High Court imposes costs of Rs. 50,000 on AO for filing frivolous appeal & wasting public money & judicial time

CIT vs. Sairang Developers and Promoters Pvt.Ltd (Bombay High Court)

Though the Bench clearly indicated to the department’s counsel that the appeal had no merit and gave the department an opportunity to withdraw, the department did not do so. HELD by the High Court, passing strictures and imposing costs:

“We do not find how Officers lower down in the hierarchy can take decisions to file Appeals and that too against the decision of the Tribunal. The tendency not to accept any adverse verdict on facts results in frivolous Appeals being filed in this Court. That causes huge loss to the public exchequer and results in wastage of precious judicial time of this Court. All this ought to have been discouraged long time back. The High Court has not adopted a strict approach and that has possibly encouraged the Revenue in filing Appeals to challenge essentially findings of fact and with regard to matters which should stand concluded at the level of the authorities. The officials should realize that the authorities like CIT(A) and the ITAT are envisaged as appellate and possibly final fact finding authorities and at least the Tribunal is last in that hierarchy. The fact finding therefore if demonstrably perverse or palpably erroneous and as would amount to unsettling the settled position in law alone should be questioned by filing Appeals to this Court. However, a routine exercise and by people who do not wish to take any responsibility, results in number of Appeals being filed and pending. This benefits no one and rather defeats larger public interest. The Revenue collection and equally the participation of the assessee in the exercise undertaken by the authorities to assess their income, therefore is affected adversely. None takes a position or decision because of pendency of matters and for a long time. In these circumstances, while dismissing this Appeal, we impose costs quantified at Rs.50,000/. The costs be paid to the assessee within four weeks from today. We at least now expect the authorities to take cognizance and initiate proceedings for recovery of this amount personally from such of the Officers who do not take decisions or postpone them endlessly. A copy of this order be forwarded to the CIT Pune. It should also be forwarded to the Chief CIT, Pune who may decide as to who should pay the costs personally as between them or anybody else who has brought about this situation.”