VERY QUICK DISPOSAL AFTER TRIBUNAL AND QUICK DISPOSAL BY TRIBUNAL- A LEARNING FOR OTHER COURTS AND SOME SUGGESTIONS

[CA DEV KUMAR KOTHARI]

Judgments on the issue in case of the same assesse:

PR. COMMISSIONER OF INCOME TAX Versus M/s IDMC LIMITED 2017 (10) TMI 732 - SUPREME COURT

Pr. Commissioner of Income Tax Versus M/s IDMC Limited - 2017 (2) TMI 644 - GUJARAT HIGH COURT

M/S. IDMC LIMITED VERSUS ASSISTANT COMMISSIONER OF INCOME TAX ANAND CIRCLE, ANAND 2016 (5) TMI 541 - ITAT AHMEDABAD

The order of Ld. CIT(A)-IV, Baroda was dated 23.11.2012 pertaining to A.Y. 2006-07.

Fast track justice:

From the list of orders and judgments as given with citation above we really get lot of satisfaction that in this case matter has moved very fast after tie disposal of appeal by Tribunal on 05.04.2016.

The high Court rendered judgment on 25.01.2017  that is within ten months from order of tribunal.

The Supreme Court rendered judgment on  13.10.17 that is in less than nine months.

It seems that before the Tribunal the matter moved a bit slow. The order of CIT(A) was dated 23.11.2012. Assesse had time to file appeal by 22.01.13. The order of Tribunal is dated 05.04.16. We find time taken at Tribunal of about 38 months. This is a bit slower in comparison with speed shown before High Court and the Supreme Court, still is very mush satisfactory and can be called speedy disposal.

Tax matters can be decided more quickly by:

(a) Practice of partial disposal of appeal on covered matters can be quickly done and other aspects can be decided in usual course. This can be adopted at level of CIT(A), Tribunal, High Court and the Supreme Court.

 (b) Increasing scope of disposal by Single Member Bench of Tribunal (SMC) by including covered matters and prescribing  limit  with reference to  tax effect up to ₹ 25 lakh instead of assessed income of ₹ 50 lakh. At present vide  section 255.3 of the Income-tax Act, 1961 for example. 

(c) Single Judge Bench  - single judge bench of  High Court can be authorised to hear and decide tax appeals  for covered matters and also appeals involving tax effect of less than Rs. one crore.  At present tax appeal is to be heard by a division bench consisting of at least two judges. ( vide S. 259 of Income-tax Act for example) 

Reduction of tax disputes is desirable:

Really speaking tax matters have attained reasonable stature as we have broad guidelines on all related aspects. However, tax authorities are indulging into un-necessary litigation by not following even basis rules. For example:

(a) A view in favour of assesse should be adopted, however, tax authorities are in habit of adopting a view in favour of revenue, even if it is patently wrong.

(b) Liberal view on incentives is to be followed so as to achieve purpose of incentive, however, history shows that tax authorities invariably try to apply a view so that incentive can be denied. The case of IMDC Ltd (supra.) is also one such case in which the AO and CIT(A) both denied incentive by adopting approach to defeat purpose of incentive.

(c) Practice of making high pitched assessments, in case of scrutiny assessment, knowingly making wrong additions and disallowances. It is ground reality that more than 80% of additions stand deleted.

(d) Un-settling settled matters by amendments is also a wrong approach at legislative level. for example , we find many  amendments in meaning or definition of income, actual cost, written down value, plant,… etc.

(e) Provisions and litigation  having only effect of deferring a deduction is also not good and involves un-necessary litigation. For example, litigation on stock valuation, S. 40.a, 40.a ia, 43B, and some cases of amortization. Fro revenue it does not matter much if a deduction is allowed in first year or in second or third year. Though, for assesse it can be very substantial to get deduction as soon as possible.

Other Courts must learn for speedy disposal of cases:

The cases of IMDC Ltd (supra.) is an example.

It is very pleasant to note trend of speedy justice in tax matters. We find that many tax cases are decided very quickly, however, some cases are still dragged for long time.

In civil cases disposal can be made within few month ( less than a year), if practice of compulsory filing of all documents relied by petitioner and respondent (opposite party) are followed, and hearing is taken only on disputed matters. There is no need to hear matters on undisputed facts as revealed by documents. However, unfortunately parties make all issues disputed and Courts hear them knowingly that parties are indulging into un-necessary litigation.

Procedures in Civil Courts and Courts trying Criminal matters need to be strengthened and simplified to ensure timely and speedy disposal and rendering of justice.

With due respect author feels that it is wrong to say that there are lack of judges and courts. What is lacking is the spirit to pursue cases by litigants to gain time and also lack of spirit amongst judges also in disposal of cases and allowing advocates to prolong matters which can be decided based on documents which can be filed by parties within a reasonable time.   

Scope of this write-up is on aspect of quick disposal of tax cases. Aspect relating to incentive by way of initial depreciation will be covered in another article.