CBDT’s Central Action Plan encouraging CIT(A) to pass revenue favoring orders set aside by HC

CBDT’s Central Action Plan encouraging CIT(A) to pass revenue favoring orders set aside by HC

The Order is given below for reference:

1. Heard learned Counsel for the parties for final disposal of the Petitions.

2. The grievances of the Writ Petitioners and the Public Interest Litigation Petitioners substantially overlap. We may record brief facts. The Writ Petition is filed by the Association of Tax Consultants and its office bearers. They have challenged a portion of “Central Action Plan” (hereinafter referred to as ‘the said plan’) prepared by Central Board of Direct Tax (for short ‘CBDT’) for the financial year 2018­2019. We shall take a detail note of the relevant provisions contained in this plan later. For the moment we may note that this plan contains various provisions made by CBDT setting out targets of tax collection, disposal of cases by income tax authorities and for awarding points for such disposals. The grievances of the Petitioners relate to two areas of this plan. Petitioner’s first grievance is in respect of time line set and the directions to the Commissioner (Appeals) for deciding appeals within such time. According to Petitioners such targets and time limits would put unnatural pressure on the Commissioner to decide the cases in a hasty manner, which has every possibility of denying a fair hearing to the assessee. Second area of the Petitioners’ grievance is with respect to allocation of units for disposal of what has been referred to as “quality orders”. The Petitioners would point out that these quality orders are those which result in favour of the department. According to Petitioners granting more weightage to such orders, would have the possibility of influencing the outcome of the Appeals before the Appellate authorities.

3. The Petitioners of the Public Interest Litigation have also challenged the same plan. The challenge however is confined to the portion of the plan, where the CIT Appeals have been given higher weightage for disposal of Appeals by quality orders.

4. The CBDT has framed the said plan for the financial year 2018­2019. The preamble of this document sets out the purpose for framing the said plan and reads as under; “The Vision 2020 document adopted by the Income­tax Department envisages an efficient and effective tax administration, progressive tax policy and improved tax compliance. The Action Plan 2018­19 must work towards accomplishing this vision. The Action Plan for 2017­18 was a comprehensively re­modeled plan that sought to address all the current priorities in a holistic manner. It laid special emphasis on a number of critical areas such as litigation management, improving quality in diverse areas of work and strengthening compliance and enforcement functions. The plan worked well and resulted in enhanced levels of performance in all functions across the board. This Action Plan for 2018­19 retains the broad structure of the plan for 2017­18 and seeks to consolidate the achievements made, while re­ emphasising priorities within the framework of the overall Vision. A new chapter on Widening of Tax Base has been added, so as to highlight the critical importance of this area. The Chapter on Audit has been omitted, since the CITs(Audit) are already functioning under instructions and SOPs formulated by the Directorate of Income­tax (Audit and Inspections). The separate chapter on Prosecution and Compounding has been omitted and the relevant targets, in consolidated form, have been incorporated in the Chapter on Assessment Units (prosecution targets for TDS units already form part of the Chapter on TDS). Targets in various key result areas have been re­calibrated in the light of experience gained.”

5. Chapter I of the plan sets out targets for tax collection. It contains goals for major head wise direct tax collection for the financial year 2018­19. Such targets are broken up region wise, keeping in view revenue potential of the region. Chapter III of the plan pertains to Litigation Management. The Petitioners’ challenge flows from this chapter. The relevant portion of this chapter reads as under;

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