Distinguished professional bodies like AIFTP, IMC, CTC etc made detailed representations to the CBDT in which it was pointed out that the move by the CBDT to give “incentives” to CsIT(A) to enhance assessments and levy penalty shakes the confidence of taxpayers that they would get a fair hearing from the CsIT(A) of their grievances.
It was also pointed out that the move interferes with the judicial discretion of the CsIT(A) and falls foul of the law laid down by the Hon’ble Supreme Court in Sirpur Paper Mill Ltd. vs. CWT [(1970) 77 ITR 6 (SC)] and other judgements.
However, these representations have fallen on deaf ears. The CBDT appears to be in no mood to listen, let alone reconsider its decision.
Accordingly, the AIFTP has filed a Writ Petition in the Hon’ble Delhi High Court to challenge the said move of the CBDT.
The Petition contends that such “incentive” will encourage the CsIT(A) to pass orders in a “biased and prejudicial manner” in favour of the revenue and against taxpayers.
This will result in incorrect determination of tax liability of an assessee and violate Article 265 of the Constitution of India which provides for collection of tax as per law.
It is also contended that different CsIT(A) are likely to act in a different manner and accordingly the instructions violate Articles 14 and 21 of the Constitution.
The Petition has stated that it is well settled that an appellate authority should pass an order in an impartial manner and no administrative supervisory authority should interfere in the judicial functioning of an authority.
Attention has also been drawn to section 119(1) of the Income Tax Act 1961 which expressly states that the CBDT shall not issue any order or instruction or direction which interferes with the discretion of the Commissioner (Appeals) in the exercise of his or her appellate functions.
The Petition has also relied on several judgements wherein the independence of the CsIT(A) has been held to be a non-negotiable issue.
The Petition is likely to come up for hearing before the Hon’ble Delhi High Court shortly.