CIT vs. Proctor and Gamble Home Products Ltd (Bombay High Court)

DATE: January 19, 2015 (Date of pronouncement)
DATE: October 12, 2015 (Date of publication)
AY: -
FILE: Click here to download the file in pdf format
For filing frivolous appeals and harassing taxpayers, heavy/exemplary costs to be imposed which will have to be personally paid by the jurisdictional CIT who sanctioned filing of the appeal

(i) It needs to be pointed out that we have noticed that the Revenue has been preferring appeals from the orders of the Tribunal even where the issue stands concluded by the orders of this High Court. These appeals are filed by the Revenue in a very causal manner without indicating the basis of the challenge i.e. some distinction in facts from the order of the High Court or that the order of the jurisdictional High Court is a subject matter of challenge before the Apex Court. In the absence of the above explanation, it follows that there are times when even though the decision of the jurisdictional High Court has been accepted by the Revenue and yet the Revenue chooses to file an appeal on the same issue before this Court. Rule of law implies certainty of law and the State filing appeals on settled issues arbitrarily and/or without any application of mind. This filing of appeal without due application of mind leads to attempting to unsettle settled position without reasons. This casual manner of filing appeals subjects an assessee to unnecessary expenditure and at times anxiety. Even the Revenue incurs substantial expenses in pursuing unwarranted cases, which are a sheer waste of public money. The least that the Revenue should do is to examine whether or not the decision of the jurisdictional High Court being relied upon by the Tribunal, is subject matter of challenge before the Apex Court or is otherwise distinguishable and the same must be indicated in the appeal memo.

(ii) In the above view, we were contemplating to impose costs on the Revenue. However, we noticed that on earlier occasion when costs were imposed on the Revenue, it seemed to matter little to the Officers, for after all the amount came out of the general pool of tax paid by the tax payers. In the circumstances, we are now putting the Officers of the Revenue to notice, that in all cases including where appeals are filed, the Offices instructing the Counsel would review whether the appeal should at all be pressed in view of the Revenue having accepted the jurisdictional High Court’s order on an identical issue and take necessary instructions from the Commissioner of Income Tax to withdraw and/or not press the appeal. Alternatively, in case a conscious decision is taken to press the appeal, then an averment to the effect that either the case is distinguishable or an appeal has been preferred from the decision of this Court to the Apex Court if not averred in the appeal memo, then a further affidavit in support be filed indicating the reasons. In the absence of the above, we will be compelled to impose heavy/exemplary costs to be personally personally paid by the jurisdictional – Commissioner of Income Tax under whose jurisdiction, the appeal is being filed and pressed in spite of the issue being settled by this Court and the same having been accepted by the Revenue.

21 comments on “CIT vs. Proctor and Gamble Home Products Ltd (Bombay High Court)
  1. omprakash says:

    CIT vs. Proctor and Gamble Home Products Ltd (Bombay High Court) whether applicable to frivolous order u/s 263 of the Act

    • Rajesh bhardwaj says:

      Sir, in my humble view, the ratio of the judgment of Hon. HC In Proctor and Gamble will apply to frivolous orders u/s 263 or any other section of Income tax or wealth tax act. However, ITAT/ Hon. Courts will have to be very careful , fair and just, while terming an action/ order of departmental authority as ” frivolous” as it can have serious consequences on the career of the concerned officer.

  2. Dipakkumar J Shah says:

    A Very Good and courageous Judgment. Now the question arises about Judiciary in High Court . I have experienced the many cases in Last 22 years. Where Natural Justice is not given . On apparent on record something fishy work of Justices is there on record. No body looks after it !!! There should be a provision in Law also. At the same time What is written in the petition is not looked after and something else is written in the Judgment!!! Even on record nothing is seen !!! And dismissed!!!! No look up in what is written and what is the Case for !!!! Just Dismissed!!!!
    As said Appeal , appeal and appeal till you die!!
    God save us.

  3. bobjee kurien says:

    A strange case .A CIT, well within his powers, on an application filed by the assessee waives interest u/s 32 (1) of the wealth tax act in 1997.Based on this order the Assessing officer passes a modification order in the year 2000. Another CIT in the year 2006 passes an order U/s25 cancelling the modification order .I wonder where on earth does the wealth tax act provide for such an action!!!!A clear indication of the height of a high handed action by the CIT.May God save our country.

    In the light of the High court decision will such action not attract any reaction by the CBDT? No. They do nót take any action for he is a part of their own brethren.The King can do no wrong!!!!.

    This decision of the High Court is indeed welcome

    • Dipakkumar J Shah says:

      The same is with High Court Justices of Hon. High Court of Gujarat!!!! Their Lordships can do no wrong!!!???

  4. Varaprasad Daitha says:

    In the case of a Writ Petition before High Court, the specially authorized CIT by the same High Court had willfully filed incorrect figures of demands as outstanding. This was in spite of the fact of recovery and adjustment by the same department under the direct control of the CIT and a Member of the Board. By virtue of incorrect affidavit before High Court by this specially designated CIT, the HC allowed to appropriate certain moneys in deposit with bank under lien to the department. This order was passed as long back as December 2006. Neither the department had adjusted nor refunded the amounts nor released the lien amounted deposits.
    The poor assessees approached the CBDT as long back as 2006 and it had not been settled till date.

    Based on the incorrect affidavits in the Writ Petition by the CIT, three of the officers were charge sheeted and their fate is still in under suspended animation.

    A complaint had been lodged against such erring CIT and it had not been acted upon by the CBDT. Where to go for redress for the assessees and the charge sheeted officers?

  5. Dipakkumar J Shah says:

    This reminds me a case of my family Revision Application to C I T . The Then C I T Mr N O Parekh. He was aware of the fact of a case which was pending Before High Court of Gujarat , for payment of Interest on Advance Tax paid Before end of Financial year. It was appreciated by Hon. C I T correctly. He told me to wait for some one month or so. Then he passed the order granting Interest on payment of Advance tax paid Before Financial Year.

  6. LAKSHMANA B.R says:

    Dear All,

    It is a good observation by the tribunal, this is a country where we like disputes, disputes fund coffers of dispute lawers and allow spending tax payer’s money. In the context of this judgement we should look all our Tribunals, Courts are they working efficiently.

    Lakshmana B.R
    Chief Financial Officer – Komet India

  7. bobjee kurien says:


    • RANGA RAO K says:

      Very bad comment. Think as if you are the Commissioner.

      • bobjee kurien says:

        The issue at hand is with regard to filing of frivolous appeals and the court has stated that appeals are being preferred on decided issues on which no further appeals has been preferred by the department before the higher courts.In such cases the high court will be compelled to impose heavy/exemplary costs to be personally paid by the jurisdictional – Commissioner of Income Tax under whose jurisdiction, the appeal is being filed and pressed in spite of the issue being settled by the jurisdictional Court.This action will definitely instill the fear of God .In such cases Commissioners who are habituated to file appeals where there is no point of law involved , now will think twice before they think of filing an appeal. People who do not have conviction of action is always scared of disciplinary proceedings . The position of the Commissioner is fairly high in the departmental hierarchy and he has to apply his mind well before he authorises an appeal If he does not he has to face the flak.The comment is based on facts which are on hand.

      • bobjee kurien says:

        ‘Think as if you are the Commissioner’.Perhaps he means to say put your self(me) in the position of the Commissioner .Initially I did not follow what he had in mind till read I the earlier understand the full impact of the one liner ..If appeal is not filed CCIT/CBDT who nurtures some personal vendetta finds this a convinient(convenient) tool to initiate DP against the CIT and harass him……. Also, nowadays another demoscles(damocles) sword in the form of AG audit is also hanging on the Officers of the Dept.When an officer does the work according to the rule book why should the AG audit and the CVC be a barrier to his decision making process.In my entire carrier there was just one audit objection and i did not agree with many of the earlier actions of my predecessor.I always welcomed the Audit and also the inspection of my work by a superior authority.Mistakes are bound to happen but as long as it is a genuine mistake there can be no disciplinary proceedings initiated .Please read Prasad’s regarding CVC.

  8. Sekhar says:

    The more immediate amendments to Tax laws that need to be carried out through the annual budget exercises, may not relate to incentives etc,but bringing accountability to the officers and the administration .

  9. RANGA RAO K says:

    A very bad judgement. At the filing stage one can’t say what is frivilous and what is not.If appeal is not filed CCIT/CBDT who nurtures some personal vendetta finds this a convinient tool to initiate DP against the CIT and harass him. It is said in telugu that”Shanku lo posthee theertam” i.e. water poured in a shanku is sacred water. Like wise an appeal decided by H.C will absolve the Officers responsibility, otherwise that poor fellow will have to suffer for the rest of his career. Better Courts lay down that quasi-judicial decisions can’t be questioned in Disciplinary Proceedings. This will give much needed courage and freedom to field oficers to act in a balanced manner, otherwise the demoscle’s sword of D.P always hangs on his head while looking into files to decide the matters. Also, nowadays another demoscles sword in the form of AG audit is also hanging on the Officers of the Dept.

    • Varaprasad Daitha says:

      I am unable to find justification in the comments of Sri. K. Rangarao. He says on one hand “personal vendetta” of CCIT / CBDT and is expressing his apprehensions of Disciplinary Proceedings. Does he mean that the persons who man the posts of CCIT / CBDT will have personal vendetta. His apprehensions are unfounded. I advise him to read the vigilance manual available on the web site of CVC. There are many saving and protecting mechanisms. Of course I am one of the victims of “personal vendetta” but I have courage to face it. The Constitution is providing protection to all who perform duties in fair and free manner. To cite and quote the Disciplinary Proceedings by some bad elements in the bureaucracy need not be a cause for filing frivolous appeals. The Tribunals, High Courts and even Supreme Court have been passing strictures on such frivolous appeals. He also stated that one can’t say what was frivolous is not fair statement. He also stated that if no appeals were filed DPs are initiated. DPs will not be initiated if a proper appraisal report was sent and still the CCIT / CBDT authorise filing of such frivolous appeals, the responsibility is cast upon the authority who authorised the appeal. That is what is stated in the Supreme Court judgment.

    • bobjee kurien says:

      I do not know whether Ranga Rao is a practising chartered accountant or a lay man.He can be pulled up for contempt of court ‘”A very bad judgement” a comment that will not go down well with the High Court .It is clear from what has been stated he is a novice ” Better Courts lay down that quasi-judicial decisions can’t be questioned in Disciplinary Proceedings”Another hollow statement. The hollowness of his arguments show how shallow his knowledge of law is and in the appreciation of facts.A person who knows his job is not scared of any disciplinary proceeding.He who is not, is scared of the consequences.If he is a novice blessed is he who is ignorant.

    • Dipakkumar J Shah says:

      I think and also believe that if there is all ready Judgments on the same Subjects and the same is ventilated again in High Court , then definitely some thing is there in the case. How the matter has been decided ……..

  10. Varaprasad Daitha says:

    One more point the High Courts are not meant to make water poured in a shanku is sacred.

  11. Varaprasad Daitha says:

    If one goes through the above judgments it would be crystal clear that the issues were settled cannot be raised again. The CBDT also issued instructions on the category of appeals that were to be filed before ITAT, HC and even Supreme Court.

  12. Dipakkumar J Shah says:

    Correct. Res Judicata.

  13. that kind of firm stand by high court is right stand absolutely against the revenue.

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