To ensure tax officials do not delay follow ups on Supreme Court ruling, the Central Board of Direct Taxes has prescribed fresh timelines for filing of appeals in tax cases to ensure a zero delay regime in such matters.
In recent instructions outlining a standard operating procedure on filing of appeals and special leave petitions (SLPs), the CBDT has listed various actions that would have to be completed within 85 days of the date of the order. The Special Leave Petition against the judgment of High Court has to be filed in Supreme Court within 90 days of date of pronouncement of the order.
“Several instructions and directions have been issued by the CBDT from time to time emphasising upon the need for timely filing of appeals and SLPs in the Supreme Court and proper conduct of litigation. However, a number of SLPs are being filed with inordinate delay,” the CBDT said.
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Every Principal Commissioner of Income Tax having jurisdiction over a station that has a Bench of the High Court will ensure a proper institutional mechanism for timely dissemination of the court orders. They will also set up a High Court Cell that will coordinate with the Standing Counsels on various tax related cases before the court and will track all orders and judgements on a daily basis.
Proposals for SLP will be sent by the Principal Commissioner of Income Tax after due consideration by the Directorate of Legal and Research and has to be sent within 20 days of the judgment.
“The quality of proposal sent by the Principal Commissioner of Income Tax or Commissioner of Income Tax is extremely important for efficient and effective litigation management in the Department,” the CBDT has stressed, adding that appeal to the High Court and the Supreme Court can be filed only on ‘Substantial Questions of Law’. It has, however, been observed that many SLP proposals involve only ‘questions of fact’, it further said.
Experts note that as a general trend, it has been seen that SLPs filed by the income tax department have been inordinately delayed.
“The overall timeline involved in various phases has been reduced to 85 days. Further, revised proforma has been introduced for submitting the proposal to file the SLP enlisting certain additional details including appeals involved against the SLP filed, specific issue wise tax effect involved in SLP proposal apart from the aggregate tax effect on disputed issues, reasons recorded and approval of PCIT in case of reassessment etc. With the said instructions laid down by CBDT, it would unequivocally lead to timely filing of SLPs and streamlining the entire process,” said Sanjoli Maheshwarri, Director, Nangia Andersen India.
Following the Supreme Court directive for adopting the Information and Communication Technology (ICT) for seamless integration of all phases, the CBDT had set up a Legal Information Management Briefing System Committee (LIMBS) and High Powered Committee. “The High Powered Committee has advised the Board to work towards a “Zero Delay Regime” in the matter of filing of appeals and SLPs,” the CBDT noted.
Litigation and pendency of tax cases has been a major challenge for the income tax department. Nearly Rs 10.6 trillion of funds is locked in tax cases for the department by March 31, 2021 with a number of cases pending for over 10 years.