Hon’ble Bombay High Court Sets Aside The Incentive Plan of CBDT For `Quality Orders’ By Commissioners (A) in the case of The Chamber of Tax Consultants Vs. CBDT.
Office of Commissioner (Appeals) is the first stage in the `Judicial Hierarchy’ to grant the justice to the assessee against the wrongdoings of the lower authorities in terms of high pitched assessments, wrong application of the law or mistakes crept in the assessment or other appelable orders u/s 246A. This office not only grants justice to the assessee but removes the deficiencies, if any, in the orders, committed by the order passing revenue authorities, which helps the higher judicial forums such as Tribunal and Courts to appreciate the facts and law correctly.
However, 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 came as a shock and surprise both for the Tax Advisors and Assessee equally. This plan offered incentive to the CITs(A) for passing `Quality Orders’. It would be interesting to read the meaning of `Quality Orders’ as contained in the said plan:
“The term quality cases is explained as those including cases where -(a)enhancement has been made,
(b) order has been strengthened, in the opinion of the CCID, and
(c) penalty under section 271(1) has been levied by the CIT (A)”
These contingencies as contained in plan point to circumstances where the order passed by the Commissioner(Appeals) is in favour of the revenue. For example this policy refers to the enhancement made by the Commissioner or a case where the Commissioner has levied penalty under section271(1) of the Act. This necessarily refers to enlargement of the assessee’s liability before the Commissioner as compared to what may have been determined by the Assessing Officer.
In terms of the provisions contained in sub-section (1)of Section 119 of the Act, the CBDT may from time to time issue such orders, instructions and directions to other income tax authorities as it may deem fit, for proper administration of the Act and such authorities shall observe and follow the orders, instructions and directions of the board. While granting such wide powers to the CBDT under sub-section (1) of section 119 of the Act, the proviso thereto provides that no such orders, instructions or directions shall be issued, so as to require any income tax authority to make a particular assessment or to dispose of a particular case in a particular manner. In exercise of these powers thus the CBDT cannot issue any instructions or directions to any income tax authority to make a particular assessment or to dispose of a case in a particular manner.
On the writ petition filed by The Chamber of Tax Consultants and other public interest petition, the Hon’ble High Court of Bombay was pleased to set aside the portion of `Quality Orders’ from the said plan of CBDT vide its order on 11th April, 2019.
(The author is a Jaipur based practicing Chartered Accountant and can be reached on 09829063908, [email protected])