Commissioner of Income Tax vs Bal Bharti Public School

The Registry has informed that during the last week from 26-4-2008 to 2-5-2008, the revenue has filed as many as 117 appeals in this Court from the orders passed by the Income Tax Appellate Tribunal. This works out to more than 20 appeals per working day.

We have repeatedly mentioned on earlier occasions that the revenue is filing a very large number of appeals involving petty amounts with the result that it is becoming difficult for the court to deal with matters which are complex or which involve larger amounts.

The Central Board of Direct Taxes has issued Instruction No. 5/2007 in which it is mentioned that ordinarily appeals should not be filed where the tax effect is less than Rs. 4 lakhs. Despite that, the present appeal has been filed where the cumulative tax effect for several appeals is well below Rs. 4 lakhs.

In our view, since the amount is quite low and the revenue is indulging in unnecessary litigation at the expense of the tax payer, this has to curtail somehow or the other otherwise the tax payers money is being frittered away by the Income Tax department. In the past, we have imposed costs of Rs. 5,000 on such frivolous appeals but obviously that has had no impact on the Income Tax department.

Under the circumstances, we dismiss this appeal since no substantial a question of law arises with costs of Rs. 10,000. The amount be deposited by cheque drawn in favour of the Registrar General of this Court within two weeks from today.