The CBDT should reconsider the direction in the Central Action Plan of offering incentives to CsIT(A) to enhance assessments and levy penalty.: Bombay HC

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.3343 OF 2018
The Chamber of Tax Consultants & Anr. ] … Petitioners
Versus
The Central Board of Direct Taxes ] Dept. of Revenue & Anr. ] … Respondents
Mr. S. E. Dastur, Senior Advocate a/w Mr. Vipul Joshi, Mr. Harsh
Kothari, Mr. Abhishek Padwalkar & Mr. Dharan V. Gandhi for
Petitioners.
Mr. Anil Singh, ASG, a/w Mr. Sham V. Walve for Respondent No.1.
ALONG WITH
CIVIL APPELLATE JURISDICTION
PUBLIC INTEREST LITIGATION NO.144 OF 2018
ACELEGAL & Anr. ] … Petitioners
Versus
Union of India & Anr. ] … Respondents
Ms. Ritika Agarwal a/w Ms. Deepti Jethva or Petitioners.
Mr. Anil Singh, ASG, a/w Mr. Sham V. Walve for Respondent No.2.
URS 1 of 4
::: Uploaded on – 25/03/2019 ::: Downloaded on – 25/03/2019 13:11:18 :::
2 902 & 901WP
334318
@ PIL 14418.
odt
CORAM :AKIL
KURESHI &
SARANG V. KOTWAL, JJ.
DATE :22
MARCH, 2019
P. C. :1.
These Petitions involve similar issues. The Petitioners
have challenged certain portion of the central action plan formulatedby the Central Board of Direct Taxes (‘CBDT’, for short). This
document contains Chapter 3 pertaining to litigation management.
This Chapter provides the target for Appeals to be disposed by the
Appellate Commissioner in expeditious manner. The clauses
contained in this Chapter lay down targets and norms to be achieved
within certain time.
2. The challenge of the Petitioners is in two parts. In the first
part, the Petitioners have challenged the directions issued by the
CBDT for disposal of certain number of Appeals of specified categories
within specified time. According to the Petitioners, these time limits
are artificially applied, are contrary to the statutory provisions and
also have the effect of making hurried orders by the Appellate
Commissioner.

3. The Petitioners’ second part of the challenge is to the
   following portion of the said Chapter :
   “Incentive for quality orders :
   (i) With a view to encourage quality work by CITs
   (A),additional credit of 2 units shall be allowed for
   each quality appellate order passed. The CIT (A) may
   claim such credit by reporting such orders in their
   monthly DO letter to the CCIT concerned. Quality
   cases would include cases where (
   a) enhancement has been made,
   (b) order has been strengthened, in the opinion of the
   CCID, and
   (c) penalty u/s 271(1) has been levied by the CIT (A).”
   4. With respect to the first part, we are primafacie
   of the
   opinion that the target set by the CBDT for disposal of the Appeals
   within the timeframe
   provided, are directory and not mandatory.
   Primafacie,
   we also feel that it may not be impermissible for the
   CBDT to prioritize the disposal of the Appeals and to set the goals for
   disposal of certain number of such Appeals by the Appellate
   Commissioner.
   5. With respect to the Petitioners’ second part of the
   challenge, we are of the opinion that the CBDT should reconsider the
   same. From the action plan, it is not clear as to the utility of the
   URS 3 of 4
   ::: Uploaded on – 25/03/2019 ::: Downloaded on – 25/03/2019 13:11:18 :::
   4 902 & 901WP
   334318
   @ PIL 14418.
   odt
   norms set which the Commissioner has to achieve. If the purpose of
   setting of norms is to evaluate the performance of the Commissioner,
   there would be all the more reason why the abovequoted
   portion of
   the action plan be reconsidered by the CBDT.
   6. On the next date of hearing, the learned Counsel for the
   Respondent would apprise us about the utility of the norms that the
   Commissioner would need to achieve and the outcome of the CBDT’s
   deliberations on our recommendation for reconsideration.
   7. Stand over to 11/04/2019.
   (SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)