ITAT furiously Criticizes Revenue Department, Fine Imposed [Read Order]

In the ITO vs Chandigarh Lawn Tennis, the Chandigarh Bench of Income Tax Appellate Tribunal ( ITAT ) furiously criticized the Revenue Department for their open defiance and disrespect to the Tribunal. The Revenue was directed to pay an amount of Rs. 20,000/- to the Prime Minister’s Relief Fund.

The vehement act of the Tribunal was while considering an application filed by the Revenue for the vacation of interim stay orders dated 15^th February 2017 and 28^th April 2017. This application was a result of stay pleaded by the assessee while he has appealed against the orders of the Assessing Officer and the CIT(A). The Tribunal had granted the stay until the matter is heard and further orders are passed. Meanwhile, during the pendency of the stay, the Assessing Officer (A.O.) attached the bank account of the assessee and recovered the outstanding demand. Thereafter, aggrieved the assessee filed a Misc. application and the tribunal on founding that the recovery was made in contravention of an express stay, ordered the A.O. to refund the amount illegally recovered and to give an explanation. The A.O. complied with the order of refunding the recovered amount, but no explanation was given.

The hearing of the appeal, as well as the application for the stay, was delayed due to subsequent requests of the Departmental Counsel citing various reasons. Each adjournment order also contained a direction to maintain the status quo. The hearing took place on 22^nd March 2018 and the case had been reserved for orders. However, the application moved by the AO for the vacation of interim orders dated 15.2.2017 and 28.4.2017 was not fixed along with the main appeal but separately and came for final hearing on 23^rd March 2018 i.e. the next day after the conclusion of arguments on the main appeal.

The Departmental Representative strongly insisted on for hearing the application for vacation of stay despite the Bench informed him that such hearing would not bear any useful purpose and that the main appeal had already been heard and that the stay application would automatically become infructuous on the decision on the main appeal. On the insistence of the D.R the Bench considered the application for vacation of stay.

The bench comprising of Judicial Member Sanjay Garg and Accountant Member Annapurna Gupta said that the Department has been recently violating the stay orders of the Tribunal or come with application for vacation of the interim stay orders despite the fact that it was the Departmental Representatives themselves making the requests for adjournments. The Court noted that the only explanation regarding the violation of stay they had to offer was – “March 31^st is approaching”- as they have to meet their targets of tax collection. The Court condemned the conduct of the officers and warned against their open resentment towards the judicial orders.

“we are of the view that the department has chosen to file and contest the preset application fully knowing that the same is frivolous, infructuous, not maintainable and in fact redundant with the only motive to openly show resentment against the passing of stay orders by the Tribunal, instead of challenging the same before the higher judicial authorities. This application is therefore dismissed with costs of Rs. 20,000/- to be deposited in Prime Minister’s Relief fund within 15 days of receipt of the copy of this order. While ordering so, we are cautious that it will not result into any loss to the Govt. Exchequer but the movement of some funds from one branch of the Govt. to the other perhaps will convey the message of caution to the concerned officials. However, keeping judicial restraint, no contempt of court proceedings recommended at this stage. “ordered the bench.