In re Standard Operating Procedure of The Income Tax Department (Delhi High Court)
The application before the Delhi High Court was filed by the Income Tax Department seeking modification of the directions issued in paragraph 7 of the Court’s order dated 29 March 2016 concerning the clearance of bills submitted by panel counsel.
In the earlier order, the Court had examined the issue of outstanding payments to panel counsel. The records presented to the Court showed the dates on which some bills had been cleared for payment but did not specify when the payments were actually credited to the accounts of the counsel through the Real Time Gross Settlement (RTGS) system. Reference was made to an instruction dated 11 April 2012 issued by the Central Board of Direct Taxes. The instruction required that bills submitted by counsel should be scrutinized within thirty days, and any deficiency or excess claim should be communicated within a week of such scrutiny. It also clarified that scrutiny should not be delayed due to non-availability of funds.
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During the proceedings, some former panel counsel informed the Court that their pending bills had remained unpaid for more than six months, including retainership amounts. Consequently, the Court had directed the Department to issue fresh instructions mandating that if there was a delay of more than three working days after a bill had been cleared for payment, the Department would be liable to pay interest for the delayed period at the same rate as applicable to refunds issued to assessees. The instructions were also required to provide that if there was deliberate non-compliance, interest for the period beyond three months could be recovered from the salary of the responsible officers.
