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The author, an eminent senior advocate, expresses gratitude at the proactive role played by Courts in seeking to redress the inefficiencies of the department. However, while the strictures do shake the department out of its’ reverie for some time, the effect does not last long. The author suggests that a monitoring mechanism should be set up and the top brass of the department hauled up for non-compliance of the directives. The author has also identified the problem areas and suggested simple and cost-effective solutions to prevent the department from being on the wrong side of the law<\/strong>\n<\/p>\n As on 15-2-2014, the pendency of appeals and references before the Bombay High Court was more than 9,700, which includes 1,850 old references, 4,700 appeals admitted and pending for final hearing and 3,150 pending for admission. The Income-tax Appellate Tribunal Bar Association has made a representation to the Hon\u2019ble Chief Justice of the Bombay High Court to constitute at least two tax Benches. We wish to express our gratitude to the Hon\u2019ble Chief Justice for being kind enough to accept the request and constituted three tax Benches.<\/p>\n <\/p>\n It is however very unfortunate that when the old matters were kept for final hearing on 4th March, 2014, counsels (for the assessee and for the Department) were not ready and the matters were required to be adjourned. The Hon\u2019ble judges have passed an order in the case of Thermax Babcoock & Wilcox Ltd. v. CIT<\/a><\/strong> (Bom.)(HC) www.itatonline.org observing as follows:<\/p>\n \u201cWe have noted that the final hearing Board consists of all appeals of 2002. First two matters have been adjourned by us only because the department or advocate for the appellant sought accommodation. They did not either havepapers or were not ready with the case. Such state of affairs will not be tolerated hereafter. In the event, the counsel engaged by the department is absent without a justifiable or reasonable cause we will invariably impose costs and to be paid by the counsel personally. Equally, we would proceed in his absence. In the event, the appellant or his advocate is absent, we will proceed to dismiss the appeal for non-prosecution. Thereafter, no application for restoration of the appeal will be considered unless the appellant makes out sufficient cause for absence.\u201d<\/p><\/blockquote>\n In earlier also number of occasions the departmental references were sent back un answered as the department has not properly prosecuted. E.g. in CIT v. S. M. Mehata<\/strong> (1988) 170 ITR 582 (Bom.)(HC), the Bombay High Court declined to answer the reference as the Commissioner failed to give requisite information. In CIT v. Union Manufacturing Co. Ltd<\/strong>. ITR No. 376 of 1979 dt. 17th June 1993, the court returned reference unanswered stating that despite long lapse of 14 Years the respondents have not been served. Similar orders were passed in CIT v. Shri D. M. Shinre (HUF)<\/strong> ITR No. 280 of 1979 dt. 6th July, 1993, CIT v. Patel Brothers<\/strong> ITR No. 497 of 1979 dt. 5th July, 1993, CIT v. Estate of Shri P. A. Advani (Decd.)<\/strong> ITR No. 499 of 1979 dt. 17th June, 1993. <\/p>\n In CIT v. American Bureau of Shipping<\/strong> ITA No. 346 of 1988 dt. 25-7-2005, the Bombay High Court dismissed the department\u2019s reference application as the department had not served the paper book to the respondent even after 17 years of filing of reference. (AIFTP Journal \u2013August-2005 P. 10) Number of matters referred to Bombay High Court under section 256(2) has been dismissed as the department has taken any initiate to comply the procedural requirements. Who is accountable? <\/p>\n In early days, with one advocate on record and many lawyers on the panel of the tax department, there was better coordination and efficiency in handling litigation issues. However, under the present system, each Commissioner of Income-tax has a different lawyer and vakalatnama is being filed by different lawyers. It has also been observed that the concerned lawyers may not even be on the panel when the matter comes up for final hearing after many years which results in avoidable delay in disposing off the cases. Every such adjournment results in precious time of the Court being lost and tax payers\u2019 money wasted on unproductive purposes.<\/p>\n We are of the opinion that this situation can be improved if the entire work of filing of vakalatnama is outsourced to a law firm. If the tax administration in Mumbai does not take any remedial measures soon,they may lose good matters due to inadvertent procedural lapses. Also, the fees for filing vakalatnama and appearing on behalf of the Department deserves to be increased. The Department accounts for more than 60% of all the tax appeals filed in the Bombay High Court.<\/p>\n We have made representations from time and again to the Government to constitute a tax litigation management cell for the Department to monitor cases before various courts. If the above suggestions are implemented, it may further enhance the quality of representation of tax matters on behalf of the Department. It is also worth appreciating that quality of representation before the Tribunal is are of much more organised. <\/p>\n
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