Dr. K. Shivaram, Senior Advocate, laments that despite the strictures of the Supreme Court that the Income-tax department should “wake up“, there is not much improvement at the ground level. He argues that urgent judicial and legal reforms are absolutely imperative not only to clear the backlog of cases but also to ensure that future cases are decided promptly. He has also offered valuable suggestions to aid the process
1. Introduction
In 1997, when India celebrated 50 years of Independence, the Chamber of Income Tax Consultants celebrated this golden anniversary in a unique way by dedicating a publication titled “50 Landmark Judgments on Direct Taxes“ which was released by then Chief Justice of Bombay High Court, Hon’ble Justice Mr. M. B. Shah. The Hon’ble Prime Minister of India, Shri Narendra Modi, has a great vision for India and when we celebrate our Platinum Jubilee of Independence of India, we as citizens of this great country, should make a honest attempt to fulfil his vision of nation building process by suggesting ways and means to reduce the tax litigation, ensure better tax administration and adopt better tax-payer friendly tax laws.
Hon’ble Justice Mr. R. C. Lahoti, the former Chief Justice of India, while addressing the National Tax Conference at Jaipur stated – “Corruption is a cancer, eating into the roots of the society. It is difficult to fight against corruption because the chances of success are bleak. But this is no reason for despondency. The laws alone cannot prevent the commission of crime. Nor can a tax-payer who is placed like a lamb before a corrupt official who is like a wolf, fight against corruption. It is a combined, united and forceful effort of the tax practitioners that can do a lot for preventing corruption. So also you can exercise your influence in shaping the budget and thereby the economy and welfare – destiny of the nation. Associations and organisations must collectively, but unostentatiously, honour and recognise the honest and condemn the corrupt. The process may be slow but is evolutionary and is bound to have its curative effect. The honest and deserving must feel encouraged; the dishonest and corrupt must feel marginalised“. (Excerpts – AIFTP Journal, Sept 2002 P. No. 7)
Many a times assessees inform us that they are made to adopt unethical practices to avoid the harassment, though they are very well aware that they will succeed in appeal. After all, once an assessment is made, there is a tax demand, interest, penalty and notice for prosecution. For appeals, there is no time limit fixed for hearing or passing of orders and it may take years to secure an order from the appellate forum. Even if the assessee succeeds in appeal, the Revenue will invariably, if disputed tax at stake is large, carry the matter up to the Supreme Court. To reach finality it may take more than three decades and in such a situation, the assessee takes a calculated risk by adopting unethical practices to avoid the litigation and cost involved.
I would like to share my views on tax litigation in India and how tax professionals can contribute to the development of the nation. In India, the Revenue Department is one of the biggest litigants. More than 60’% of tax litigation before the Income Tax Appellate Tribunal is fomented by the Revenue. In the High Courts and the Apex Court, more than 70% of tax litigation is initiated by Revenue. It is very unfortunate that, though the Revenue is the biggest litigant, they do not have an All India Tax Litigation Cell – which can administer the tax litigation on an All-India basis. In CIT vs. Krishna K.Agarwal (2017) 245 Taxman 75 (SC), the Revenue has filed a SLP before the Supreme Court by filing condonation of delay application of 3,381 days, though the issue involved was already covered by the Apex Court. Dismissing the appeal of the Revenue the Hon’ble Apex Court had observed that “the concerned authorities need to wake up“.
Professional organisations and tax practitioners, with the help of Right to Information Act, can bring to the attention of the authorities concerned, the orders of Courts or Tribunals – where the Courts have passed general orders to implement better administration of justice, which are not implemented and request the authorities concerned to take appropriate remedial measures.
2. Tax litigations – problems and suggestions
2.1 Assessment proceedings
Returns are to be filed with due care and after advising the assessees to avoid adventurous tax planning. As 90 per cent of the returns are accepted, the professionals have a greater responsibility to advice the assessees to pay the tax rightfully due to the Government. In the assessment proceedings, if proper compliance is ensured, then substantial litigation can be avoided. If all the notices are complied with and all the submissions are made in writing, there will be very little scope for the Assessing Officer to make unfair additions. It is the duty of assessees and their representatives to place all the material on record. Article 265 of the Constitution of our country mandates that ’no tax should be collected without the authority of law’. However some of the officers make additions, knowingly well that the same will be deleted in appeal. In spite of continuous representations by the tax professional organisations to introduce the accountability provisions, the Government has not introduced any such provision. It is suggested that the accountability provision as suggested by Dr. Raja J. Chelliah in his committee report. (1992) 197 ITR 177 (St.) (at . 257), may be introduced. CBDT has come out with the Circular, No. 14 | (XL . 35 ) 11-4-1955. Stating that ‘it is the duty of the assessing Officer to bring to the notice of the assessee that any deduction which he is entitled but not claimed and assist him in attaining the deduction.’ It is desired that the mindset of the Revenue officials must be changed from tax collectors to tax service providers
2.2 Commissioner of Income Tax (Appeals)
Commissioners of Income Tax (Appeals) are the First Appellate Authority. They have the power of enhancement and can do what the Assessing Officer may have failed to do. It is desired that if Commissioner of Income Tax (Appeals) are made to work as Departmental Representatives for at least one year before the Tribunal. This will help them to discharge their judicial functions better. In 1992, the Chamber of Tax Consultants, with the help of the then Chief Commissioner of Income Tax, Mumbai, had a very interactive half day workshop with all Commissioners of Income Tax (Appeals) to discuss various practical difficulties faced by the assessees. After the meeting, the minutes were circulated, which has helped speedy disposal of matters. Tax professionals have responsibility to represent their clients competently before the First Appellate Authority. It has been observed that in a number of matters, the assessee does not file the statement of facts.
It is pertinent that in an appeal before the Tribunal, the assessee cannot file statement of facts. Hence, when an appeal is challenged before High Court the statement of facts becomes a very important piece of evidence to support the case of the assessees. Similarly, when additional evidence is produced, the assessee must make an application under rule 46A of the Income Tax Rules. Many a times, even the Commissioner (Appeals) accepts the additional evidence without following the due process of law. As there is no time limit prescribed, many a times, the remand reports are not furnished within a reasonable time, which delays the disposal of appeals. There has to be a time limit prescribed for furnishing the remand report. Knowing the law and procedures properly helps the tax consultants to make quality representations.
2.3 Disputes Resolution Panel
Only the issues relating to Transfer Pricing in international transactions, taxpayers can avail of the Dispute Resolution Panel forum. A thought for consideration is, a similar provision can be extended to domestic taxpayers.
2.4 Income Tax Appellate Tribunal
Income Tax Appellate Tribunal is the final fact finding authority under the Income Tax Act. Against the order of the Tribunal, an appeal can be filed before the High Court only on a substantial question of law. The total pendency of appeals before the Tribunal as on 31-3-2017 is 90,000 appeals. The matters are heard within two years of filing of an appeal before the Tribunal. It is desirable that the matters may be heard within six months of filing of appeals. It is observed that 80% of the orders of the Tribunal are accepted by the assessees and Revenue. Only 20% of the matters are carried to the High Court. Figures published in the souvenir of the ITAT on the occasion of Platinum Jubilee celebrations show that 81.85% of the decisions rendered by the ITAT are upheld by the High Courts.
It has also been observed that many young professionals appear before the ITAT. Many of them are very promising and the need of the hour is that they need to follow the conventions and ethics of the profession. As practice of training juniors in ‘Chamber Culture mode’ is diminishing, the juniors will now have to learn pleadings by watching the Tribunal proceedings, observing their seniors argue matters. If they have to excel, they have to follow the code of ethics.
Many young professionals have joined the Bench and some of them are very good at law. We hope that they will be groomed as ideal members of the ITAT. It is the Bar and the Bench collectively that make the ITAT – one of the finest and model institutions of our country.
It is very unfortunate that the Government is proposing to appoint the members of the Tribunal for a fixed tenure of five years and thereafter, renew the tenures at their option for another five years. With respect, such a law is not in the interest of this glorious institution and will discourage many young professionals to join the Bench due to this restriction of five years term. The Members, who join, may always have the apprehension that if he decides the matters against the Government, then he may not be given one more term of five years. As the law stands today, a retired Member is not allowed to practice before the Income Tax Appellate Tribunal. If the proposed change is implemented, then a chartered accountant or on Advocate who joins the Bench may be told to vacate after five years’ term and it will be difficult for him to re-establish his practice once again. I am therefore of the firm opinion that the present system of appointing Members should continue and not be changed.
2.5 Repetitive Appeals
S. 158AA, provides that; when an appeal is pending before the Supreme Court in an assessee’s own case, the Revenue can make an application before the Tribunal to keep the issue alive. Can the provision be likewise extended – when an issue is pending before Apex Court not necessarily of the same assessee? A thought for consideration is that when an issue is decided by the High Court, the same is binding on all the assessees which are within the jurisdiction of respective High Court. The Revenue might have taken the matter before the Apex Court and in such a situation the Revenue may be permitted to file the declaration before the Tribunal and the Tribunal can give liberty to the Revenue to approach the Assessing Officer to give effect to its order. If the section is properly implemented with necessary amendments, it may help in reducing the litigation before Supreme Court and High Courts.
2.6 High Court
An Appeal can be filed only on substantial questions of law before High Court. 80% of appeals are dismissed at the admission stage itself. After admission, it takes nearly 15 years to reach finality in tax matters. In Mumbai, some appeals admitted in the year 2000 are yet to be taken for final hearing. The delay in disposal of the matters is due to shortage of Judges. Ideally the High Court must be able to dispose a matter within six months of filing of appeal. Where large number of matters are pending, there should be at least two tax Benches continuously constituted to deal with tax matters. Otherwise the pendency of appeals will increase. In earlier days, the High Court appeals were handled by the Ministry of Law and Justice and one solicitor used to file the Vakalatnama in all the matters. This system was discontinued. It is desirable that to maintain the continuity of such practice. The filing of vakalatnama may be given to one law firm who can be held accountable and briefing can be done from the panel of lawyers of the tax Department. One adjournment in High Court costs more than ` 25,000 to the tax-payers of our country. This can be saved by proper management.
The Hon’ble Bombay High Court in CIT vs. TCL Ltd. (2016) 241 Taxman 138 has passed a detailed order asking the Chief Commissioner of Income Tax to host the details of matters admitted before the Bombay High Court, matters accepted by the Revenue, etc. online. Though the assurance was given by filing an affidavit, however, no action has been taken by the tax administration in this regards. It has been observed that the Hon’ble Apex Court and High Courts have passed a number of orders asking the Tribunal to refer the matters to the High Court. 90 per cent of the matters of the Revenue have not been referred to the High Courts mainly because the Revenue has not moved the requisite application before the Tribunal to refer the matter to High Court. This has resulted into loss of crores of rupees of tax which is due to the Government, which would have benefited the nation. Similarly, as per the pre-1998 tax provisions on reference jurisdiction, when the Apex Court or High Court decides a tax reference, the matter had to come back to the Tribunal to give the effect and thereafter, the effect could be given by the Assessing Officer. It seems that in 90% of matters where the Revenue had succeeded before the Apex Court and High Courts, no effect has been given resulting into loss of crores of rupees to the nation. This is mainly due to lack of accountability in the tax administration.
Who can raise such questions? If the Govt. is serious on the implementation, they may request Hon’ble Justice Mr. R. V Easwar (Retd.) to prepare a white paper on the subject and suggest ways and means to reduce unintended litigation and also on how to give effect to the orders and recover the tax which is rightfully due to Govt. Professional organisations have suggested that all orders passed by the Chief Commissioner or Commissioner may be made appealable to the Tribunal, so that the burden of the High Court is reduced. Though in filing an appeal by the revenue, the monetary limit is fixed [refer Circular No. 21/2015 dt. 10-12-2015 (2015) 379 ITR 107 (St)], a thought for consideration is that whether an appeal can be filed to the High Court, can be decided by a committee of independent panel, wherein a Retired High Court Judge, who has the requisite taxation knowledge could be made the Chairman, and one retired Member of the ITAT and one Commissioner can sit together, analyse the judgment and then take a decision – whether appeal can be filed to the High Court or Supreme Court? If this process is followed, the success rate of the Revenue will increase and only deserving matters would be taken to the High Court and Apex Court. In the process, the taxpayers’ money, which is now utilised for unproductive purposes of litigation, can be saved.
At present appeals are filed mainly because of three reasons (a) the amount involved is large (b) fear of audit, wherein the officer who has taken the decision not to file the appeal may be questioned in future which may affect his promotion and (c) no accountability, assuming the appeal is dismissed, no question
will be asked why appeal was filed in the first place.
2.7 Supreme Court
An appeal to the Supreme Court is beyond the reach of the common citizen of our country. It is only the tax administration or the big corporates, who can afford to take up the matters to the Supreme Court. One adjournment will cost the assessee a minimum of ` 10 lakhs.
Professional organisations have made representations, from time-to-time, for setting up the Benches of the Supreme Court in four regions and the then Hon’ble Prime Minister of India, Dr. Manmohan Singh was in favour of this proposal. However, as the Supreme Court was not in favour of setting up Benches in four regions and hence, the proposal could not be implemented.
Professional organisations have also made representation to link all the High Courts with the Supreme Court – So that the litigants sitting at respective High Court may argue the matter before the Supreme Court. To start with, only SLP matters may be taken at the option of the assessee. If it works well, the same may be extended to other matters. The Income Tax Appellate Tribunal has started the E-Benches of the ITAT, which are working satisfactorily. Hence, the same module can be implemented for the Apex Court. If all the courts are linked with the Apex Court, it will reduce the pendency in tax matters and litigation costs will be reduced substantially.
Professional organisations have made suggestions to the Government that when an important question of law is involved and it affects a large number of cases, the Tribunal may be given power to refer the matter directly to the Supreme Court. Section 257 of the Income-tax Act can be amended accordingly. This will help in reducing the pendency in various High Courts and finality on the issue can be achieved within reasonable time.
2.8 Authority for Advance Rulings
It is desired that the Authority for Advance Rulings may be brought under the umbrella of Ministry of Law and Justice, which at present, functions under the Ministry of Finance. It is desired that its Members may be selected amongst the Members of the ITAT, who are better equipped to deal with international taxation issues.
2.9 Settlement Commission
The concept of Settlement Commission is very good. However, there are various conditions to be satisfied for approaching the Settlement Commission. It is desired that law may be amended in a way to facilitate any assessee to approach the Settlement Commission at any stage and such an opportunity can be availed only once. It is very unfortunate that more than 40 years have passed but the Government has not appointed a single professional either from the field of law or accountancy as Member of the Settlement Commission. An ideal Settlement Commission should have one reprehensive from the Revenue, one from the Accountancy field and one from the field of Law. There has
to be more transparency in the process of appointment of Members of the Settlement Commission.
2.10 Revision before Commissioner
Provisional power has been given to the Commissioner to use their discretion and allow the relief which is due to the assessee. There are instances earlier where, an application was made and the Commissioners gave the relief even without calling the assessee. In case of rejection of the application, the only remedy available to the assessee is to approach the High Court by way of writ petition. Professional organisations have made representations from time-to-time to make an amendment in the Income-tax Act, urging that all the orders passed by the Commissioner may be made appealable to the Tribunal. If such an amendment is introduced, it will save substantial time of the Court and assessee can have quick access to the
justice awarded by the Income Tax Appellate Tribunal.
2.11 Prosecution
It is very unfortunate that the prosecutions are initiated and launched in some cases for technical offences. When prosecution is launched, it takes decades to finalise the matter before the Magistrate Court. There has to be a specialised Court to deal with prosecutions under Direct Taxes and prosecutions must be finalised within reasonable time.
3. Arbitration in tax proceedings
A thought for consideration, is whether there can be arbitration proceedings to settle the tax disputes. According to me, it may be possible to have arbitration proceedings in taxation matters. The Arbitrator must be either a retired Judge or from the eminent professionals whose integrity is beyond doubt. They should be able to give the ruling within two months of filing of the petition.
4. Research in taxation
The professional organisations may take lead in research in taxation. It should be an ongoing process. e.g. digitalisation of tax administration, eradication of corruption in tax administration, bringing more assessees under tax net, reduction in tax litigation etc. Once the paper is presented by the group, it can be made public for the comments. After receiving the view of the tax professionals and taxpayers, a final paper may be preferred and presented to the Government for their consideration. For the research work, one may involve law students, retired officials, professionals and universities. The Chamber has many young professionals who can display their potential by proper guidance. They may be motivated to work on the research paper and each year. one research paper may be prepared and be presented to the Hon’ble Finance Minister for his consideration.
5. Conclusion
Hon’ble Justice Mr. Dalveer Bhandari in the Publication “Judicial Reforms: Recent Global Trends” at page No 5 stated as under:- “Urgent judicial and legal reforms are absolutely imperative in our country not only to clear the backlog of cases but also to ensure that future cases are decided promptly”. The Hon’ble Justice has highlighted about 12 reasons which cause delay. According to me, same will also hold good for tax litigations – which are pending before various Courts and the Tribunal. The Chamber of Tax Consultants, being one of the oldest associations of our country, can forward objective suggestions on better tax law and tax administration for our country. Our little contribution will help in the nation building process. India needs a strong Tax Bar with honesty, integrity, ethics and knowledge, who can stand up and fight against corruption to achieve the dreams of our beloved Prime Minister to have a corruption free India.
Jai hind !
More the laws, more the tyranny is. And more the tyranny, more is the corruption.
my further view is, the prosecutor cannot be the judge principle is relevant here too; how revenue man called CIT(A) is relevant as a first appeal authority – my reasoning is – any way he is no judicial kwowledgeable person by ny measure – he is more bound to support revenue unless he like revenue persons is interested in obvious advantages – hence this person is the first source of corruption in tax litigation, i have seen in a tax case this person is influenced by an incorrigible CA as a representative a tax payer influenCed the CIT(A) TO SETTLE the issue by taking some bribe that person agreed – that made the matter be delayed inordinately at the CIT(A) itself; fact of acting as representing a hapless tax payer by a non professional lawyer by by accounts man creates issues – law is just not logics based product only but it ought to be ‘reasons ‘ based – justice Mr Dalveer Bandari rightly said in his observations in his observations, i had appeared before him in Bombay high court, I could read his approach to law was highly reasonable , when in his chandrachud jr was there where he was supporting the govt but Justice Mr. Bhandari rightly handled a matter of service law issue pending for a more than a decade in which some litigants died too in a shipping ministry matter – Mr justice Bhandari told Adv Tulsi representing the ministry that the secretary to ministry shall appear before the bench if the ministry fails to pay the dues of the faculties whose remuneration LBS SHIPPING TRG ESTABLISHMENT then functioning under the ministry, (one needs to know always all government’s ministries worked unreasonably against any norms of ethics, which is the high lighting fact here) ;
one never make the prosecutor to be the judge is the principle i highlight here by citation.
any departmental man obviously has own worry how the department would look at him – that is the first ethical deficiency that lad to basic corrupt ideas in the person who is an adjudicator – in the circumstances, my recommendation is instead of CIT(A), FIRST APPEALATE , INSTEAD the first fact finding need be from a person not connected to the revenue authority – that may be say from any other ministry like ministry of law – obviously not from finance – that would immediately kill the tendency of unethicality in the man – after all perception of corruption emanates from any non ethical practice or immorality – in this world greed for money starts , by the stratling behavior for illegal means to achieve anything it is like some PONZAI schemes ruling the mind of the first appeal authority behavior – in the past say before 7 decades the first departmental quasi judicial man used to feel he is now considered to deal with some justice which he cared to, but after 4 or 5 decades of independence lost that charm as such, as today is ruled by greed for money from any source – tax money is an easy money for the government under any meaningful perception – as governments are un from source of money called ‘Taxes’ – but for so called ‘Taxation’ no government ever would sustain for the governments too are some ‘NPA’ kind corporate only – that taxes only make all kinds of politicians clamor for political ambitions , no politician is society well wisher but some self centered person would seek any kind crime that would lure him , that way money in form lures any today- that way many taxpayers have become hapless persons in the tax administration concept, which is to be tackled by some transformation tax management methodology;
then i would say a saying ‘No peacock would give its some feathers without plucking’ but govt tax mechanism is need to be plucked like any one did with a peacock – for No peacock wll give in without being plucked under any principle, corruption as such is some decayed tooth like if you do not pluck the tooth like a dentist, decayed tooth would damage the system called your body – your body is governance – no amount of pleading would work with any robber, for his intention is well known – he wouldn’t care the traveller on the high way but just rob – that is the revenue = robber commissioned by ministry of finance some selected robbers in the name of so called ‘revenue services’ their salaries and perks are provided by tax payers’ moneys easily to be taken or eased out of the hapless tax payer called the citizen however dejure sovereign he might be is my considered thought – i fully appreciate the pleading effort of the author of the article.
this submission has malice on any.
“Dr. K. Shivaram, Senior Advocate, laments that despite the strictures of the Supreme Court that the Income-tax department should “wake up“, there is not much improvement at the ground level. He argues that urgent judicial and legal reforms are absolutely imperative not only to clear the backlog of cases but also to ensure that future cases are decided promptly”
I welcome arbitration proceedings which was suggested by one of the High Court judge to the effect ” why Lok Adalt in tax matters which suggestion should be considered seriously by the Govt. Besides that as far as first appeal is considered it can be decided by senior chartered Accountants, senior tax advocates, willing, retired members of ITAT and also retired CIT/CCIT all of them of proven integrity and honesty on ad hoc fees per case This system was practised at Pondicherry state of india before Independence when the French Govt. This will eliminate arrears,docket explosion. tax terrorism and corruption and satisfy the accountability which term is not known to the income tax law inspite glorious suggestion and implementation made by shome committed in regard to accountability and the assessee should be treated as “customer” The National Litigation policy which prohibits “for the sake of filing appeal” to ward off responsibility, the said policy was put to useless lumber and in spite of the ruling of the supreme court/High courts in connection with flimsy appeal.In Spite of CBDT issues circulars to withdraw appeals ons ome select issues and Hon”ble Ministerof LaW and Justice statement and concern for reduction of flimsy litigation, the message is not percolated to the down the the level
Now the big question remains who is to bell the cat?
is the answer to the author’s anguish
I agree with the learned Author that , to reduce tax litigation there should be All India Tax litigation Cell of the Tax Administration
I agree with the learned author that an ideal settlement commission should have one representative from the Revenue , one from the Accountancy field and one from the filed of law . There has to be more transparency in the process of appointment of members of the Settlement Commission. Procedure adopted by the Govt for appointment of members of the ITAT may be followed .
good article, i support all the views expressed, but problem is government is ruled by law makers in the form of MPs – see Japan’s PM Abe today before moving first constitutional amendment sought the views of people on Art 9 that simply made Japan cannot have its own military force; that country is superior economical;y than india with mindless constitutional amendments even on fundamental rights enshrined in the Part III of the constitution of India,though Art 368 barred Parliament not to interfere with fundamental rights, and further CJI Mr SR Das (full bench) in champakkam Doraisway v the st of Madras (1951) rightly high lighted the the Art 368 restriction on parliament and the bench did strike down the Madras govt order on reservation of seats in engineering and medical colleges – see now how there is reservation of seats in these colleges – none questioned, such is the level of public awareness as also the law makers are absolute scoundrels is obvious – that way indian constitution is vandalized , thanks to judiciary failed by so called irrational ideas of judicial restraints, but i see todat since 2007 after CJI Mr Sabharwal judgement on LR Coeslho v st of Madras, that struck down the schedule IX from the first constitutional amendment – very perpetrator was very first PM Mr Nehru, that was why Mahatma Gandhi doubted if the indian politicians would protect the independence of indian people – great premonition – why corruption became so apparent is just because we have all kinds of political scoundrels sit as law makers from 1950s on till date – none worth to be paid one penny as PM or CM or MPs or MLAs, so too a lot of IRS officials of today but pay commissions did very funny jobs from sixth pay commission on – why inflation will not ‘dog this country’?
No point in pleading before these scoundrels but move Art 226 or Art 32 writs right earnest else the country will be the womb of great corruption;
I don’t have hope in this dog torn like politicians in india tearing the indian fabric.sorry , today i saw the very BJP counsellors to be for Panvel municipal elections paying gullible public rs.5000 or rs 4000 to women and men – what BJP under Modi is one needs to know – he is some wolf in sheep garb sorry.
Respected Sir,
The suggestions made in the above article are very useful.
I have a small submission to be made.
The CIT Appeals is supposed to be a higher assessing authority and have powers to enhance the demand in appeal.
In this situation , when a CIT Appeals, a superior authority of the department, issues the appellate order, either by reducing the appeal or enchancing the appeal, the department should not be allowed to go for further appeal, because it is the decision of their own superior authority who has powers of even enhancement of demand. If the demand is enhanced the assessing authorities are happy and if the demand is reduced how can they themselves show unhappiness against the orders of their own superior authority.
Alternatively the powers of enhancement of Appeal may not be there with CIT Appeals, since the similar powers are already there with PCIT or CIT Under sec 263. The assessee is put to double loss by the power of enhancement of appeal.
Can the Department go for further appeal if the relief is granted to the assessee by the PCIT or CIT under sec 264, if not , why the second appeal is allowed if the relief is granted to the assessee by the same rank authority, CIT appeals.
Alternatively the First Appellate Authority may also be appointed under Ministry of Law instead of Finance and the powers of enhancement of Appeal may not be left with CIT Appeals . In that case the department may be allowed to go for second appeal.
This may reduce lot of litigation from Department side.
Please correct me wherever necessary.
It is the government that is the biggest litigant so far as the tax laws are concerned. Most of the appeals before superior forums like Tribunal, High Court and Supreme Court are filed not on merits but for assuaging the hurt egos of the authorities whose orders are upturned by these higher forums.