'Seems Tax Department Has Not Trusted Even Its Lawyers' : Supreme Court Flags Procedural Delays In IT Dept's Petition Filings

The Supreme Court recently criticised the Income Tax Department for filing its Special Leave Petition after a delay of 524 days, observing that the Department, despite having an entire team of legal experts, failed to act on its own lawyers' advice and instead allowed time to be wasted in unnecessary and prolonged litigation. A bench comprising Justices Pankaj Mithal and Prasanna B. Varale expressed strong dissatisfaction with the Department's explanation for the massive delay, noting that "no one in the Department is taking care to shorten the process" for filing appeals within the statutory timeframe. The Special Leave Petition (Civil) filed by the Commissioner of Income Tax (Exemptions), arose from a judgment of the Telangana High Court dated October 12, 2023. The Department's petition, however, only reached the Supreme Court after a delay of over one and a half years. The Court found the Department's internal procedures, to be the root cause of the delay. It said even after becoming aware of the High Court's judgment, the Department did not immediately move to file an appeal. Instead, it first called for a scrutiny report, and then a second scrutiny report. As time passed, it then called for an explanation for the delay that had already occurred. “The said details would indicate that despite the knowledge of the impugned order instead of directing for the filing of the special leave petition, the petitioner called for scrutiny report. When the scrutiny report was submitted, a second scrutiny report was called for. Thereafter, since the matter had been delayed, the explanation was called as to why the delay had occurred. Then the papers were submitted to the Panel Counsel for drafting the special leave petition. Once the petition was drafted, it was sent for vetting not only once, but thrice. Once the vetting was completed, it was again marked to the Panel Lawyer for drafting the application for condonation of delay.”, the court inferred from the explanation provided by the petitioner-department. Being unsatisfied with the explanation, the Court observed “the entire process, as explained in the above paragraph, indicates that the petitioner has followed a long process of filing the special leave petition despite being aware of the fact that the petition has to be filed within the specified timeframe. No one in the Department is taking care to shorten the process of filing the petition so that the special leave petitions may be filed within time. This is despite the fact that the Department has a team of legal experts to advice and to take necessary action. It appears that the Department has not trusted even upon its lawyers.” However, noting that certain other matters on a similar point have already been entertained, the Court decided to condone the delay in filing and refiling the special leave petition as a special case. The Court directed that its order be communicated to the concerned Commissioner of Income Tax and other senior officials of the Department, emphasising the need for corrective measures to ensure that such instances of excessively delayed filings do not occur in the future. Cause Title: THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) VERSUS THE HYDERABAD CRICKET ASSOCIATION, HYDERABAD Click here to download order

'Seems Tax Department Has Not Trusted Even Its Lawyers' : Supreme Court Flags Procedural Delays In IT Dept's Petition Filings

Yash Mittal

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