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CBDT Talks Tough! Warns CsIT(A) And CCsIT Against Back-Dating Orders, Malafide Intent And Corruption

The CBDT has finally taken formal notice of the alleged malpractices being indulged in by Commissioners of Income-tax (Appeals) with the active/passive connivance of the Chief Commissioners.

The CBDT has issued a stern directive dated 8th March 2018 stating that the defiance by the CsIT(A) of the Manual of Office Procedure relating to the passing of appellate orders “gives rise to suspicions about backdating of orders and/ or malafide intent” on the part of the concerned officer.

The CBDT has also scuttled the defence of the CsIT(A) that the office staff is to blame for the irregularities by stating that “supervisory failure is also violative of Rule 3(2)(i) of the CCS (Conduct) Rules, 1964”.

The CBDT has given instances of cases where the CsIT(A) have allowed appeals relating to unexplained cash credits on the technical ground that the AOs did not conduct proper inquiries or provide cross-examination even though they (the CsIT(A)) are empowered and statutorily obliged to conduct necessary inquiries and cross-examination themselves.

The CBDT has also sent a clear warning to the Chief Commissioners of Income-tax that if they do not rein in the wayward ways of the CsIT(A)’s and “prevent misdemeanor”, they will be “vicariously” held guilt of “corruption”.

It is also worth remembering that the CBDT’s warnings cannot be dismissed as empty threats. On an earlier occasion, the Finance Ministry suspended a Dy CIT for harassing a taxpayer by demanding a bribe in a scrutiny case.

The CBDT has also adopted a ‘zero-tolerance policy‘ towards tax defaulters and sent several to the Tihar Jail for non-compliance with TDS laws.



F.No. DGIT(Vig.)/HQ/SI/Appeals/2017-18/9959
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi-110001

Dated: 8th March, 2018

Subject: Irregularities in Appellate Orders — instructions — reg.

CBDT has issued Instruction No. 20/2003 dated 23.12.2003 directing for issue of appellate orders within 15 days of the last hearing. The Instruction was reiterated vide CBDT letter F. No. 279/Misc.53/2003-ITJ dated 19.06.2015 for strict compliance. The instructions are also applicable to orders passed by the CIT (Administrative)/ CCIT as regards matters within their purview under different sections of the Income Tax Act. The idea behind such stipulations was to alleviate undue hardship to the assessee and to have a smooth interface with the assessee.

2. Further, the Manual of Office Procedure issued by the Directorate of Organisation and Management Services mandates immediate dispatch of appeal order either by registered post or through a notice server without waiting for the appellant to file an application in this regard. Delay in uploading of appeal orders on ITBA or violation of the instructions regarding dispatch of appeal orders gives rise to suspicions about backdating of orders and/ or malafide intent on the part of officer/ officials concerned.

3. Even as the orders are dispatched by the office staff working in the office of CIT (Appeals), it is the responsibility of the CIT (Appeals) to ensure that the CBDT instructions are followed by his office staff in letter and spirit. Violation of CBDT instructions by office staff reflects adversely on the supervisory capabilities of the Officer for not being able to control/ motivate a handful of staff to follow CBDT instructions. Such supervisory failure is also violative of Rule 3(2)(i) of the CCS (Conduct) Rules, 1964.

4. Many technical and legal lapses have also been noticed during vigilance inspections of CIT (Appeals). For instance in some cases the Assessing Officers made additions towards unsecured loans and/ or share application money after detailed inquiries and bringing clear facts on record that either the creditor was not traceable or had no or meagre source of income or could not produce bank account details or could not explain the source of deposits just before advancing loan. The CsIT (Appeals) gave relief primarily on legal grounds without considering the facts on record and without making any further inquiry in the matter. In one case, the CIT (Appeals) accepted the explanation that cash deposits in bank account which were added by the Assessing Officer as unexplained, represented the business receipts of the assessee, despite the fact that no books of accounts were maintained by the assessee for this business activity. In some other cases, the additions were deleted in a summary manner solely on the ground that opportunity of cross examination was not given to the assessee. The CIT (Appeals) could have given the opportunity of cross examination to the assessee rather than summarily deleting the additions in such cases since it has been held by Hon’ble Apex Court in a number of cases that the scope of power of CIT (Appeals) is coterminous with that of the Assessing Officer.

5. In one case it was found during vigilance inspection that the CIT (Appeals) had not been passing the appellate orders but was showing disposal in statistical statements on a regular basis. This was not noticed by the Chief Commissioner of Income Tax who was supposed to inspect the work done by the CIT (Appeals). Such a situation would not have arisen if the Chief Commissioner of Income Tax concerned had conducted inspection of the CIT (Appeals) as mandated by CBDT Instruction No. 16/2008 dated 04.11.2008.

6. In view of discussion in the preceding paragraphs, it is once again reiterated that the CIT (Appeals) should abide by the instructions of CBDT regarding timely issue and dispatch of appellate orders in letter and spirit. It is also important to note that the Apex Court has held that CIT (Appeals) has plenary powers in disposing of an appeal. These powers must be used by CIT (Appeals) judiciously while passing appellate orders.

7. The Chief Commissioners of Income Tax should keep in mind that in the matters of corruption, unless otherwise evidenced, the vicarious liability of a supervisory officer can become absolute, if the supervisor who has the right, ability or duty to control the activities of a subordinate does not take steps to prevent the acts of misdemeanor by the subordinate. Failure of the Chief Commissioners of Income Tax to conduct regular inspections of the CIT (Appeals) working under them or failure to keep a watch on the quality and quantity of orders would be viewed adversely by the CBDT.

8. This issues with the approval of Chairman, CBDT.

(Rakesh Gupta)

ADG (V) HQ–I, CBDT

New Delhi


8 comments on “CBDT Talks Tough! Warns CsIT(A) And CCsIT Against Back-Dating Orders, Malafide Intent And Corruption
  1. Deepak Soni says:

    First of all CBDT OFFICIALS should make themselves law abiding. They are full of corruption and interested in causing maximum harassment and problems to the taxpayers.

  2. gopal gargieya says:

    sir things remain on records no use full purpose will be in fact comes on surface as no revenue officer never bothered to take CBDT circular instruction guide lines .What are the measures taken to ensure in Aaykar Bhawan and others IT Offices to ensure that the staff comes before 11 am even some visiting office about 12.pm not disposal of 154 etc

    • Deepak Soni says:

      CBDT is a barking dog as far as the officers of the Income tax department are concerned . The Income tax Department employees don’t care for the barking. However CBDT OFFICIALS are blood hound for the honest tax payers. CBDT OFFICIALS will simply bite them for technical reasons

  3. kalpesh says:

    Para 4 of the circular is beyond jurisdiction. The cannot take away right of the assessee. Even they cannot intervene the judicial functioning. Technical grounds are also very important for assessee and CIT(A) cannot deny to take up such grounds.

    • Waghela b.s. says:

      Mr.Kalpesh, your comments are without jurisdiction. Perhaps you have not worked in IT Department. Powers of the CIT(A) are co-extensive with that of the AO. He has got powers of enhancement; which are rarely used.. He is duty bound to correct the mistakes of the AO. What is happening is that the CIT(A)s are extracting money by finding faults of the AO. If any CIT(A) does not follow CBDT Instructions he should be removed under FR 56(j). Some years ago, one AAC had used the language of Kalpesh against the advice of the then CIT and he was immediately divested of his functions and made Range IAC under the same CIT. So do not under-estimate powers of the CBDT.

  4. CA D.K.Motiwala says:

    There r several laks of cases where wrong demand was reported to CPC and despite court intervention and known facts no action was taken by ITD to rectify wrong demands raported to their Online portal rather notice u/s 245 has been issued to assessee and matters were kept pending for several years . No one interested to resolve the issue .

  5. Parth says:

    Such warnings have proved ineffective so far as is clear from the very wordings of this directive which accepts that
    “it is once again reiterated that the CIT (Appeals) should abide by the instructions of CBDT regarding timely issue and dispatch of appellate orders in letter and spirit.”

  6. Rajeev Kumar says:

    Such circulars are mere eyewash. Corruption in Income Tax Department has surpassed all limits during Modi Govt.All Ministers are most incompetent and are ardent followers of Modi. Only big talk,loafing around,doing no official work is the moto of this Govt.Please consider:
    1. What are the measures taken to ensure in Aaykar Bhawan and others IT Offices to ensure that the staff comes before 11 am?
    2.Govt. publishes data of tax arrears that are pending;but what about the assets seize during the raids? Who keeps accounts of them,value of such assets year wise.Most of these assets are misappropriated by IT Officers.
    3. Amounts of refunds due but not paid.It is almost open
    secret that refunds cannot be paid unless bribes are paid. What penalties have been imposed on the errant CITs,CCITs for such rampant all pervasive corrupt practices in the Deptt.

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