CIT Vs Standard Operating Procedure of The Income Tax Department (Supreme Court of India)
The matter before the Supreme Court concerns proceedings arising from directions issued by the Delhi High Court regarding payment of professional bills to panel counsel of the Income Tax Department. At the Supreme Court stage, the Additional Solicitor General appearing for the petitioner sought four weeks’ time to explore the possibility of an amicable settlement with the private respondent. The respondent also indicated willingness to consider an amicable resolution. Accepting the request, the Supreme Court granted four weeks’ time and directed that the matter be listed again on 13 April 2026.
Read HC Judgment: Interest on Delayed Counsel Payments Upheld as Income Tax Department Failed to Justify Delay
The dispute originates from proceedings before the Delhi High Court, where the Income Tax Department filed an application seeking modification of directions issued in paragraph 7 of the High Court’s order dated 29 March 2016. The earlier order had addressed delays in the clearance and payment of bills submitted by panel counsel representing the Department.
In the earlier proceedings, the High Court noted that the charts produced by the Department showed the dates when certain bills were cleared for payment but did not indicate when payments were actually credited to the accounts of counsel through the Real Time Gross Settlement (RTGS) system. The Court referred to the Central Board of Direct Taxes (CBDT) instruction dated 11 April 2012, which required that bills should be scrutinised within 30 days and any deficiency or excess claim should be communicated to counsel within one week of such scrutiny. The instruction also clarified that scrutiny should not be delayed due to non-availability of funds.
