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Issue of appellate order within 15 days of last hearing- CBDT reiterates instructions

TIOL-DDT 2624
22 06 2015
Monday

ABOUT twelve years ago in Instruction No. 20/2003, dated 23.12.2003, the CBDT informed all the Chief Commissioners:-

The Board has given serious consideration to the delay in passing/issue of the appellate orders by the Commissioner of Income Tax (Appeals), much after the last day of the hearing/receipt of written submission. This results in hardship to the assessee and hampers in smooth interface with assessee.

2. The Board desires that appellate orders by Commissioner of Income Tax (Appeals) should be issued within 15 days of the last hearing. Any lapse on this account shall be viewed adversely.

3. This shall also be applicable to orders passed by the CIT (Administration)/CCIT as regards matters within their purview under varied Sections of Income Tax Act such as Sections 80G, 264, 263 or Orders under Rule 86 of Second Schedule and under other allied direct taxes.

4. Strict compliance is desired by the Board.

CBDT has lately noticed that the above instructions are not being followed and wants strict compliance by all the officers concerned.

Will CBEC also issue such instructions to the Adjudicating Commissioners and Appellate Commissioners?

CBDT Letter in F. No. 279/Misc 53/2003-ITJ., Dated: June 19, 2015

Commissioner (Appeals): The office needs to be institutionalised

EXCERPTS from a couple of previous DDTs.

DDT 21 30 12 2004:

THERE is unfortunately a lot of stigma attached to the post of Commissioner (Appeals). Who gets appointed as Commissioners (Appeals)? Normally one with no pulls or one who is not wanted around for often suspect reasons. Several posts of Commissioner (Appeals) are lying vacant. Why? Simply there are no takers. This is one post where you are required to work - at least sign a couple of orders a day, but has no perks attached, comparable to a territorial Commissioner. A Commissionerate can certainly run or even run better without a Commissioner but the appellate unit cannot function without a Commissioner (Appeals).

One of the reasons put forth by the Customs and Central Excise Department for creating a large number of posts of Commissioners (Appeals) was that these Commissioners would clear the pending cases and the state coffers would be overflowing with the payments made by the litigants. The good Government accepted this preposterous plea and agreed to promote a large number of officers.

But the promised queue outside banks by the relieved appellants eager to make payments consequent to appellate orders remained a mirage. Why? One reason could be there were not many appellate orders! Why? There are no Commissioners (Appeals). Why? Commissioners (Appeals) do not have half the glamour of a jurisdictional Commissioner with his retinue of staff and vehicles. The Commissioner (Appeals) is always dependent on the jurisdictional Commissioner for everything ranging from paper to protocol and no protocol officer worth his smart uniform will waste his talents on a Commissioner (Appeals); with the result there are not many takers for these posts and several of the newly created posts are lying vacant.

This first appellate authority of the department is so neglected and disrespected that many of the Commissioners show scant respect not only to the Commissioners (Appeals) but also to their orders. Unless this office is institutionalised and strengthened, the quality of justice in the department is bound to suffer and retard further.

DDT suggests that:-

1) The Commissioner (Appeals) should be de-linked from the department. Anyway several wings are going out of the Board and this is a good office that can and should go. The Commissioner (Appeals) may be placed under the CESTAT or under a Chief Commissioner (Appeals) with independent funds and functioning. Commissioners (Appeals) are often invited to meetings called for by Chief Commissioners to discuss revenue augmenting. There was a Commissioner who wrote a letter to the Chairman that a part of the credit for his good performance should go to the Commissioner (Appeals) who was consistently refusing to grant stay!

2) The Commissioner(Appeals) should hold court in an open room where advocates, consultants and others should be allowed to be present. The proceedings should be like in the Tribunal.

3) The Commissioner(Appeals) should pass his orders in open court.

4) The defending or appealing departmental officer should invariably be present in hearings before the Commissioner(Appeals) and should present his case.

5) Nobody should be posted as Commissioner(Appeals) against his will. This should be a post on selection by calling for willingness from prospective candidates. To attract good talent there should be strong incentives like better perks, an allowance equal to the salary, preference for selection to Tribunal etc,.

6) Once the Commissioner(Appeals) passes an order, he should have total administrative control over the officer against whose order the appellate order is passed. If the order is not implemented, the Commissioner (Appeals) should have power to punish the lower officer.

7) No person should be posted as Commissioner (Appeals) in a state in which he had worked in the preceding three years.

But the first and foremost step should be to fill up the vacant posts. Instead of arrears clearance drives, which only produce reports and not realisation, the department should drive for an adjudication and appeals clearance drive. To start with for every three hundred pending appeals, post a Commissioner as Commissioner (Appeals). All the Commissioners from the Commissionerates can be withdrawn for this job with an assurance that they will get their Commissionerates back after they finish passing these three hundred appellate orders. May be in six months we can liquidate the entire pendency of appeals. Adjudication is the only work of the officers, for which we can see the results - good or bad. Results of all other work are manipulated and misreported. For one year let us forget everything and concentrate on adjudication and appellate orders - at all levels.

But what will happen to revenue if the officers are busy in adjudication and not concentrating on revenue realisation, survey, reports and audits? The FM need not worry; Revenue will come in automatically and Sir, please be don't be surprised if there is a huge increase in Revenue.

DDT 1201 22 09 2009:-

Why not Financial Powers to Commissioner (Appeals)?

Next to the DRs in CESTAT, the most humiliated cadre in Central Excise and Customs is the Commissioner (Appeals). He sits in a Commissionerate and most often, the jurisdictional Commissioner who is a virtual prince treats the Commissioner (Appeals) as dirt. The poor Commissioner (Appeals) has to depend on the Jurisdictional Commissioner even for that white paper, which is quite often denied to him. Every Commissioner (Appeals) I speak to has volumes of woes against the territorial Commissioner who wields the strings of the purse. A Commissioner (Appeals) tells us that he walks to work - not for health or austerity - because he is not provided with a car and there is no reliable public transport and he can't afford a cab. He has made several representations to his Chief Commissioner, but with no result. A jurisdictional Commissioner, who had gone out of his way to be rude to the Commissioner (Appeals), is now the Commissioner (Appeals) and is at the receiving end - the roles are reversed. Of course the Commissioner (Appeals) has forgotten his old foible and is now angry that the jurisdictional Commissioner who is far junior to him is haughty and denying him basic facilities. Every Commissioner who humiliates a Commissioner (Appeals) should realise that one day he may also end up as a Commissioner (Appeals). Small men occupying big posts?

Be that as it may - the Board/Government should seriously think of revamping the institution of Commissioner (Appeals).

1. First of all the Commissioner (Appeals) should be delinked from the control of the jurisdictional Chief Commissioner. We have so many DGs - let there be one more - A DG (APPEALS)- All Commissioners (Appeals) should be under the DG and not the Chief Commissioner.

2. They should have separate and adequate funds allotted to them so that they are not at the mercy of the local Commissioners for their small needs. When the ADGs in DRIDGCEI, AUDIT, NACEN, Inspection etc, have their independent offices and funds, why should Commissioner (Appeals) be a poor appendage to a Commissioner?

3. Preferably the Commissioner (Appeals) office should not be in the premises of the Commissionerate.

4. The Commissioner (Appeals) should function like a Court and more transparently. Proceedings should be open to public and orders - at least the operative part, should be dictated in the open court.

5. Senior Additional Commissioners should be posted in the CESTAT as DRs and on promotion they should be posted as Commissioners (Appeals). This will make them more judicial minded.

Further steps towards a non-adversarial tax regime - appeal before High Court

ON several occasions the Finance Minister has emphasised the need for furthering a non-adversarial tax regime. A non-adversarial tax regime cannot be achieved without concerted endeavour at each level, especially at levels where the public interaction is high. Though the Central Board of Direct Taxes (CBDT) has issued instructions from time to time on some of these issues, there is a need for consolidation of earlier instructions and issuance of further directions in this regard. Accordingly, CBDT had issued guidelines for achieving such objective through O.M in F.No.279/Misc./52/2014-(ITJ), dated 07.11.2014. [DDT 2471 10.11.2014]

In para x of the above instructions, it was stated:

x. A review of the proposals for filing SLPs reveals that in most of the cases, the decision to file a reference before the High Court itself was not in order. No substantial question of law existed or the question of law was not correctly drafted. Hence, in stations having more than one Chief Commissioner of Income-tax (CCIT) the decision to file a reference before the High Court will be taken by two CCsIT including the CCIT in whose jurisdiction the matter lies. The Principal CCIT/ CCIT (CCA) concerned may issue directions for pairing of CCsIT for this purpose. In case of disagreement between the two CCsIT, the matter will be referred to the Principal CCIT/ CCIT (CCA). For references in the jurisdiction of the Principal CCIT/ CCIT (CCA), in case of disagreement, the matter will be referred to the CCIT-II.

As a further step, the CBDT has now decided that such cases, where decision to "not file" appeal before High Court/s has been proposed/taken by the CCIT concerned, will not be referred to the panel of CCsIT.

In the CBEC, the Commissioner decides whether to appeal or not and most of the Commissioners liberally contribute their mite to clogging the High Courts.

CBDT Letter in F. No. 279/Misc 52/2014-ITJ., Dated: June 17, 2015

No Retrospective Legislation - FM Tells US

SPEAKING at several meetings in the United States, Finance Minister Arun Jaitley told the US investors that government will not tax retrospectively.

He said -

For the future, this is a closed issue. As far as past is concerned, it relates to only some individual companies and the issue is pending before some judicial or dispute redressal mechanism body.

Is the FM aware of the regular, repetitive retrospective anti dumping duty by his CBEC?

Board will clarify on Education Cess Credit, says Service Tax Commissioner

THE PHD Chamber of Commerce and Industry in a Press release said,

Commissioner Service Tax Mr.Gautam Bhattacharya on Friday asked India Inc. to be excessively pro-active in sharing its inputs with the government officials when they are in the middle of preparing the direct and indirect tax proposals rather than commenting on them after such a policy documentation is finalized, for it becomes difficult for them to insert and incorporate valuable industry's inputs later on in such a paper.

Mr. Bhattacharya indicated that clarification sought by industry on application of service taxes including education and secondary education cess, especially after the service tax has been increased to 14% would be addressed suitably by the finance ministry without giving a particular roadmap for it.

Who will pay for the un-utilisable credit?

Five Hurdles to GST

1. ADDITIONAL Tax of 1 per cent on goods in the course of inter-state trade.

2. Revenue-neutral GST rate (27% is exorbitant; should be somewhere around 18%)

3. Tobacco, electricity, petroleum products and alcohol in GST

4. Dispute resolution mechanism

5. 100 per cent compensation for five years to states for revenue loss

WCO Photo Competition 2015 - The Japanese Entry - Strong Will

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Until Tomorrowwith more DDT

Have a nice day.

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	RECENT DISCUSSION(S)		POST YOUR COMMENTS


Sub: Appellate Commissioners have only themselves to blame If the Appellate Commissioners are not respected, whether within the department or by the litigant public, it is because they do not act independently as an appellate authority should do, nor do they pass quality orders. Superiors take for granted anyone who tamely toes the line. Even intelligent and experienced appellate authorities pass perverse orders, sometimes, ignoring even the records of PH. Lately, most of the appellate orders are driven by revenue zeal to somehow uphold the orders of the original authorities. Case laws cited by the assessees are summarily dismissed. Grounds favourable to the assessees are ignored. Even occasional original orders which are in favour of the assessee are reversed. Gone are the days when one could hope to succeed before the first appellate authority at least in a case with strong merits, or where the law is settled in favour of the appellant-assessee. Along with it, the respectability.
Posted by Gururaj B N


Sub: However high you may be, still you remain below CBEC It is amusing to read about the postings, etc. of CBEC. If a posting is considered 'plum' is it due to it giving legal benefits or illegal benefits? Are we not tolerating the misuse of vehicles, funds, discretion, etc. at the disposal of the 'babus'? When a person is longing for enjoying the illegal benefits of a posting can he expect the same to be distributed without bias? When are we going to stop the hypocrisy of ignoring the 'benefits' of a posting but in the same breath shouting for 'fair treatment'. It is not out o f place to mention that in Mumbai Customs for every chargesheet, the Appraising Officer's reply will contain the main defence as 'excess work load'. It is not a secret that their lobby blocked the 'excess load' being shed on the other cadre. Coming to the 'fairness' in decision, even CESTAT members think twice before passing orders where the revenue interests may be affected. After all CESTAT is a unique animal where the President of CESTAT AND ALSO the Ministry can transfer the members.The only remedy for the problem appears to be that the High Courts truly exercising their administrative control over these babus in a real sense.
Posted by sureshbala sureshbala


Sub: TIME LIMITATION FOR DISPOSAL OF APPEAL BY CIT APPEALS IS NECESSARY In spite of Board�s Instructions No. 20/2003 dated 23rd December 2003, appeals before the CIT (Appeals) are pending for disposals for very long time; and in some cases they are pending for years. Pendency of appeal before the CIT (Appeals) not only results in harassment to assesees for recovery of disputed demand, but also results embarrassment to Assessing Officers to enforce recovery of disputed demand owing to pressure from Senior Officers in order to achieve unrealistic action plan targets of budget collection and arrear demand collection. Assessing Officers are either tempted or compelled to raise disputable demand before the end of financial year in order to achieve action plan targets by insisting payment of demand upto 50% at least by end of financial year. Even after collection of 50% of demand neither the assessee have peace of mind nor the Assessing Officer since such stay of demand is granted for certain period; and normally the assessee�s appeal not even posted for hearing by CIT(Appeals) before the end of the said period of stay. Even after payment of 50% demand the assessee has to run from office to office to get further extension of stay or to get his appeal disposed off. There are instances where assessees have filed writ to see that their appeals are disposed off immediately by the CIT (Appeals) in order to avoid hardship on recovery of demand by Assessing Officers. In order to avoid harassment to assessees and embarrassment to Assessing Officers, it is suggested that the Board may consider to issue necessary administrative instructions on the following lines: 1. Prescribing time limitation by which appeal shall be disposed off by the CIT (Appeals). Period for which the assessee was granted time in writing to furnish specific particulars as called for by the CIT(A) may be excluded from the period of time limitation. 2. a) If the demand, disputed before the CIT(Appeals), is covered by any decision of the Tribiunal/HC in favour of the assessee, such demand shall not be enforced for recovery by the Assessing Officer till the disposal of appeal. This will prevent Assessing Officers to raise huge disputed demand for sake of budget collection, even though the proceedings are not getting time barred by end of the financial year. And interest of revenue is also protected since assessee is laible to pay interest u/s 220(1) on belated payment of demand. Assessing Officer may also protect interest of revenue by resorting to provisional attachment of properties by making a reference to Tax Recovery Officer in appropriate cases. Liability to pay interest u/s 220(1) may stimulate and compel assessees to pay disputed demand keeping in view the facts of their case. b) If the demand, disputed before the CIT(Appeals), is not covered by any decision of the Tribunal/HC in favour of the assessee, such demand shall be kept in abeyance till disposal of appeal on payment of 50% of disputed demand. In financial hardship cases, the Assessing Officer may be empowered to grant installments or to grant stay on payment of any sum on merits of the case. This will bring transparency and clarity among tax payers and save their time and labour in filing and pursuing applications for stay of demand before one officer to another officer; and it also saves time and manpower of Assessing Officers in disposal and submitting of report on such stay applications to the Senior Officers. V. G. IRKAL Hospet
Posted by vasantirkal vasantirkal


Sub: Protocol for appellate Commissioner I simply loved the comment that no protocol officer worth his smart uniform will waste his talents on a Commissioner (Appeals). It brilliantly captures the sycophantic and self serving culture prevailing in the department.
Posted by Radha Arun

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