Supreme Court Surprised At 4-Year Delay By Income Tax Department In Filing Appeals; Asks About Action Against Officials

Taking serious note of the gross delay of over four years on the part of the Income Tax Department in filing statutory appeals before the High Court, the Supreme Court has called for an affidavit from the concerned officer to explain the inquiry made and action taken regarding the delay."...we direct that the concerned authority to file an affidavit before this Court explaining as to what inquiry has been made or action has been taken vis-a-vis the gross delay of four years and hundred days in filing the appeals before the High Court," observed a bench comprising Justices BV Nagarathna and Sanjay Karol.It was held by the Income Tax Appellate Tribunal that the inter-connection usage charges paid to Foreign Telecom Operator(s) are neither 'Royalty' nor 'Fees' for Technical Services. Assailing the order passed by the ITAT, the Commissioner of Income Tax(International Taxation) filed an appeal before the Delhi High Court with a delay of 1560 days. Upon failure to explain the delay caused while preferring an appeal on the part of the department, the High Court dismissed the appeal on the ground of limitation. Assailing the order of the High Court, the department preferred a Special Leave Petition (Civil) before the Supreme Court. The Supreme Court expressed anguish with the department for not explaining the reasons for the huge delay caused while preferring appeal. The Court noted that three other appeals from the common order were also dismissed by the High Court on the ground of long delay. The Supreme Court also dismissed the Special Leave Petitions arising out of those appeals.Since those connected SLPs were dismissed, the fate of the present SLP can also be no different, the Court said. However, instead of merely dismissing the SLP, the Court decided to pursue the matter to ascertain the action taken by the Department. “But what we find curious is that the Department instead of seeking to ascertain the reasons for there being over four years' delay in filing the appeals under Section 260A of the Act has simply sought to get the imprimatur of this Court on the impugned order of the High Court.”, the Bench of Justices B.V. Nagarathna and Sanjay Karol observed.According to Section 260A of the Income Tax Act, Appeals from orders of ITAT must be filed within a period of 120 days from the date on which ITAT order is received by the Assessee or Revenue. The Court granted three weeks' time to the department to explain the delay caused while preferring an appeal before the High Court. “Prima facie this special leave petition(s) may also have to meet the same fate, as other cases dismissed by this Court but however, pending passing of such an order, we direct the concerned officer to file an affidavit within a period of three weeks from today.”, the Court noted.

Supreme Court Surprised At 4-Year Delay By Income Tax Department In Filing Appeals; Asks About Action Against Officials

Yash Mittal

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