CBDT Irked (Again) At Poor Show By Dept Before AAR & Issues Guidelines For Strict Compliance

On an earlier occasion, the CBDT had issued Instruction in F. No. 500/98/2015-FT&TR-V dated 14th August, 2015 in which it had lamented the fact of poor representation on behalf of the department in the cases before the Authority of Advance Rulings. It had issued instructions that only senior officials who are well prepared on facts and law should be deputed so as to effectively represent the Departmental view on complex issues. The CBDT has now issued another Instruction F.No.225/261/2015/ITA.II dated 28.10.2015 in which it has taken exception to the fact that:

(i) Departmental Representatives are seeking adjournment on unjustified grounds;

(ii) Departmental Representatives not committing to a particular position on the ground of seeking further instructions from the field authorities;

(iii) All the questions raised in an application not properly responded to, while furnishing the report.

In order to deal with the malaise, the CBDT has issued clear-cut directions and warned that the said directions should be followed strictly.

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

North Block, New Delhi, the 28th of October, 2015


Subject: Representation of cases before Authority for Advance Ruling-reg.-


As per provisions of sub-section (6) of section 245R of the Income-tax Act, 1961 [‘Act’], the Authority for Advance Ruling (AAR) [hereinafter referred to as ‘Authority’] is required to pronounce its advance ruling, on an application made by an applicant desirous of obtaining such ruling, within six months from the date of its receipt. However, it has been brought to the notice of the Board that the Authority is finding it difficult to adhere to the prescribed time-frame in pronouncing the advance ruling, partly due to reasons largely attributed to the following –

• Departmental Representatives seeking adjournment on unjustified grounds;

• Departmental Representatives not committing to a particular position on the ground of seeking further instructions from the field authorities

• All the questions raised in an application not properly responded to, while furnishing the report.

2. The matter has been considered by the Board. Attention is invited to the Rule 13 of the AAR
(Procedure) Rules, 1996 which provides that:

On receipt of an application, the AAR shall notify the applicant and the Commissioner of the date and place of hearing the application and forward a copy of the application to the Commissioner calling upon him to furnish the relevant records of the case along with his comments. if any, on the contents of the application and nominate his authorized representative if he desires to be heard“.

3. Although Instruction in F. No. 500/98/2015-FT&TR-V dated 14th August, 2015 has already been issued by the Board highlighting the necessity for improving the quality of representation before the Authority and sending of reports/paper books in time, following further instructions are being issued in order to streamline the process of Departmental representation before the Authority:

(i) It would be desirable that the reports of the jurisdictional authorities are invariably furnished within the time mentioned in para 3 of Board’s aforesaid Instruction. The report must be complete in all respects, giving a clear finding/submission on the issue(s) raised in the application. The report of the field authorities, duly approved by the Pro CIT/CIT, should be self-contained and necessary supporting documents must be made a part of it.

(ii) Any instance of non co-operation on the part of the applicant in providing the information required for preparing the report by the field authorities or any other constraint being faced in framing the same, should invariably be brought to the notice of the Authority. However, even in such instances, the jurisdictional authorities must submit an interim report within the stipulated time-frame.

(iii) The officer from the field, who would be representing the case before the AAR (i.e. JCIT/Addl. CIT/Pr. CIT/CIT) should be identified at the stage of receipt of the application itself and his name must be informed to the Authority/CIT(DR) immediately to ensure proper coordination between the two. If the case is to be argued by the CIT(DR), AAR, the jurisdictional Pro CIT/CITwould be required to inform the CIT(DR), AAR about the name of the Officer preparing the report on Departmental response. The officer concerned must co-ordinate with CIT(DR), AAR to brief him about the facts the case. In important cases, it would also be desirable that the officer concerned remains present in the Court when the case is being heard by the Authority. Any instance of lack of co-operation from the field authorities should be brought to the notice of Pr.CCIT(lnt. tax)/CCIT(lnt. tax) concerned by the CIT(DR) for further necessary action.

(iv) It is also stressed that any adjournment should be taken only in unavoidable circumstances and the Authority must be informed about the same in advance. It should be ensured that the paper book is also submitted in advance (as per the time-frame prescribed in Board’s Instruction in F. No. 500/98/2015-FT&TR-V dated 14th August, 2015) and not on the date of hearing. The Pr.CCIT concerned should personally monitor the compliance in this regard.

4. The above directions of the Board may kindly be brought to the notice of Officers working under your charge for strict compliance.

Yours faithfully

(Ankita Pandey)

21 comments on “CBDT Irked (Again) At Poor Show By Dept Before AAR & Issues Guidelines For Strict Compliance
  1. Varaprasad Daitha says:

    Dr. Balakrishnan ji. In the case of my boss (range head) in whose CR which was also written with similar remarks and he had rebutted with the recorded proof of bills etc. and the CBDT had simply dropped the adverse remarks in his case because he happened to be his group cadre. I too have recorded proof i.e. hotel bills which were paid by me on behalf of the CIT, and from whom I asked reimbursement he got annoyed and reversed the reporting officer’s remarks. But when I also rebutted in writing with other proofs the matter was kept pending till my retirement but my promotions were not stopped.

    I thank Mr. B.S.Waghela, whom I hope worked in the I T Department for understanding my versions. Any it was a past.

  2. B.S.Waghela says:

    Version of Varaprasad cannot be doubted ; such things are going on in the department so years together. I know this from my personal experience. There cannot be recorded conversation as far as CRs are concerned. Even for expunging Adverse CR Entries money is demanded. Perhaps Dr. Balakrishnan has not worked in the IT Department.

  3. B.S.Waghela says:

    Good people are not interested to be appointed as Standing Counsels for the IT Department. Before some decades I approached a Standing Counsel with the Hearing Notice by the Court. He refused to appear before the Court for the reasons that the Department had not paid his Fees for more than 10 years. On my repeated requests he sought Adjournment.

    • the counsel need to file a writ petition for damages against the department, might be he might be removed out of panel possibly, but such kind of action by department would reflect badly on the department.

      in such cases CBDT must take action concerned CITs relevant for failure to pay the counsel.

      counsel could not fall into lying low.

      Vanaprasad alleging the counsel lied to court means the counsel failed in his obligations to court as a
      court officer.

      Empanelment does not mean the counsel is an employee of the department.

      He could say a spade a spade even to the so called commissioner of income tax or any authority as it is clear under advocates Act he has to act legally only not otherwise for any client.

  4. Varaprasad Daitha says:

    Mr. Sudhir Chintawar, I am one of the witnesses to such an irresponsible attitude of a Sr. Standing Counsel of IT Department. Without referring to earlier papers with which he was in possession for a period of about 13 years he simply lied before High Court that the department had given instructions in a particular manner which the department never gave. In fact he was supplied with all material in writing, verified by the superiors and handed over to him. When inquired into the fact who gave such incorrect instructions, he coolly thrown the blame on the assessing officer. That poor chap has to answer his ignorance.

  5. Varaprasad Daitha says:

    Mr. bobjee Kurien, the CBDT never reviews any pending action at its level. It happened for me to obtain some information about the reviews made by CBDT in certain cases under RTI Act. It was replied that periodical reviews were done. When I further asked for the details and outcome of such reviews, I was provided with copies of the note files which contain any information as to such reviews. That means the CBDT ventures to utter lies in writing. WHAT A PITY?

    • Varaprasad Daitha says:

      In my earlier post I stated the following:

      “When I further asked for the details and outcome of such reviews, I was provided with copies of the note files which * contain any information as to such reviews.”

      A mistake occurred as to the fact that the words “do not” are missing at the * quoted above.

      Please read the sentence as “When I further asked for details of outcome of such reviews, I was provided with the copies of note files which do not contain any information as to such reviews”.

      I feel sorry for the mistake.

  6. Varaprasad Daitha says:

    The CBDT had received a grievance petition from a group of assessees as long back as 2003 and 2005. The field formations sent the reports on grievance petitions. Till now the CBDT appeared to have not received the reports. Who is to be held responsible? Is it not the duty of the CBDT to follow up reports not received?

  7. Varaprasad Daitha says:

    Mr. B.S.Waghela is right. In my own case the CIT whom Mr. Bobjee Kurien refferred, reviewed my CR written my boss had converted all 12 columns of the reporting officer into inadequate. This is for a period of 8 months when I worked in his charge. Earlier CIT for 4 months had given an outstanding report. On serving a memorandum I replied aptly and it was never decided till I retire. In between I got promotion also. How is it possible for a person to give inadequate performance in all selected fields of 12 is for anyone’s guess. It was because I did not fund for his flat renovation.

    • vanaprasadji – you could move against the officer if you have right recordings of conversations you had with that relevant officer.

      Else simply alleging may not serve any useful purpose, one should bring such officers to justice sir/

  8. bobjee Kurien says:

    The disgruntled senior ARs who were posted to ITAT would just say( if the case is that of the assessee )I rely on the CIT(A) order and sit down . If it is the departmental appeal would just say I rely on the AO.Thats it .And in no time they would get transferred (which is their objective) and get lucrative postings.Mr Wagela is right. What he has seen in Nagpur is same every where through out India especially officers from the elite cadre.They are aware they are the anointed ones.Yuvaraj The board if they interested can call for the records and see for themselves.Then there is a classic case of a CIT who passed 200 orders under section 263 of the IT act.All the orders were struck down by the ITAT in some cases with strictures and he retired as CCIT . Even strictures passed on the said CIT by the High court(an inept officer)the board turned a blind eye for reasons best known to them!!!! What does the board do I wonder just draft a few instructions which were drafted eons back and recycle them with an added foot note “”The above directions of the Board may kindly be brought to the notice of Officers working under your charge for strict compliance. “” Ha Ha

    • bobjee Kurien says:

      When will they start using the whip?They cannot for their hands are soiled too

      • bobjee Kurien says:

        I wish the CBDT issues directions to the lower formations about reports due to the Board .Does it take 8 years for a field report to be submitted to the Board or the Board takes a decision after a three years from the date of receipt of the final report from the field.All officials are equally responsible for delay including board members.No wonder the board finds it difficult to initiate action on the lower officials

  9. Sudhir Chintawar says:

    Recently I came across the news about the misrepresentation before High Courts by the counsels appointed by the I.T.Department. Actually, Bombay High Court has ordered to pay the costs by the Deptt. The appointment of counsels is also a field where merit is not the only criteria. The appointments are made in a casual manner. The persons so appointed are on the basis of simple recommendations without verifying the credentials. Now at least the Deptt should identify such errant and take corrective measures

  10. I.S.Verma says:

    Hon’ble CBDT, there is no use of issuing such directions, time and again, because of disinterest, callus attitude and incompetency of the Higher authorities is such posting. Why don’t you engage some of the out standing Advocates & former members of Income Tax Appellate Tribunal as advisers.

    • B.S.Waghela says:

      Generally unwanted officers, persons carrying Adverse ACRs remarks , persons not in good terms with Chief Commissioners/CITs are being posted as DRs in ITATs, AAR, Settlement Commissions etc. How do you expect such persons to work there efficiently and honestly ? I know one CIT who was demanding money from Officers who were not willing to be posted at ITAT..I can quote number of cases. There was one Sr.DR posted at ITAT, Nagpur. He rarely attended ITAT and passed on the work to Jr.DRs. Juniors made complaints against him in writing, but nothing happened. I know two CITs who worked as DRs before the ITATs for more than 15 years and were willing to continue as DRs for ever. But from Bombay they were transferred as regular CITs – one at Nagpur and another at Nashik. I worked under both these CITs and they were well versed with Incometax Law. I also know one Jr.DR at ITAT Pune. He was there for more than 15 years. He was known for his sharp intellect; and departmental persons used to approach him for Legal Advise. When he was transferred to Field Office he made representation for cancellation of his transfer. But wise men in the Department did not accept his request. Ultimately he resigned and started practice. He had a roaring practice & success. In short postings as DRs with ITAT, SC, AAR are not based on merit. These are old stories (say 20/25 years old) and now I hope under Modi Govt. and the present Board Members things may change for the better.

  11. Nem Singh says:

    The main reason is that all they want all things in their on chambers only without any efforts. The second one CBDT not deputed the proper person to represent the case before the courts who are well versed. The only rely of the AO,s comments only which are in most of the cases baseless.

  12. Ashwani Joshi says:

    The department admittedly has inefficient ground officers who don’t deliver good and standard and judicious orders , with the result the assesses and lawyers suffers. So is the when such insincere, dishonest and inefficient officers appear before superior courts. A frivolous appeal is wastage of time and money of assessees, lawyers and the department.
    By issuing these instructions CBDT impliedly admits the maladministration.

  13. Varaprasad Daitha says:

    It can be seen from the circular that there are clear cut stipulations in the rules itself about what to do; it was found that the quality of representation was not satisfactory; the field formations and their controlling authorities have not been following the Board’s circulars; normal adjournments should not be sought; Paper books should be prepared well in advance.

    Why the CBDT had been considerate who flout the prescribed rules; flouted earlier instructions etc. Why did it not initiate some disciplinary actions against flouting officers? It all appears that the CBDT is issuing and reissuing circulars and instructions only for record purposes and not for implementing.

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