of this area - Chapter on Audit has been omitted since the CITs(Audit) are already functioning under instructions and SOPs formulated by Directorate of Income-tax (Audit and Inspections) - Separate chapter on Prosecution and Compounding has been omitted and the relevant targets in consolidated form have been incorporated in Chapter on Assessment Units (prosecution targets for TDS units already form part of the Chapter on TDS) - Targets in various key result areas have been re-calibrated in light of experience gained - Whether any of cases reported deserve the additional credit and convey same through a DO letter to the CIT(A), which can be relied upon while claiming the credit at year end - Whether decided in favour or against revenue where supervisory Pr CCIT/CCIT is of view that the CIT(A) has devoted more time for ascertaining the facts and passed exceptionally well-reasoned and speaking order by carefully applying mind to the facts of case and considering applicable judicial precedents – Held, Court do not think that these guidelines in any manner breach reasonableness or can be stated to be arbitrary or illegal - These guidelines are for general directives and prescriptions to on one hand enable the revenue to collect taxes which are otherwise due and on other hand to assess work output of Appellate Commissioners which in any organization is of considerable importance – Court also do not think that the guidelines have undertone of giving priority to the issues which concern the revenue more than assesses - As noted the directives include giving priority to old cases of small assesses - If CBDT also recognizes that appeals involving high tax effect are most likely to be more voluminous involving complex legal disputes prescription of higher units for disposal of such cases, can neither be stated to be arbitrary nor unreasonable nor can be seen as restricting discretion of Appellate Commissioner- Court do not accept the suggestion that such guidelines or prescriptions could possibly result in denial of fair hearing to assesses - Reference in policy to "unblock" or "unlock" revenue blocked cannot be read in isolation and must be understood in larger context of whole document - Before appellate Commissioner essentially assessees who are aggrieved by the orders of assessing officers who would be in appeal- Pending such appeals stay of tax recovery would in many cases be granted conditionally or unconditionally - It is only after appeal is decided by Commissioner (Appeals) that further recovery of tax if so confirmed can be made - Expression "to unlock" revenue must be understood in this background- policy nowhere expects the disputed tax demand would be confirmed whether justified or not - In a given case it may happen that upon disposal of appeal, tax provisionally collected may become returnable - Board may from time to time issue such orders and directions to other income-tax authorities as it may deem fit for proper administration of this Act and such authorities and all other persons employed in execution of this Act shall observe and follow such orders instructions and directions of Board - Petitions are disposed of
1. Heard learned Counsel for the parties for final disposal of the Petitions.
2. The grievances of the Writ Petitioners and the Public Interest Litigation Petitioners substantially overlap. We may record brief facts. The Writ Petition is filed by the Association of Tax Consultants and its office bearers. They have challenged a portion of "Central Action Plan" (hereinafter referred to as 'the said plan') prepared by Central Board of Direct Tax (for short 'CBDT') for the financial year 2018-2019. We shall take a detail note of the relevant provisions contained in this plan later. For the moment we may note that this plan contains various provisions made by CBDT setting out targets of tax collection, disposal of cases by income tax authorities and for awarding points for such disposals. The grievances of the Petitioners relate to two areas of this plan. Petitioner's first grievance is in respect of time line set and the directions to the Commissioner (Appeals) for deciding appeals within such time. According to Petitioners such targets and time limits would put unnatural pressure on the Commissioner to decide the cases in a hasty manner, which has every possibility of denying a fair hearing to the assessee. Second area of the Petitioners' grievance is with respect to allocation of units for disposal of what has been referred to as "quality orders". The Petitioners would point out that these quality orders are those which result in favour of the department. According to Petitioners granting more weight age to such orders, would have the possibility of influencing the outcome of the Appeals before the Appellate authorities.
3. The Petitioners of the Public Interest Litigation have also challenged the same plan. The challenge however is confined to the portion of the plan, where the CIT Appeals have been given higher weight age for disposal of Appeals by quality orders.
4. The CBDT has framed the said plan for the financial year 2018-2019. The preamble of this document sets out the purpose for framing the said plan and reads as under;
"The Vision 2020 document adopted by the Income-tax Department envisages an efficient and effective tax administration, progressive tax policy and improved tax compliance. The Action Plan 2018-19 must work towards accomplishing this vision.
The Action Plan for 2017-18 was a comprehensively re-modeled plan that sought to address all the current priorities in a holistic manner. It laid special emphasis on a number of critical areas such as litigation management, improving quality in diverse areas of work and strengthening compliance and enforcement functions. The plan worked well and resulted in enhanced levels of performance in all functions across the board.
This Action Plan for 2018-19 retains the broad structure of the plan for 2017-18 and seeks to consolidate the achievements made, while reemphasising priorities within the framework of the overall Vision. A new chapter on Widening of Tax Base has been added, so as to highlight the critical importance of this area. The Chapter on Audit has been omitted, since the CITs(Audit) are already functioning under instructions and SOPs formulated by the Directorate of Income-tax (Audit and Inspections). The separate chapter on Prosecution and Compounding has been omitted and the relevant targets, in consolidated form, have been incorporated in the Chapter on Assessment Units (prosecution targets for TDS units already form part of the Chapter on TDS). Targets in various key result areas have been re-calibrated in the light of experience gained."
5. Chapter I of the plan sets out targets for tax collection. It contains goals for major head wise direct tax collection for the financial year 2018-19. Such targets are broken up region wise, keeping in view revenue potential of the region.
Chapter III of the plan pertains to Litigation Management. The Petitione
