File appeals on merit, CBDT tells taxman

Board questions "apathy" of dept officials, cites at least four cases where taxman received flak from courts and ITAT

Disapproving of the ‘casual’ attitude of tax officials in filing appeals and pursuing litigation in important revenue matters, the Central Board of Direct Taxes (CBDT) has asked the I-T department to take legal recourse only in “deserving” cases.

In a departmental communication issued this month, the Central Board of Direct Taxes has questioned the “apathy” of the department officials on these matters, citing at least four cases where the taxman received severe flak from the courts and other judicial forums like the Income Tax Appellate Tribunal (ITAT). “Needless to say the courts are taking a stern and inclement view as far as department’s actions in litigation matters is concerned,” the CBDT, the apex policy-making body of the Income Tax department, said.

The Board, which has been asking the taxman to cut down on frivolous litigation in order to usher in a non-adversarial tax regime in the country, said filing of appeals or any other legal recourse should be the undertaken only in "deserving" cases.

"The significance of filing appeal and pursuing litigation only in deserving cases cannot be over-emphasised, more so in the backdrop of the fact that department is facing shortage of officers at all levels. It is imperative that the available resources are optimally utilised to obtain maximum benefit out of litigation," the latest directive, accessed by PTI, said.

The CBDT order, while rapping the department on the knuckles, cites an example where in a "sensitive" case of 2009 no appeal was made for over five years and when the case reached the Supreme Court, the apex court took a "serious view" of the incident and directed the department to "take action" against all those officials who were responsible for the negligence in the said case. The IT authorities had not filed an appeal in the case and belatedly moved a Special Leave Petition in the apex court.

The CBDT called this case a "shocking incident" and a perfect example of "apathy" exhibited by department officials in pursuing litigation issues.