The I-T department has lost the opportunity to recover revenues running into thousands of crores after failing to file its appeals before the Bombay High Court within the stipulated period of 120 days. The Bombay High Court has dismissed about 400 appeals recently.
Section 260 A of the Income-Tax Act stipulates that an appeal against the Income-Tax Appellate Tribunal (ITAT) order be filed before the high court within 120 days of receiving the ITAT order. The high court, however, liberally allowed condonation of delays until a Supreme Court order in March this year.
The division bench of justice VC Daga and justice JP Devadhar observed that there was no provision in the I-T Act for the condonation of delay (allowing the appeals to be filed despite a lapse in the stipulated period). As such, the high court does not have the jurisdiction to allow the appeals filed by the I-T department after the lapse of the given period.
The high court order is in line with a Supreme Court judgement, which pertains to a case between Hongo India and the Commissioner of Customs and Excise. The dismissal order that was passed in the appeal in the Bombay High Court was filed by the Commissioner of I-T against Grasim Industries. The other appeals that were dismissed subsequently were also on the same grounds.
The Supreme Court judgement, delivered by a bench of three judges, was cited by the Grasim Industries counsel, while opposing the condonation of delay. Meanwhile, advocate JS Saluja, appearing for the I-T department, contended that as per the provisions of the Limitation Act, the high court has the power to condone delay in matters where the stipulated period has lapsed.
An official of the rank of chief commissioner, I-T told ET: “We would not be able to comment on the developments in the high court until we receive the orders and study it.” The high court is the third appellate authority on tax matters after the commissioner, I-T appeal and ITAT. Since the ITAT is the last fact finding authority on income-tax matters, the high court’s jurisdiction is confined to questions of law involved in tax cases.
A source in the I-T department said filing appeals is a process that involves several departments such as the office of commissioner (I-T), assessing officer and standing committee and the counsel representing the department. The procedure of filing appeals was earlier managed by the officers of ministry of law and justice up to 2006.
Later it changed hands to the I-T department. However, a senior officer of the department said: “Most of the appeals dismissed today are not serious appeals. In most cases, even if the chances of winning the appeals are minimal, the officer decides to file the appeal to be on the safer side. However, there can be still serious cases with a fair chance of winning.”