Punjab and Haryana High Court mandates timely disposal of income tax appeals

Taking note of a “considerable number” of writ petitions filed for expeditious disposal of appeals under the Income Tax Act, the Punjab and Haryana High Court has called for strict adherence to one-year limit. The bench made it clear that inordinate delay in adjudication at the appellate level defeated the objective of Income Tax Act’s provision dealing with procedure prescribed for appeals.

“Considering that substantial amount of revenue is involved in these appeals, and that such amount remain blocked during the pendency of the proceedings, it is imperative that the appellate authorities should endeavour to dispose of the appeals, preferably within one year as per the provisions of the Act,” the division bench of Justice Arun Palli and Justice Sudeepti Sharma asserted.

The ruling came in a case where an appeal filed against assessment order remained pending for almost five years with no progress in the proceedings.

“The present writ petition is yet another instance where the petitioner filed the appeal in 2020 i.e. five years back and till date, there is no progress,” the bench asserted.

Referring to Section 250 of the Income Tax Act dealing with the procedure to be followed in appeals, the bench asserted: “A bare perusal of the provision shows the intention of the legislature. It has been specifically mentioned that in every appeal, the Joint Commissioner (Appeals) or the Commissioner (Appeals) – as the case may be – where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him.”

The court added that the expression “where it is possible” had been used. But legislature’s intent unequivocally was in favour of time bound disposal of appeals. “In cases, where disposal within this period is not done, the reasons for such delay must be explicitly recorded in the zimni orders, so as to reflect whether the delay is attributable to the assessee or the department/revenue. Then also efforts should be made to decide the appeals maximum within a period of two years,” the bench asserted.

The court also referred to an earlier order where directions were issued to dispose of within six months an appeal pending for nearly a decade. Disposing of the plea, the bench asked the Commissioner of Income Tax-3 (Appeals) to decide the appeal within three months.

The bench also directed the forwarding of its order to the Union of India, the Central Board of Direct Taxes, the Commissioner of Income Tax-3 (Appeals), the Assistant Commissioner of Income Tax, and the Principal Commissioner of Income Tax (Central) for necessary compliance.