In a recent decision the Allahabad High Court observed that the Creation of cadre of officers for Commissioner of Income Tax (Appeals) (CIT (A)) not mandatory scheme of the Income Tax Act, 1961 and dismissed the challenge on appointment of the Commissioner of Income Tax (Appeals) (CIT (A)).
The Petitioner, Shweta Punj, is an income tax assessee and has challenged the assessment orders passed against her in writ. It is not in issue that the order of assessment is subject to appeal under the Income Tax Act and that such an appeal in fact has been preferred which is pending, yet the writ petition is pressed on the ground that the appellate authority since is not available in accordance with the statute.
An appeal lies against the order of assessment by virtue of Section 246A of the Income Tax Act. The language employed in Section 246A of the Income Tax Act is that any assessee aggrieved by any of the orders stipulated in the section can prefer an appeal to the Commissioner (Appeals). It is under this provision of the statute that the appeals are filed against the orders of assessment, as has been done by the present petitioner.
Section 117 of the Income Tax Act provides that Central Government may appoint such persons as it thinks fit to be income tax authorities. Sub-clause (c) of Section 116 of the Income Tax Act refers to a set of income tax authorities, namely, Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-tax (Appeals). From the statutory scheme, it is thus apparent that Central Government can appoint persons as income tax authorities which includes the Commissioners of Income-tax (Appeals). It is not in issue that Central Government has appointed officers as Commissioners of Income-tax (Appeals) in various offices of the department.
The primary submission of the petitioner is that in fact no such Cogmmissioners of Income-tax (Appeals) have been appointed, inasmuch as the Income Tax Act contemplates creation of a separate cadre for Commissioners of Income-tax (Appeals), which has so far not been constituted/created and therefore, the appointment of Commissioner of Income-tax (Appeals) is not in accordance with law.
A Division Bench comprising of Justices Ashwani Kumar Mishra and Syed Aftab Husain Rizvi observed that “The appointment of Commissioner of Income-tax (Appeals) is regulated by the provisions of the Income Tax Act and procedure for appointment of Joint Secretary to the Government of India would not get attracted by an ingenious process of reasoning unless there is a specific provision in law to indicate so. We do not find any such stipulation in the Income Tax Act, requiring grant of approval to the appointment of Commissioner of Income-tax (Appeals) by the Appointment Committee of the Cabinet. Even creation of a separate cadre of officers for Commissioner of Income-tax (Appeals) does not appear to be essential or mandatory in the scheme of the Income Tax Act.”
“We find that the statute, i.e. the Income Tax Act is a self contained code which clearly vests jurisdiction with the Central Government to appoint such persons as it thinks fit to be income tax authorities as are specified in Section 116 of the Income Tax Act. The income tax authorities clearly include Commissioners of Income-tax (Appeals) and, therefore, the Central Government would have the jurisdiction to appoint an officer as Commissioner of Income-tax (Appeals). Officers belonging to the cadre of Indian Revenue Services have been appointed as Commissioner of Income-tax (Appeals)” the Court said.
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