All India Federation of Tax Practioners Vs UOI and Anr. (Delhi High Court)
Introduction: The Delhi High Court, in a recent judgment on the case of All India Federation of Tax Practitioners vs. UOI and Anr., has directed the government to take measures for the prompt disposal of pending tax appeals. The Public Interest Litigation (PIL) filed by the tax practitioners sought expeditious resolution, policy formulation, and increased infrastructure support for Commissioner (Appeals).
Detailed Analysis: The PIL emphasized the need for a policy to ensure timely disposal of appeals, an increase in the number of Commissioners (Appeals), and clear guidelines for chronological disposal. The court considered the impact of delayed appeals on assesses and tax practitioners, prompting the filing of the petition in the interest of the public.
The court reviewed the information provided by the petitioner, the All India Federation of Tax Practitioners, and noted that appeals were causing harassment and financial costs to assesses due to prolonged delays. The petitioner, representing over 5,400 tax professionals, highlighted the impact on tax practitioners and assesses due to delays in disposal.
The court examined the actions of the Commissioners of Income Tax (Appeals) and the directions given by the Central Board of Direct Taxes (CBDT) for the disposal of appeals. The CBDT’s Action Plan for the financial year 2023-24 outlined specific targets for disposing of appeals, considering faceless and non-faceless categories, cumulative pendency, and disposal percentages.
The court acknowledged the efforts made by the CBDT to address the issues raised in the PIL. The updated statistics on sanctioned and working strength of Commissioners (Appeals) were presented, revealing the pendency and disposal figures for different financial years. The court noted that the CBDT has set targets for disposing of appeals and introduced measures like faceless appeals and the Vivad Se Vishwas Scheme.
The court also considered the need to increase the sanctioned strength of Commissioners (Appeals) to expedite the disposal process. The Finance Act, 2023, introduced the concept of joint Commissioner/Additional Commissioners (Appeals) to handle appeals below the threshold of Rs. 10 lakhs.
Conclusion: The Delhi High Court, satisfied with the roadmap presented by the CBDT, disposed of the PIL. The court emphasized the importance of implementing the roadmap diligently and urged the Union of India to consider measures to increase the sanctioned strength of Commissioners (Appeals) for effective disposal of pending appeals. The judgment addressed the concerns raised by tax practitioners and emphasized the significance of timely disposal in the interest of assesses and the public.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The present petition has been filed under Articles 226/227 of the Constitution of India, in the nature of a Public Interest Litigation (PIL) seeking following prayers:-
“a. To formulate a policy and issue necessary directions to Commissioners (Appeals) to take steps for expeditious disposal of appeals or within the time limit envisaged by Section 250(6A) of the Income Tax Act 1961.
b. To increase the number of Commissioners (Appeals) and also provide such other infrastructural support as is required by the Commissioners (Appeals) for disposal of appeals expeditiously.
c. To make clear guidelines for the Commissioner Appeals to dispose of the appeals in a chronological manner and also for passing orders within 10 days after conclusion of hearing or within a reasonable period.”
2. Facts as culled out from the petition filed by the petitioner are as follows:
“2A. That the source of knowledge of the facts stated in the Writ Petition is the information provided by the members of the Petitioner and also the information gathered under the Right to information Act from the offices of the Commissioners of Income Tax (Appeals) in Delhi and from Respondent No. 2 herein i.e. the Central Board of Direct Taxes. On the basis of information, it is an undoubted position that the appeals are decided by Commissioners of Income Tax (Appeals) after long delays, which is causing harassment and cost to the assesses.
2B. That the delay in disposal of appeals by the Commissioners of Income Tax (Appeal) is adversely affecting large number of assesses and it is difficult for all of them to approach this Hon’ble Court. Therefore, this Writ Petition is being filed by the petitioner.
2C. That the present Petition is being filed in the interest of public at large and the assesses under the Income Tax Act and the Tax Practitioners in particular and accordingly, the relief sought in the petition will be in the interest of above persons and no other person / body / Institution is likely to be affected by the orders sought in the writ petition. The petitioner has impleaded Ministry of Finance and Central Board of Direct Taxes as Respondents as the Commissioners of Income Tax (Appeals) are working under their control and direction.
2D. That the Petitioner, All India Federation of Tax Practitioners is one of the oldest and the largest Association of Tax Practitioners in the country. At present it is having more than 5,400 individual tax professionals / Practitioners as its members apart from membership of 1 19 Tax Bar Associations. Accordingly, the Petitioner is representing a large number of Tax Professionals. It is having its central office at 215, Rewa Chambers, 31, New Marine Lines, Mumbai-400020 and also zonal offices at number of other places, including at Delhi. It is registered under the Societies Registration Act 1860.
3. That the Commissioners of Income Tax (Appeals) are working as per the directions of Respondent No. 2. In this regard every year an Action Plan is given by Respondent No. 2 to the Commissioners (Appeals) for disposal of appeals. The Respondents are well aware of the provisions of Section 250(6A) to the Income Tax Act and also about pendency of appeals. In reply to the query raised through one of the member of the petitioner, the Respondent No. 2 has also given information in this regard vide its letter dated 14.12.2012, a copy of which is also enclosed here with this Petition. The Action Plan being issued by the Respondent No. 2 is in disregard to the provisions of Section 250(64) of the Act.”
3. We have heard Ms. Prem Lata Bansal, learned Senior Counsel appearing for the petitioner and Mr. Prashant Meharchandani, learned Senior Standing Counsel, for the respondent No.2/Central Board of Direct Taxes (in short “CBDT”), the contesting party, and perused the documents including the additional affidavit filed on behalf of CBDT in terms of order dated 14.09.2022 and 27.01.2023.
4. The present PIL has been pending since the year 2013 and various orders and directions were being passed by this Court from time to time. We need not dilate on those. What is relevant to consider today is the additional affidavit dated 09.10.2023 filed on behalf of the CBDT.
5. According to the additional affidavit, the CBDT has provided the manner in which, in the past as also in the future, pending appeals are to be dealt with and disposed of expeditiously. The relevant paragraphs of the said additional affidavit showing the road map as to how the department seeks to dispose of pending appeals are extracted hereunder for clarification:
“5. That the updated status report in terms of order dated 18.09.2023 are as under:-
A. Updated statistics for Appellate Authorities*:
