Delhi High Court
All India Federation Of Tax ... vs Uoi And Anr on 6 November, 2023
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 01.11.2023
Judgment pronounced on: 06.11.2023
+ W.P. (C) 3423/2013
ALL INDIA FEDERATION OF TAX PRACTIONERS ..... Petitioner
versus
UOI AND ANR ..... Respondents
Advocates who appeared in this case:
For the Petitioner : Mr. Prem Lata Bansal, Senior Advocate
with Mr. Shivang Bansal & Mr. Anunav
Kumar, Advocates
For the Respondent : Mr. Prashant Meharchandani, Senior
Standing Counsel with Mr. Akshat
Singh, Junior Standing Counsel for
Respondent No.2.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE TUSHAR RAO GEDELA
JUDGMENT
TUSHAR RAO GEDELA, J.
1. The present petition has been filed under Articles 226/227 of the
Constitution of India, in the nature of a Public Interest Litigation (PIL)
seeking following prayers:-
"a. To formulate a policy and issue necessary directions to
Commissioners (Appeals) to take steps for expeditious disposal
of appeals or within the time limit envisaged by Section
250(6A) of the Income Tax Act 1961.
b. To increase the number of Commissioners (Appeals) and also
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provide such other infrastructural support as is required by the
Commissioners (Appeals) for disposal of appeals
expeditiously.
c. To make clear guidelines for the Commissioner Appeals to
dispose of the appeals in a chronological manner and also for
passing orders within 10 days after conclusion of hearing or
within a reasonable period."
2. Facts as culled out from the petition filed by the petitioner are as
follows:
"2A. That the source of knowledge of the facts stated in the Writ
Petition is the information provided by the members of the
Petitioner and also the information gathered under the Right to
information Act from the offices of the Commissioners of Income
Tax (Appeals) in Delhi and from Respondent No. 2 herein i.e.
the Central Board of Direct Taxes. On the basis of information,
it is an undoubted position that the appeals are decided by
Commissioners of Income Tax (Appeals) after long delays,
which is causing harassment and cost to the assesses.
2B. That the delay in disposal of appeals by the Commissioners
of Income Tax (Appeal) is adversely affecting large number of
assesses and it is difficult for all of them to approach this
Hon'ble Court. Therefore, this Writ Petition is being filed by the
petitioner.
2C. That the present Petition is being filed in the interest of
public at large and the assesses under the Income Tax Act and
the Tax Practitioners in particular and accordingly, the relief
sought in the petition will be in the interest of above persons and
no other person / body / Institution is likely to be affected by the
orders sought in the writ petition. The petitioner has impleaded
Ministry of Finance and Central Board of Direct Taxes as
Respondents as the Commissioners of Income Tax (Appeals) are
working under their control and direction.
2D. That the Petitioner, All India Federation of Tax
Practitioners is one of the oldest and the largest Association of
Tax Practitioners in the country. At present it is having more
than 5,400 individual tax professionals / Practitioners as its
members apart from membership of 1 19 Tax Bar Associations.
Accordingly, the Petitioner is representing a large number of
Tax Professionals. It is having its central office at 215, Rewa
Chambers, 31, New Marine Lines, Mumbai-400020 and also
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zonal offices at number of other places, including at Delhi. It is
registered under the Societies Registration Act 1860.
3. That the Commissioners of Income Tax (Appeals) are working
as per the directions of Respondent No. 2. In this regard every
year an Action Plan is given by Respondent No. 2 to the
Commissioners (Appeals) for disposal of appeals. The
Respondents are well aware of the provisions of Section 250(6A)
to the Income Tax Act and also about pendency of appeals. In
reply to the query raised through one of the member of the
petitioner, the Respondent No. 2 has also given information in
this regard vide its letter dated 14.12.2012, a copy of which is
also enclosed here with this Petition. The Action Plan being
issued by the Respondent No. 2 is in disregard to the provisions
of Section 250(64) of the Act."
3. We have heard Ms. Prem Lata Bansal, learned Senior Counsel
appearing for the petitioner and Mr. Prashant Meharchandani, learned
Senior Standing Counsel, for the respondent No.2/Central Board of
Direct Taxes (in short "CBDT"), the contesting party, and perused the
documents including the additional affidavit filed on behalf of CBDT in
terms of order dated 14.09.2022 and 27.01.2023.
4. The present PIL has been pending since the year 2013 and various
orders and directions were being passed by this Court from time to time.
We need not dilate on those. What is relevant to consider today is the
additional affidavit dated 09.10.2023 filed on behalf of the CBDT.
5. According to the additional affidavit, the CBDT has provided the
manner in which, in the past as also in the future, pending appeals are to
be dealt with and disposed of expeditiously. The relevant paragraphs of
the said additional affidavit showing the road map as to how the
department seeks to dispose of pending appeals are extracted hereunder
for clarification:
" 5. That the updated status report in terms of order dated 18.09.2023 are as
under:-
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A. Updated statistics for Appellate Authorities*:
Sanctioned Strength (SS) and Working Strength (WS) of CIT (Appeals)
CIT (Appeals)
SS WS
CIT (Appeals) Unit (Faceless) CIT (A) (Non-faceless)
SS WS SS WS
*Source: Database of CBDT
B. No. of Appeals Pending (as on July 2023): The year wise breakup
may be seen in table below. Data for 2022-23 is up to end of July, 2023.
Financial Total New Total Cumulative % of
year Appeals Appeals Pendency disposal to
Instituted Disposed institution
2019-20* 2,16,441 98,868 4,57,808 45.68%
Faceless Appeals Non-Faceless Appeals Faceless Non- Faceless Non-
(CIT(AU) CIT(A) Appeals Faceless CIT(AU) Faceless
CIT(AU) Appeals Appeals
CIT(A) CIT(A)
New Progressive New Appeals Progressive Cumulati Cumulati % of % of
Appeals Disposal instituted Disposal ve ve disposal disposal
Instituted upto the upto the end upto the Pending Pending of new of new
upto the end of the of the year end of the of of Appeals appeals appeals
end of the year [For Non- year Appeals upto the instituted instituted
year [For [Faceless Faceless [Faceless upto the end of the
Faceless CsIT(AU)] CsIT(A)] CsIT(A)] end of the year with
CsIT(AU) year with Non-
Non- Faceless
Faceless (CIT(A)
(CIT(AU) [(b)/(a)*1 [(d)/(c)*1
(a) (b) (c) (d) (e) (f) 00] 00]
2020-21 23694 14547 3771 11552 397479 51513 61.4 306.34
2021-22 75433 57350 28068 15608 430951 71160 76.03 55.61
2022-23 117460 107680 29088 16888 434411 90956 91.67 58.06
2023 till 35787 22405 5605 4762 447521 97169 62.61 55.34
31.07.2023
C. Timeframe for Disposal of Appeals: Inputs same as previous letter
dated 28.12.2018.
D. Action Plan for Disposal of appeals within reasonable time
(Source CAP 2023-24): Litigation management is one of the key
priority areas of the Central Action Plan (hereinafter referred to as
CAP) for FY 2023-24. Targets for disposal of appeals by CSIT
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(Appeals/ Appeals Unit) laid out in Para 4.2 of chapter III of CAP
2023-24 are as follows:
i. Each CIT(A/AU) posted in Central and faceless appeal
charges is expected to dispose of a minimum of 450 appeals
(excluding VSVS orders) for the financial year 2023-24 and reach
the overall target of 1000 points across various categories.
Further, each CIT (A) posted in IT &TP appeal charges is
expected to dispose of a minimum of 350 appeals (excluding VSVS
orders) for the financial year 2023-24 and reach the overall target
of 800 points across various categories.
ii. Dispose of 100% of appeals pending as on 01.04.2023 that
involve demand of Rs.50 crore and above (Category Al).
iii. Mandatory disposal of 100% appeals of A2 & B1 category,
filed prior to 01.04.2020.
iv. Cases set aside and restored to the CsIT (Appeal) Units by
Courts/ITAT are to be disposed of on priority.
v. All appeals for which Form 5 under the Vivad Se Vishwas
Scheme has been issued to be disposed of within 1 week of issue of
Form 5, in all the cases where the Form 5 is visible.
vi. In case of insufficient do able appeals filed prior to
01.04.2020 in Al, A2 & Bl categories, to achieve target, appeals
filed after 01.04.2020 but before 01.04.2023 may be taken up for
disposal.
vii. With a view of ensuring even disposals throughout the FY
each CIT(A/AU) must ensure that the following quarter wise
disposal targets are achieved:
a. In line with the targets set by the Interim Action
Plan- 2023, 100 appeals filed prior to 01.04.2019 were to
be disposed of by 30.06.2023.
b. Each CIT(A/AU) must ensure disposal of a
minimum of 120 appeals during each quarter ending on
30.09.2023 and 31.12.2023 and disposal of a minimum of
110 appeals during the last quarter of FY 2023-24 i.e., by
31.03.2024."
6. After having perused the aforesaid additional affidavit and having
heard Mr. Prashant Meharchandani, learned Senior Standing Counsel
for CBDT, we are satisfied that the prayers as sought by the petitioner
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have been suitably addressed by the CBDT. Also, upon a perusal and
consideration of the aforesaid road map including the Central Action
Plan for the Financial Year 2022-23, it appears that the CBDT has
formulated a real time and a practical approach to dispose of the large
number of appeals pending before various Commissioner (Appeals).
7. So far as the prayers in clause (a) and clause (c) of the petition are
concerned the same appear to be satisfied in terms of the Litigation
Management Policy framed under the yearly Central Action Plan. In
fact, the said policy also addresses the specific grievances raised by the
petitioner.
8. So far as the prayer in clause (b) is concerned, the CBDT has
submitted that more than 570 Commissioners (Appeals) would be
needed to deal with the pending appeals as in the year 2014. It appears
that as against the sanctioned strength 349 Commissioner (Appeals),
only 229 Commissioners form the working strength as on July 2023.
It also appears that the CBDT has made a request to the
concerned authorities to increase the working strength by way of
promotions or direct in-take, as the case may be. That apart, it also
becomes clear that the Finance Act, 2023, has introduced a concept
where joint Commissioner/Additional Commissioners (Appeals) will
decide the First Appeals below the threshold of Rs. 10 lakhs. The
department claims to have sanctioned 100 such posts which according to
it, will substantially reduce the pendency of appeals. In that, the greater
percentage of the pending appeals belongs to this bracket/category.
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9. That apart, the concept of Faceless Appeals introduced since
September 2020 by the department also appear to have mitigated the
issue of disposal of pending appeals.
10. We are satisfied that so far as increasing the sanctioned strength
or the filing up of vacant posts of the Commissioner (Appeals) is
concerned, the CBDT may not have any role to play. However, the
Union of India, which is respondent no.1 in the present petition, may
take appropriate measures and decision in that regard, inasmuch as
filling up of all the present posts lying vacant would greatly assist in
disposals of the pending appeals. The Union of India may also consider
increasing the sanctioned strength of Commissioner (Appeals)
substantially at least to the extent of 570 of such posts, to achieve the
aims and objects of the Central Action Plan which is formulated every
year.
11. Ms. Prem Lata Bansal learned Senior Counsel, submitted the
following suggestions for consideration of this Court:-
a. Working/Sanctioned Strength of the Commissioner (Appeals)
should be increased substantially.
b. Since the assessees have to mandatorily deposit 20% of the
demand as pre-deposit for hearing of the appeal, further
demands should not be raised till the appeal is decided.
c. Since, the assessees are major stake holders, their interests
should be taken care of.
12. We have, while considering the aforesaid issues, noted that the
road map drawn up by the CBDT in the additional affidavit, adequately
addresses the concerns raised by Ms. Bansal, learned Senior Counsel
and as such do not feel it necessary to pass any further directions.
Suffice it to say that the CBDT shall scrupulously implement the
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aforesaid road map and the Union of India shall also address in all
earnest and as soon as may be, the directions contained in Para 10
above.
13. In view thereof, we are of the considered opinion that nothing
further remains for adjudication in the present PIL and the same is
disposed of accordingly.
(TUSHAR RAO GEDELA)
JUDGE
(SATISH CHANDRA SHARMA)
CHIEF JUSTICE
NOVEMBER 06, 2023/rl
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