FOR DEPARTMENTAL USE ONLY

HAND BOOK ON
JUDICIAL
MATTERS

Principal Commissioner of Income Tax, (Judicial)

Aayakar Bhavan, Maharshi Karve Road, New Marine
Lines,Mumbai – 400020
 HAND BOOK ON
JUDICIAL MATTERS

O/o Principal Commissioner of Income Tax, (Judicial)

Aayakar Bhavan,
Maharshi Karve Road, New Marine Lines,
Mumbai – 400020
ii
GUIDANCE -
MR. SANDEEP DAHIYA
Pr. Commissioner of Income Tax(Judicial)-1

MR. AJAY KUMAR SHARMA

Pr. Commissioner of Income Tax(Judicial)-2

MR. SANJEEV KASHYAP

Commissioner of Income Tax(TDS)

EDITORS - MR. B. ARUN

Joint Commissioner of Income Tax(Judicial)

DR. B. BRAHMA VIDHYA

Joint Commissioner of Income Tax(Judicial)

MRS. LEKHA S. NAIR

Deputy Commissioner of Income Tax(Judicial)
ASSISTANCE

MRS. NIMISHA D. PARIKH

Income Tax Officer

MRS. CHHAYA M. SONKUSALE

Adminis trative Officer

MRS. SNEHALATA M. DIXIT

Private Secretary

MRS. SHILPA R. DALVI

Inspector

MR. PRATIK S. MISAL

Inspector

MR. KRISHNA KUMAR MEENA

Inspector

MS. SRISHTI VATSAL

Stenographer

iii
 CONTENTS AT A GLANCE

PART - A Income Tax Appellate Tribunal (ITAT)

Chapter-I Functions of ITAT and Issues related to presentation before ITAT...................1

Appeals to ITAT.................................................................................................5

Chapter-III E-Filing of Appeal in ITAT and Check List ....................................................11

PART - B HIGH COURT

Chapter-I Filing of Appeal in the High Court....................................................................15

Chapter-II Monetary limits for filing Appeal in HC..........................................................20

Chapter-III E-Filing of Appeals...........................................................................................24

Chapter-IV Removal of Objections in the Appeals .............................................................30

Chapter-V Hearing of Appeal and Passing of Order..........................................................32

Chapter-VI Engagement of Counsels and ASG ..................................................................35

Chapter-VII IAMS Portal......................................................................................................37

Chapter-VIII Section 158AA and Section 158AB..................................................................46

PART – C WRIT PETITION

Chapter-I Writ Petition......................................................................................................50

Chapter-II Filing of Writ Petition......................................................................................52

Chapter-III Procedure of Handling Writ Petitions...............................................................53

Chapter-IV Action taken after disposal of Writ Petition........................................................60

PART – D PROSECUTION

Chapter-I Prosecution......................................................................................................61

Chapter-II Launching Prosecution......................................................................................63

Chapter-III Important Aspect in the Preparation of Complaint...........................................68

Chapter-IV Offences under various other Acts.....................................................................71

Chapter-V IPMS Portal.......................................................................................................75

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 HAND BOOK ON JUDICIAL MATTERS

PART – E National Company Law Tribunal and National Company Law

Appellate Tribunal (NCLT & NCLAT)

Chapter-I National Company Law Tribunal and National Company

Law Appellate Tribunal (NCLT & NCLAT)....................................................77

Chapter-II Merger & Acquisition in the light of Income Tax Act, 1961............................83

Chapter-III Important Points to Consider in Merger/ Amalgamation cases.........................89

Chapter-IV Insolvency and Bankruptcy Code, 2016............................................................95

PART – F SPECIAL LEAVE PETITION (SLP)

Chapter-I Special Leave Petition......................................................................................110

Chapter-II Filing of SLP...................................................................................................112

Chapter-III Important Points for SLP Proposals................................................................113

Chapter-IV Checklist and Steps relating to SLP.................................................................116

v
 TABLE OF CONTENTS

PART – A Income Tax Appellate Tribunal (ITAT)

Sr. No. Contents
Chapter-I Functions of ITAT and Issues related to
Representation before ITAT
i. Introduction
ii. Pre-requisite for filing Appeal before ITAT
iii. Timelines for filing Appeals to ITAT
iv. Constitution and Departmental Setup in ITAT
v. Benches of ITAT
vi. Appellate proceedings before ITAT
vii. Powers & Limitations of ITAT
viii. Issues of Presentation before ITAT

Chapter-II Appeals to ITAT

i. Mandate of ITAT
ii. Departmental Appeals: Commissioner’s Authority
and Tax Threshold
iii. Time limit for presenting appeal
iv. Form and Signature Requirements
v. Memorandum of Cross Objections
vi. Documents to be submitted with appeal
vii. Submission of paper book
viii. Hearing of the appeal by the ITAT
ix. Filing of additional evidence
x. Order of the ITAT
xi. Stay application
xii. Rectification of Appellate Order u/s 254(2) of the
IT Act
xiii. Faceless Proceedings before ITAT

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 HAND BOOK ON JUDICIAL MATTERS

Chapter-III E-Filing of Appeal in ITAT and Check List

i. Note for e-filing in the ITAT
ii. E-Filing Procedure
iii. Checklist for e-filing

PART - B HIGH COURT

Sr. No. Contents

Chapter-I Filing of Appeals in the High Court

i. Appeal to High Court
ii. Procedure for Appeals
iii. Stages for Hearing of Appeals
iv. Case before High Court to be heard by not less than two
judges
v. Meaning of Substantial Question of Law
vi. Filing fee
vii. No Abatement of Appeal

Chapter-II Monetary limits for filing Appeals in HC

i. Circular No. 3 of 2018, dated 11.07.2018
ii. Circular No. 5/2024 dated March 15, 2024
iii. Scenarios of applicability of Monetary Limit u/s 158AB

Chapter-III E-Filing of Appeal

i. Steps for filing of appeal u/s 260A of the Act in High Court
by Counsel

Chapter-IV Removal of Objections in Appeals

i. Removal of Objections
ii. Common objections raised by the Registry

Chapter-V Hearing of Appeal and Passing of Order

i. Hearing of Appeal and Passing of Order by the High Court
ii. Procedure after disposal of the case

vii
Chapter-VI Engagement of Counsels and ASG
i. Appointment/Renewal of Standing counsels of
ii. IT Department before various High Court
iii. Contingencies arising during the pendency of appeals

Chapter-VII IAMS Portal

i. Key features of IAMS

Chapter-VIII Section 158AA and Section 158AB

i. Section 158AA and Section 158AB
ii. Amendment of section 158AA
iii. Explaining of the provisions of section 158AA and 158AB

PART – C WRIT PETITION

Sr. No. Contents

Chapter-I WRIT PETITION

i. Introduction
ii. Importance of Writ Petition
iii. Difference between Writ and Writ Petition
iv. Difference between a Writ Petition, an appeal and a PIL
v. Writ in Mandamus

Chapter-II Filing of Writ Petition

i. Circumstances under which a Writ Petition can be filed
ii. Provision of the law under which a Writ is filed
iii. Time limit for filing a Writ Petition

Chapter-III Procedure of Handling Writ Petitions

i. Importance
ii. SOPs/Instructions regarding Writ Petitions
iii. Common issues noticed in Handling of Writ Petitions
iv. Steps to be taken when a Writ Petition is Received

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 HAND BOOK ON JUDICIAL MATTERS

Chapter-IV Action taken after disposal of Writ Petition

i. Dismissal of the Writ Petitions
ii. Set Aside Directions
iii. Petition being allowed

PART – D PROSECUTION

Sr. No. Contents

Chapter-I PROSECUTION
i. Introduction

ii. Offences liable to prosecution

iii. Sections relating to prosecution

Chapter-II LAUNCHING PROSECUTION

i. General issues relevant to procedure for launching prosecution
ii. Procedure for launching of Prosecution

Chapter-III Important Aspect in the Preparation of Complaint

i. Important Aspect in the Preparation of Complaint

ii. Custody of Records and Evidence Relating to Prosecution

iii. Publicity of Convicted Cases

Chapter-IV Offences under various other Acts

i. Prosecution provisions under the Black Money and Imposition of
Tax Act, 2015
ii. Prosecution provisions under the Prohibition of Benami Property
Transaction Act, 1988
iii. Comparative chart of prosecution under I.T Act vis-à-vis Black
Money Act & Benami Act

Chapter-V IPMS PORTAL

i. Integrated Prosecution Management System (IPMS)

ix
PART – E National Company Law Tribunal (NCLT) and
National Company Law Appellate Tribunal
(NCLAT)

Sr. No. Contents

Chapter-I National Company Law Tribunal and

National Company Law Appellate Tribunal
(NCLT& NCLAT).
i. Introduction
ii. Territorial Jurisdiction of NCLT
iii. Subject matter Jurisdiction of NCLAT

Chapter – II Merger & Acquisition in the light of Income

Tax Act, 1961
i. Introduction
ii. Different Cases of Corporate Restructuring and their Tax Issues

Chapter-III Important Points the consideration in Merger/

Amalgamation cases
i. Important Points to consider in Merger/Amalgamation cases
ii. Lodging of caveat before NCLT

Chapter-IV Insolvency and Bankruptcy Code, 2016

i. Introduction to the Insolvency and Bankruptcy Code, 2016
ii. Applicability of the Insolvency and Bankruptcy Code, 2016
iii. Insolvency Process under the IBC
iv. Moratorium under IBC and Tax Proceedings
v. Action points for Assessing Officers during the Corporate Insolvency
Resolution Process (CIRP):

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 HAND BOOK ON JUDICIAL MATTERS

PART – F SPECIAL LEAVE PETITION (SLP)

Sr. No. Contents

Chapter-I SPECIAL LEAVE PETITION

i. Introduction
ii. Scope of Article 136
iii. Applicability of a SLP
iv. Rules for filing SLP
v. Time Frame for filing SLP

Chapter-II Filing of SLP

i. Requirements for filing a SLP
ii. Pre-requisite for filing SLP

Chapter-III Important Points for SLP Proposals

i. Points to be taken into Consideration for SLP Proposals

Chapter-IV Checklist and Steps relating to SLP

i. Checklist
ii. Steps for sending SLP Proposal through E-Office
iii. SLP E-Office File Movement
iv. Proforma B Utility

xi
 LIST OF ANNEXURES

Instructions regarding Standard Operating Procedure on filing of

appeals to the ITAT under section 253 and related matters.
ANNEXURE B1: CIR. CIR.NO.8/2023 Revision of exceptions to monetary limits for
NO.8/2023 dated 31.05.2023 filing appeals deferred under provisions of section 158AB dtd.
31.05.2023.
ANNEXURE B2: Cir. In supersession of all earlier Circulars, the Board has vide this
No.F.No.279/Misc.142/2007/ Circular amended the exceptions to filing appeals in all judicial
ITJ(PT) dated 15.3.2024 fora.
(Circular No 5/2024):

ANNEXURE B3: Revision of the Guidelines for engagement of standing counsels

INSTRUCTION 7/2016 to represent the income-tax department before high court and
other judicial forums; revision of their schedule of fees and
related matters
ANNEXURE B4: CBDT Engagement of Additional Solicitor General (ASG). To represent
LETTER NO. F. NO.278/M- the income-tax department before High Court and other judicial
23/2021-ITJ DATED 9TH forums; revision of their schedule of fees and related matters
JUNE, 2021

ANNEXURE B5: THE Revised Guidelines – Appointment of Special Counsels to

CBDT LETTER NO. F. NO. represent Income Tax Department before Courts and Tribunals
278/MISC/ M-23/2021-ITJ
DATED 18TH AUGUST,
2021
ANNEXURE B6: List of Standing Counsels empaneled by the Department to
CONTACT LIST OF represent before Bombay High Court.
COUNSELS DATED
31.03.2024.
ANNEXURE B7: No. 272/ Non-removal/ delay in removal of defects of pending appeals
M-26/2015(ITJ)] DATED before Hon’ble High Courts
07.12.2018.

ANNEXURE C1: INS.NO. Instructions regarding s tandard operating procedure on filing of

7/2011[F.NO.279 /MISC. appeals to the High Court under section 260A and related matters.
/M-42/2011-ITJ], dtd:
24.05.2011
ANNEXURE C2: F.NO.CIT Standard Operating Procedure (SOP) for handling Writ Petitions
(NaFAC)-1/58/2021-22/333 where assessment is made under the Faceless Assessment
DATED 26.07.2021. Scheme 2019 (FAS,19)/section 144B of the IT Act, 1961(the
Act) and or penalty is passed under Faceless Penalty Scheme
(FPS), 2021, where NaFAC/CBDT is one of the respondents.

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 HAND BOOK ON JUDICIAL MATTERS

ANNEXURE C3: F.NO. Standard Operating Procedure (SOP) for handling Writ Petitions
NaFAC/Delhi/CIT-3/2022- against assessment proceedings conducted under section 144B of
23/339/76 DATED the IT Act, 1961 or penalty proceedings under Faceless Penalty
01.08.2022 Scheme (FPS), 2021.

ANNEXURE D1: Procedure for identification and processing of cases for

CIRCULAR NO.24/2019 [F. prosecution under Direct Tax Laws-reg.
No. 285/08/2014- IT (INV.
V)/349] DATED 09-09-2019

ANNEXURE D2: Section 276C, Read with Sections 276B, 276BB, 276CC Of the
CIRCULAR NO. 5/2020 [F. Income-Tax Act, 1961 -Offences And Prosecution - Willful
NO. 285/08/2014-IT Attempt To Evade Tax, Etc. - Procedure For Identification and
(INV.V)/712], DATED 23- Processing of Cases For Prosecution Under Direct Tax Laws -
01-2020 Amendment In Circular No. 24/2019 [F.No.
285/08/2014-IT(Inv.V)/349], Dated 09-09-2019.

ANNEXURE D3: Instruction Guidelines for engagement of Special Public Prosecutors (SPPs)
No. 6/2016 [F.No. 279/Misc./ to represent the Income Tax Department before Courts of Session
M-77/2011-ITJ] DATED 07- and its subordinate Courts; revision of their schedule of fees and
09-2016 related matters-instructions regarding.

ANNEXURE D4: [F.No. Modifications to the Instruction No. 6/2016 for engagement of
279/Misc./M-77/2011-ITJ] Special Public Prosecutors (SPPs) to represent the Income Tax
DATED 18-10-2016 Department before Courts of Session and its subordinate courts-
regarding.

ANNEXURE E1: Proforma Format for Presentation of Caveat before NCLT

ANNEXURE E2: Form B Proof of Claim by Operational Creditors except Workmen

and Employees.

ANNEXURE E3: Form C-Proof of Claim by Financial Creditors to be filed before

NCLT.

ANNEXURE F1: Standard Operating Procedure on filing of Appeals/Special Leave

INSTRUCTION NO. 2/2022 Petitions (SLPs) by the Income Tax Department in the Supreme
[F.NO.279/ Court and related matters
MISC./M-72/2022-ITJ]

Annexure F2: F. No. DDIT Submission of Deficiency-Free SLP Proposals on E office for
(L&R) HQ/ /2024-25/02 Timely Processing-reg
dated 21.05.2024

xiii
 DISCLAIMER

• Hand book on Judicial Matters is intended only to be a reference book and it cannot be a
substitute for Acts, Rules, Orders, Instructions, etc. of various authorities.

• We have taken every effort to provide accurate and updated information in the Hand book
on Judicial Matters. For any inadvertent error and omission or doubt, the Principal
Commissioner of Income Tax (Judicial) may be contacted for clarification.

• The statements in this Manual should not be construed as the final authority about any
provision of law. For the same, the actual text of a provision of law or a judgment or
Circular etc, which are quoted in this book, may be referred to.

• The Principal Commissioner of Income Tax (Judicial) welcomes suggestions on content

or form and inadvertent errors or omissions in this Manual for further improvement.

All rights reserved.

No part of this publication may be reproduced, distributed, or transmitted in any form or by any
means, including photocopying, recording, or other electronic or mechanical methods, for any
commercial use, or otherwise, without the prior written permission of Principal Commissioner of
Income Tax (Judicial), Mumbai.

xiv
 Chapter-I
FUNCTIONS OF ITAT AND ISSUES RELATED
TO REPRESENTATION BEFORE ITAT

1. Introduction: -
The Commissioner of Income Tax (Appeals) serves as the first appellate authority, while the Income
Tax Appellate Tribunal (ITAT) is the second appellate authority. Established in January 1941, the
ITAT is a quasi-judicial institution that specializes in handling appeals under the Direct Taxes Acts.
Both taxpayers and Assessing Officers can file appeals to the ITAT if they are dissatisfied with the
decision of the first appellate authority. The ITAT operates under the Ministry of Law and comprises
two types of members: Judicial members and Accountant members.

2. Pre-requisite for Filing Appeal before ITAT:-

1. Scrutiny Report: The Assessing Officer (AO) or Range Head must submit a scrutiny report
under Section 253 of the Act to the concerned Principal Commissioner of Income Tax
(PCIT), as per the Central Board of Direct Taxes (CBDT) Instruction No. 08/2011 [F NO.
279/MISC./M-43/2011-ITJ], dated August 11, 2011.
2. Tax Effect: Consider the tax effect for Income Tax and Wealth Tax cases, along with any
exceptions.
3. Framing Questions: Properly frame both question of fact and question of law.
4. Form No. 36: Ensure the correct completion and submission of Form No. 36.

3. Timelines for filing Appeals to ITAT: -

Sr. Number of
Stages Total Time
No. Days
1. Receipt of CIT(A)’s order in the office of Pr.CIT/CIT. 0 day 0 day
2. Sending the order to AO for necessary action along with a copy
5 days 5 days
to Range Head
3. Entry in the relevant regis ter and submission of scrutiny report
in prescribed proforma by AO to Range Head after giving appeal 25 days 30 days
effect.
4.
Submission of recommendation by Range Head on scrutiny
10 days 40 days
report to Pr.CIT/CIT along with draft grounds of appeal

5.
Decision making by the Pr.CIT/CIT including finalization of
7 days 47 days
grounds of appeal and sending the same to AO
6. Actual filing of appeal in ITAT by AO 6 days 53 days
7. Intimation of Diary/lodging to the office of Pr.CIT/CIT 2 days 55 days

1
4. Constitution & Departmental setup in ITAT: -
i. Registrar
ii. Judicial Members
iii. Accountant Members
iv. Vice Presidents
v. President

Departmental Setup.
i. CIT (DR) – CIT
ii. Sr. AR-JC/Addl. CIT
iii. ITO(HQ) to CIT(DR) or Sr. AR
iv. CIT (DR)(ITAT)(Admin.)
v. ITO (ITAT)(HQ)(Admin.)
vi. Inspectors
vii. OS/TA/MTS

5. Benches of ITAT: -
i. Two Member Bench:
a. Typically consists of one Judicial Member and one Accountant Member.
ii. Single Member Bench:
b. At least one bench headed by either a Judicial Member or an Accountant Member.
iii. Special Benches:
c. Constituted to decide issues with wider ramifications.
iv. Third Member Bench:
d. Formed when members of a division bench disagree on a particular issue.

6. Appellate Proceedings Before ITAT: -

i. Filing and Review:
The appellant files the appeal using Form No. 36, which is then reviewed by the Registrar
of ITAT. The Registrar checks for correctness, completeness, and ensures that all
required fees are paid. If any discrepancies are found, notices are issued to the appellant
for rectification.
ii. Communication:
Once the appeal is accepted for further processing, the Registrar sends an appeal memo
to the Respondent. At this stage, the Respondent has the option to file cross-objections
if deemed necessary.

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 HAND BOOK ON JUDICIAL MATTERS

iii. Hearing and Presentation:

Cases are listed in the cause list, and the proceedings are scheduled accordingly. During
the hearing, the appellant presents facts, arguments, and supporting evidence as outlined
in the paper book. Following this, the Respondent presents their rebuttal to the appellant’s
contentions.
iv. Order and Timeframe:
After the completion of arguments and evidence presentation, the Bench declares the
case as heard. From this point, the Bench has a mandate to pass an order within 90
days. If there are complexities or clarifications needed, the Bench may extend this
timeframe by an additional 30 days.
v. Resolution:
In cases where the members of the Bench are unable to reach a consensus or decision,
the matter may be referred to a third member for resolution. If the case is released, it
is listed for a fresh hearing before a new Bench to ensure a fair and thorough consideration
of the issues at hand. The third member conducts hearings and must pass an order
within 60 days of declaring the case as heard, with an option to extend this timeframe
to 90 days for thorough deliberation.

7. Powers & Limitations of ITAT:-

1. Case Handling:

- ITAT has the authority to hear cases and issue orders based on the merits presented.

2. Admission of Evidence:

- ITAT can admit additional evidence if reasons are recorded for doing so.

3. Fresh Assessments:

- ITAT can set aside orders for fresh assessment by the Assessing Officer, either entirely
(“de novo”) or regarding specific issues.

4. Review by CIT(A):

- ITAT can also set aside orders for a fresh decision by the CIT(A), either entirely or on
specific issues.

5. Mistake Correction:

- ITAT can correct mistakes apparent from the record based on applications from the
parties involved.

6. Limitation on Order Recalls:

- ITAT cannot recall orders that have been decided on their merits.

3
8. Issues of Presentation Before ITAT:-
Analysis of the order under scrutiny:

Whether it is combined order for more than one assessment years

I
If yes, specify assessment years involved and identify specific issues related to Yes/No
ii
different assessment years for filing separate appeals. Use Annexure, if required.

iii Whether it is combined order for more than one assessee group case? Yes/No

iv If yes, whether jurisdiction of all assessees falls in the same Range? Yes/No

If reply to (iv) above is no. identify the AO/Range CIT having jurisdiction over other
v
assessees for communication of stand taken on common issues?

If the proceedings of order under scrutiny were dependent on some other proceedings
(say order under section 263, set aside order, Registration under section 12A etc.),
vi
specify the present appellate status of the other proceedings along with ITA No./WP
No. etc.

Vii Whether any additional ground was admitted by the CIT(A)? Yes/No

If yes, whether the AO was intimated of the new grounds?

viii Yes/No

ix Whether any additional evidence was admitted by CIT(A)?

If yes, whether opportunity to AO was granted under Rule 46A to give comments or Yes/No
x
for countering the same? Yes/No

4
 Chapter-II
APPEALS TO ITAT

Appealable Orders to appeal by the Commissioner

Hearing of the appeal by the ITAT
Order of the ITAT
Disposal of Appeal Rectification of Appellate Order
Faceless Proceedings before ITAT

1. Mandate of ITAT:
ITAT is mandated to adjudicate appeals filed against orders of:

1. CIT(A) (Commissioner of Income Tax - Appeals)

2. DRP (Dispute Resolution Panel)
3. CIT/PCIT (Commissioner of Income Tax/Principal Commissioner of Income Tax)
under section 263 of the Act
4. CIT (Exemption) under section 12AA of the Act
5. PCIT (Principal Commissioner of Income Tax) under section 80G(5)(vi) of the Act
6. CCIT (Chief Commissioner of Income Tax) under section 10(23C)
7. Assessing Officer/PCIT disposing of stay petitions
8. Miscellaneous applications filed against ITAT orders

2. Departmental Appeals: Commissioner’s Authority and Tax threshold

If the Principal Commissioner of Income-Tax or Commissioner of Income-Tax disagrees with
the order passed by the Joint Commissioner of Income-tax (Appeals) or the Commissioner of
Income- Tax (Appeals) under section 154 or section 250, they may direct the Assessing Officer to
file an appeal to the ITAT against these orders. This type of appeal is known as a departmental
appeal, where the Income-Tax department challenges the order of the Joint Commissioner of
Income-tax (Appeals) or the Commissioner of Income-Tax (Appeals) at the ITAT level.

For such departmental appeals to be allowed, the tax effect involved in the appeal must exceed
Rs. 50,00,000. In other words, the Pr.Commissioner of Income-Tax can instruct the Assessing
Officer to file an appeal to the ITAT against the order of the Commissioner of Income-Tax
(Appeals) only in cases where the tax effect exceeds Rs. 50,00,000. Detailed guidelines and
exceptions regarding this provision are provided in Circular No. 17/2019, dated 08-08-2019, and
Circular No. 05/2024, dated 15.03.2024.
5
 The term “tax effect” refers to the difference between the tax on the total income assessed and
the tax that would have been chargeable if such total income were reduced by the amount related
to the disputed issues (“disputed Issues”). However, the tax effect does not include interest, except
when the chargeability of interest itself is in dispute. In such cases, the amount of interest becomes
the tax effect. If a returned loss is reduced or assessed as income, the tax effect includes notional
tax on disputed additions. For penalty orders, the tax effect refers to the quantum of penalty deleted
or reduced in the order being appealed against.
The Assessing Officer calculates the tax effect for each assessment year concerning the disputed
issues of every taxpayer separately. If the disputed issues arise in multiple assessment years for a
taxpayer, an appeal can be filed for those assessment years where the tax effect exceeds the specified
monetary limit. No appeal is filed by the department for assessment years where the tax effect is
below the monetary limit.
In essence, appeals filed by the Commissioner of Income-tax are now based on the tax effect in
the relevant assessment year. However, for composite orders involving multiple assessment years
and common issues, appeals are filed only for assessment years where the tax effect exceeds the
prescribed limits. If a composite order involves more than one taxpayer, each taxpayer is
considered separately.
Adverse judgments related to the following issues should be contested on merits even if the tax
effect involved is below the specified monetary limits or if there is no tax effect:

a. Constitutional Validity Challenge:

Cases challenging the constitutional validity of provisions in an Act or Rule.
b. Board’s Orders or Circulars:
Cases where Board’s orders, notifications, instructions, or circulars have been deemed
illegal or ultra vires.
c. Revenue Audit Objections:
Cases where Revenue Audit objections have been accepted by the Department.
d. Writ Matters:
Matters subject to writ petitions.
e. Other Direct Taxes:
Matters concerning other direct taxes apart from Income Tax.
f. Non-Quantifiable Tax Effects:
Cases where the tax effect is not quantifiable or not involved, such as the registration
of a trust or institution under section 12A.
g. Undisclosed Foreign Assets:
Cases involving additions related to undisclosed foreign assets or bank accounts.

3. Time- limit for presenting appeal -

An appeal to the ITAT must be filed within 60 days from the date on which the order sought to
be appealed against is communicated to the taxpayer, Principal Commissioner of Income-Tax, or

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 HAND BOOK ON JUDICIAL MATTERS

Commissioner of Income-Tax, depending on the case. However, the ITAT has the discretion to
admit an appeal even after the 60-day period if it is satisfied that there was a valid and sufficient
reason for not presenting the appeal within the prescribed time

4. Form and Signature Requirements:

The appeal to ITAT must be filed using Form No. 36. The form of appeal, grounds of appeal, and
verification must be signed by the person authorized to sign the return of income under section
140. Specifically:

i. For individual taxpayers, the appeal must be signed by the individual taxpayer or by
a person duly authorized with a valid power of attorney.
ii. For Hindu Undivided Families, the appeal must be signed by the Karta of the family.
If the Karta is absent from India or unable to sign, any other adult member of the family
may sign.
iii. For companies, the appeal must be signed by the Managing Director. If the Managing
Director is unavailable, any director of the company may sign.
iv. For firms, the appeal must be signed by the Managing Partner. If the Managing Partner
is unavailable, any partner (not a minor) may sign.
v. For Limited Liability Partnerships (LLPs), the appeal must be signed by the Designated
Partner. If the Designated Partner is unavailable, any partner may sign.
vi. For Local Authorities, the appeal must be signed by the Principal Officer.
vii. For Political Parties, the appeal must be signed by the Chief Executive Officer of the
party.
viii. For other associations or persons, the appeal must be signed by the Principal Officer
or by any member or person competent to act on their behalf.

5. Memorandum of cross objections -

Upon filing an appeal to the ITAT by the taxpayer or the Assessing Officer, the opposing party
will be notified about the appeal, and they have the option to file a memorandum of cross-objections
with the ITAT.

The memorandum of cross-objections must be filed within 30 days of receiving the notice and
should be submitted using Form No. 36A. There is no fee for filing the memorandum of cross-
objections. The ITAT may consider accepting a memorandum of cross-objections even after the
30-day period if there is a valid reason for the delay.

The person authorized to sign Form 36 (the form of appeal) must also sign and verify the
memorandum of cross-objections. The ITAT will handle and dispose of the memorandum of cross-
objections similar to an appeal filed using Form 36.

7
6. Documents to be submitted with appeal -
i. Documents Required for the Appeal:
ii. Form No. 36 - to be submitted in triplicate.
iii. Order appealed against - 2 copies (including one certified copy).
iv. Order of Assessing Officer - 2 copies.
v. Grounds of appeal before the first appellate authority (i.e., Commissioner of Income
Tax (Appeals)) - 2 copies.
vi. Statement of facts filed before the first appellate authority (i.e., Commissioner of
Income-Tax (Appeals)) - 2 copies.
vii. For appeals against penalty orders - 2 copies of the relevant assessment order.
viii. For appeals against orders under section 143(3) read with section 144A - 2 copies of
the directions of the Joint Commissioner under section 144A.
ix. For appeals against orders under section 143 read with section 147 - 2 copies of the
original assessment order, if any.
x. Copy of the challan for payment of fees

7. Submission of paper book -

The Appellant or the Respondent, also known as the opposite party, may compile a paper book
to support their claim. This paper book, submitted in duplicate, should contain documents,
statements, or other papers referenced in the assessment or appellate order on which the Appellant/
Respondent intends to rely.
The paper book must be properly indexed, with pages numbered accordingly. It should be filed
at least one day before the scheduled hearing of the appeal, accompanied by proof of service
showing that a copy of the paper book was provided to the opposite party at least a week before
the hearing date. Each document within the paper book must be certified as a true copy by the party
submitting it.
In cases of genuine delay, the ITAT may condone the late filing of the paper book. Additionally,
the ITAT has the authority to direct the preparation of the paper book in triplicate, to be borne at
the cost of either the appellant or the respondent, as deemed necessary for the appeal’s resolution.
It’s important to note that any additional evidence should be filed separately and not included
as part of the paper book.

8. Hearing of the appeal by the ITAT -

The ITAT will schedule the date and location for the appeal hearing and notify all parties
involved. A copy of the memorandum of appeal must be sent to the Respondent either before or
along with this notice. The ITAT will proceed to hear the appeal on the designated date, although
it may be adjourned to subsequent dates as necessary.
If the appellant is summoned by the ITAT but fails to appear, whether in person or through an
authorized representative, the ITAT may proceed to dispose of the appeal based on the merits after
hearing from the Respondent.

8
 HAND BOOK ON JUDICIAL MATTERS

Following an ex parte hearing, if the appellant later appears before the ITAT and demonstrates
sufficient cause for their earlier non-appearance, the ITAT can set aside the ex parte order and
reinstate the appeal. A similar procedure applies if the appeal is disposed of in the absence of the
respondent.

9. Filing of additional evidence -

Parties to the appeal are not allowed to file additional evidence, whether oral or documentary,
before the ITAT. This means that no new evidence can be introduced during the appeal process.
However, if the Tribunal deems it necessary to consider specific documents, examine witnesses,
or receive affidavits to make informed decisions, it may permit the production of such documents,
witness examinations, filing of affidavits, and the presentation of additional evidence as deemed
necessary.

10. Order of the ITAT -

The Members of various benches of the ITAT hear the appeals assigned to them. Once the
appeal is heard, the ITAT will deliver its order within a specified timeframe and communicate it to
both the taxpayer and the Assessing Officer.

Appeals are typically heard by a Bench comprising one judicial member and one accountant
member. However, appeals where the total income computed by the Assessing Officer does not
exceed Rs. 50 lakh may be disposed of by a Single Member Bench.

In cases where the members of the Bench have differing opinions on any point, the decision is
made based on the majority view. If the members are equally divided, each member states their
points of difference, and the case is referred by the President of the ITAT for further deliberation
by one or more other members of the ITAT. The final decision is then based on the majority
opinion of all members who have heard the case.

Usually, the Bench announces its orders in court. However, if orders are not announced in
court, a list of such orders showing the appeal results and signed by the members is displayed on
the notice board of the Bench.

Where it is possible, the ITAT shall dispose off the appeal within a period of four years from
the end of the financial year in which appeal is filed.

11. Stay application -

The ITAT may, on an application made by the taxpayer and after considering the merits of the
application, pass an order of stay in any proceedings relating to an appeal filed under section
253(1). The stay order will be in operation for a period not exceeding 180 days from the date of
such order. The ITAT shall dispose of the appeal within the said period of stay specified in that
order.

9
 However, the stay shall be granted by the ITAT only when the assessee has ‘deposited’ or
‘furnished security’ to the extent of 20% of his tax liabilities (i.e. tax, interest, fee, penalty or
any other sum payable under the provisions of this Act). [Inserted by the Finance Act, 2020,
Applicable w.e.f. Assessment Year 2020 -21].

If such appeal is not so disposed of within the period of stay specified in the order of stay, the
ITAT may extend the stay period, on an application made in this behalf by the taxpayer on being
satisfied that the delay in disposing of the said appeal is not attributable to the taxpayer. The
extension of stay period can be for a further period or periods, as the ITAT thinks fit, but the
aggregate of the period originally allowed and the period or periods so extended or allowed shall
not, in any case, exceed 365 days and the Appellate Tribunal shall dispose of the said appeal
within the period of stay so extended or allowed.

If the appeal is not disposed off within the period allowed or within the period or periods
extended, which shall not in any case exceed 365 days, the order of stay shall stand vacated after
the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable
to the taxpayer.

12. Rectification of Appellate Order u/s 254(2) of the IT Act-

The ITAT may, at any time within 6 months from the end of the month in which the order was
passed, rectify any mistake apparent from record, amend any order passed by it if the mistake is
brought to its notice by the taxpayer or Assessing Officer. However, where such amendment has
the effect of enhancing an assessment or reducing a refund or otherwise increasing a liability of the
taxpayer, it shall not be made unless the Appellate Tribunal has given a notice to the taxpayer of
its intention to do so and has allowed the taxpayer a reasonable opportunity of being heard.

13. Faceless Proceedings before ITAT -

To impart greater efficiency, transparency and accountability for the purpose of disposal of
appeals by the Appellate Tribunal, the Central Government may make a scheme by:

a. Eliminating the interface between the Appellate Tribunal and parties to the appeal in
the course of appellate proceedings to the extent technologically feasible;

b. Optimizing utilization of the resources through economics of scale and functional

specialization;

c. Introducing an appellate system with dynamic jurisdiction.

The Central Government may, for the purpose of giving effect to the scheme, issue notification
in the Official Gazette, to direct that any of the provisions of this Act shall not apply or shall apply
with such exceptions, modifications and adaptations as may be specified in the notification.

10
 Chapter-III
E-FILING OF APPEAL IN ITAT & CHECKLIST

Note for e-filing

E-Filing Procedure

Note for E-Filing in the ITAT

Mandatory E-Filing:

• Appeals, Memorandum of Cross Objections, Stay Applications, and Miscellaneous

Applications, previously submitted in physical form as per the Income Tax (Appellate
Tribunal) Rules, 1963, must now be filed electronically. This should be done through
the newly developed e-Filing Portal of the ITAT: https://itat.gov.in/efiling/register.

Key Identifiers:

• The Permanent Account Number (PAN) or Tax Deduction and Collection Account
Number (TAN) of the Assessee, along with their mobile number and email ID, are
essential identifiers in the e-Filing Portal.

Eligibility:
• Any person entitled to file an appeal before the Income Tax Appellate Tribunal under
Section 253 of the Income Tax Act, 1961, or any other relevant enactment, may do so
electronically through the e-Filing Portal.

Document Requirements:
• All documents requiring signatures must be physically signed before scanning and
uploading to the e-Filing Portal.

• All filings, including prayers, petitions, grounds, affidavits, etc., should be typed in
Arial font, size 12, on one side of A4 size paper with double spacing and justified
horizontally before uploading.

11
1. E-filing Procedure
Step-I: Login in to ITAT Website ( https://itat.gov.in/efiling/register )

E-filing Registration –

E-Filing Registration Steps:

- Select User Type: Choose ‘I am an Assessee’ if you are an assessee, or ‘I am Department’
if you are an officer of the Income Tax Department.
- Agree to Terms of Use: Click ‘Click here to read and agree to the Terms of Use’ to view
the Terms of Use of the e-Filing Portal.
- Review Terms and SOP: Carefully read the Terms of Use and the Standard Operating
Procedure (SOP) for e-Filing. Ensure you have all important dates, appeal/order numbers,
and addresses of the assessee and department ready.
- Prepare Documents: Have all documents duly signed, scanned, and ready for uploading.
Review the List of Documents required for e-Filing of an appeal.
- Submit: click ‘Submit’ to proceed.

2. Important Checklist for e-filing: -

Particulars Yes/ No/ NA

1 Mandatory Enclosures

A Appeals

1 Memorandum of Appeal

2 Certified copy of the order appealed against (CIT/CIT(A)/AO)

3 Form 35, Grounds of Appeal & Statement of facts filed before the CIT(A)

4 Relevant order(s) of Assessing Officer/Directions of DRP

5 Penalty order
6 Draft assessment order (wherever required)

7 Order of Transfer Pricing Officer

8 Tribunal Fee Challan (in case of an appeal by assessee)

9 Authorization of the CIT to file the appeal (in case of appeal by Revenue)

B Cross Objections

1 Memorandum of Cross Objection

2 Authorization of the CIT to file the CO (in case of a C.O. by Revenue)

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 HAND BOOK ON JUDICIAL MATTERS

C Stay Applications

1 Stay Application in prescribed format (Annexure-X)

2 Sworn affidavit in support of Stay Application

3 Demand Notice and relevant orders of lower authorities

4 Tribunal Fee Challan (Rs. 500/-)

D Miscellaneous Applications
1 Miscellaneous Application

2 Relevant Tribunal Order appealed against which the M.A. is preferred

3 Tribunal Fee Challan (in case of an Miscellaneous Application by assessee)

4 Authorization of the CIT to file the MA (in case of a Miscellaneous
Application by Revenue)

2 Optional Enclosures

1 Covering Letter

2 Vakalatnama/Power of Attorney (in case of an appeal by assessee)

3 Application for condonation of delay, wherever required.

4 Affidavit in support of application for condonation of delay

3 All the documents which require the signature of the parties are physically
signed, scanned and filed/uploaded.
4 All prayers, petitions, Grounds, affidavits, etc. are typewritten on one side of A4
size 4 paper with double spacing, justified horizontal alignment in font
Arial font and font size 12.
5 All documents/enclosures are fully and properly scanned in A4 size Black &
White 150-200 DPI resolution, and no pages are missing.
6 Paper Books, if any, are properly paginated and indexed.
7 Tribunal Fee is paid under 300- Self Assessment Others Category’.
8 Legal Representative of the assessee is brought on record, wherever applicable.
9 All the affidavits are properly attested and identified.

10 Vakalatnama/Power of Attorney is properly executed by the party and

accepted by the counsel.
11 Details of identical matters in the case of the assessee disposed off by/or pending
before the Tribunal, if any.
12 Postal address with PIN code, mobile number and e-mail address are mentioned
correctly. Mobile number and e-mail address are valid and in active use.

13 Grounds raised in the appeal, but not raised before the CIT(A), if any. Also furnish
an application justifying admission of such Ground(s) by ITAT

13
 Appointment of Special Counsel to Represent the Income Tax
Department Before Tribunals

As per the guidelines for the appointment of Special Counsel, outlined in CBDT order No. F.
No. 278/M 23/2021-ITJ dated 18-08-2021, Special Counsel is generally appointed only under
exceptional circumstances. The proposal for such an appointment must be submitted using the
prescribed proforma A and B, duly recommended by the respective CCIT/DGIT, and requires
subsequent approval from the Pr.CCIT of the region. The CBDT order further stipulates that no
case can be assigned to any Counsel other than the Standing Counsel, and cases may only be
assigned to the Special Counsel after a sanction order is issued by the CBDT.

Additionally, the CBDT order No. F. No. 278/M 23/2021-ITJ dated 08-05-2024 highlights
instances where proposals have been received requesting a Special Counsel to act as an “Assisting
Counsel” in addition to the primary Special Counsel. The CBDT has stated that this practice
should be avoided unless acutely warranted by the facts or circumstances involved. Instead, the
services of the empanelled Standing Counsels should be utilized to assist the Special Counsel if
necessary.

Further, the Senior Standing Counsel representing the Department in the High Court can be
appointed as Special Counsel to represent cases before the Tribunal, as per the terms and conditions
laid out in Instruction No. 7/2016 dated 07-09-2016, after obtaining the necessary approval from
the Pr.CCIT Mumbai.

14
 Chapter-I
FILING OF APPEAL IN THE HIGH COURT

Appeal to High Court

Procedure for Appeal
Stages for Hearing of Appeal
Cases before HC to be heard by not less than two judges
Meaning of Substantial Question of Law
Filing fee
No Abatement of Appeal

1. Appeal to High Court: -

The filing of appeals in the High Court against the orders of the Income Tax Appellate Tribunal
(ITAT) is governed by section 260A and 260B of the Income Tax Act, 1961.
Section 260A states as under:

(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate
Tribunal, if the High Court is satisfied that the case involves a substantial question of law.

(2) [The [Principal Chief Commissioner or] Chief Commissioner or the [Principal Commissioner
or] Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file
an appeal to the High Court and such appeal under this Sub-section shall be—]

a. filed within one hundred and twenty days from the date on which the order appealed
against is [received by the assessee or the[ Principal Chief Commissioner or] Chief
Commissioner or [Principal Commissioner or] Commissioner];
b. [**
c. in the form of a memorandum of appeal precisely stating therein the substantial question
of law involved.
[(2A) The High Court may admit an appeal after the expiry of the period of one hundred
and twenty days referred to in clause (a) of Sub-section (2), if it is satisfied that there was
sufficient cause for not filing the same within that period.]
(3) Where the High Court is satisfied that a substantial question of law is involved in any case, it
shall formulate that question.

(4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the
hearing of the appeal, be allowed to argue that the case does not involve such question:

15
Provided that nothing in this Sub-section shall be deemed to take away or abridge the power of the
court to hear, for reasons to be recorded, the appeal on any other substantial question of law not
formulated by it, if it is satisfied that the case involves such question.

(5) The High Court shall decide the question of law so formulated and deliver such judgement
thereon containing the grounds on which such decision is founded and may award such cost as it
deems fit.

(6) The High Court may determine any issue which -

a. has not been determined by the Appellate Tribunal; or

b. has been wrongly determined by the Appellate Tribunal, by reason of a decision on

such question of law as is referred to in sub-section.
(7) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908
(5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of
appeals under this section.]

2. Procedure for appeals: -

Who can file appeal? -

Section 260A(1) provides that an appeal shall lie before the High Court from every order passed
in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial
question of law. The section 260A(2) states that the Principal Chief Commissioner or Chief
Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file an
appeal to the High Court.

3. Stages for Hearing of Appeals: -

The appeal is heard in two stages.

2.12.1 First-Admission to consider whether the issue involved in appeal is a substantial question
of law or not. Where the High Court is satisfied that a substantial question of law is involved, it
will formulate the same.

2.2 Second- The appeal is finally disposed of after hearing. After hearing the case, the high
Court decides the question of law so formulated and delivers the judgment giving reasons. In
addition, the High Court may determine any issue, which has not been determined by the Appellate
Tribunal or an issue which has been wrongly determined. The High Court can also, award costs,
as it deems fit.

Section 260(1) and Section 260(2) states as under:

Section 260. (1) The High Court or the Supreme Court upon hearing any such case shall
decide the questions of law raised therein, and shall deliver its judgement 72 thereon containing
the grounds on which such decision is founded, and a copy of the judgment shall be sent under the
16
 HAND BOOK ON JUDICIAL MATTERS

seal of the Court and the signature of the Registrar to the Appellate Tribunal which shall pass
such orders as are necessary to dispose of the case conformably to such judgement.
[(1A) Where the High Court delivers a judgment in an appeal filed before it under
Section 260A, effect shall be given to the order passed on the appeal by the Assessing Officer on
the basis of a certified copy of the judgement.]

(2) The costs of any reference to the High Court or the Supreme Court which shall
not include the fee for making the reference shall be in the discretion of the Court.]

4. Case before High Court to be heard by not less than two Judges: -

Section 260B. (1) When an appeal has been filed before the High Court under Section 260A, it
shall be heard by a bench of not less than two Judges of the High Court, and shall be decided in
accordance with the opinion of such Judges or of the majority, if any, of such Judges.

(2) Where there is no such majority, the Judges shall state the point of law upon
which they differ and the case shall then be heard upon that point only by one or more of the other
Judges of the High Court and such point shall be decided according to the opinion of the majority
of the Judges who have heard the case including those who first heard it.]

5. Meaning of Substantial Question of Law: -

As per the Income Tax Act, 1961, the Tribunal is the last fact-finding authority and only questions
of law and that too what is referred to as a “substantial question of law” is taken up in appeals filed
before the High Court.

Section 100 of the Code of Civil Procedure, 1908, as amended in 1976, restricts the jurisdiction of
the High Court to hear a Second Appeal only on a “substantial question of law involved in the
case”.

Though the expression “substantial question of law” has not been defined in any Act or in any of
the statutes where this expression appears, e.g., section 100 of the Code of Civil Procedure, the
true meaning and connotation of this expression is now well settled by various judicial
pronouncements. It was observed by the Supreme Court in Sir Chunilal V. Mehta & Sons Ltd.
v. Century Spg. & Mfg. Co. Ltd. (1962 AIR 1314), that

“a question of law would be a substantial question of law if it directly or indirectly affects the
rights of parties and/or there is some doubt or difference of opinion on the issue”.

But

“if the question is settled by the Apex Court or the general principles to be applied in
determining the question are well-settled, mere application of it to a particular set of facts
would not constitute a substantial question of law”

17
Section 100 of CPC deals with “Second Appeal” moreover it includes the Substantial Question of
Law as well. The proviso reads as follows:

“Section 100 – Second Appeal:

Save as otherwise expressly provided in the body of this Code or by any other law for the time being
in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court
subordinate to the High Court, If the High Court is satisfied that the case involves a substantial
question of law.

An appeal may lie under this section from an appellate decree passed ex parte.

In an appeal under this Section, the memorandum of appeal shall precisely state the substantial
question of law involved in the appeal.

Where the High Court is satisfied that a substantial question of law is involved in any case, it shall
formulate that question.

The appeal shall be heard on the question so formulated and the respondent shall, at the hearing
of the appeal, be allowed to argue that the case does not involve such question:

Provided that nothing takes away or abridges the power of the question of law, not formulated by
it, if it is satisfied that the case involves such question.”

I. Question of Law and Question of Fact: -

Here dissimilarity between question of law and substantial question of law is required to understood.

i.e. what can be the subject matter of an appeal under Section 100 can only be a substantial
question of law. It should involve a matter of general public importance or affect the rights
of the parties substantially. Where the determination of the issue depended upon the
appreciation of evidence or materials resulting in ascertainment of basic facts without
application of any principle of law, the issue merely raises a question of fact. Hon’ble
Delhi High court observed in Mahavir Woollen Mills v. CIT (245 ITR 297).

A question of fact becomes a question of law, if the finding is either without any evidence or
material, or if the finding is contrary to the evidence, or is perverse or there is no direct nexus
between the conclusion of fact and the primary fact upon which that conclusion is based. But, it is
not possible to turn a mere question of fact into a question of law by asking whether as a matter of
law the authority came to a correct conclusion upon a matter of fact. In Sree Meenakshi Mills
Ltd. v CIT (1967 SC 819) the Apex Court has held that where the determination of an issue
depends upon the appreciation of evidence or materials resulting in ascertainment of basic facts
without application of any principle of law, the issue raises a mere question of fact.

i. As the Tribunal is the ultimate fact-finding authority, if it has reached certain findings
upon examination of all relevant evidence and materials before it, the existence or
otherwise of certain facts at issue is a question of fact.

18
 HAND BOOK ON JUDICIAL MATTERS

ii. Any inference from certain facts is also a question of fact. If a finding of fact is arrived
at by the Tribunal after improperly rejecting evidence, a question of law can arise.

iii. While the Tribunal acts on materials partly relevant and partly irrelevant, it can give
rise to a question of law if it is impossible to say to what extent the irrelevant material
was used to arrive at the finding. Such a finding is vitiated because of the use of
inadmissible material.

iv. Where any finding is based on no evidence or material, it involves a question of law.

6. Filing fee

Initially, according to section 260A(2) a fee of Rs. 10,000/- was fixed by the statute for every appeal
filed. However, an amendment was made by the Finance Act, 1999 with effect from 1st June, 1999
whereby the provisions of Code of Civil Procedure, 1908 relating to appeals to the High Court
were made applicable also to appeals under section 260A. As a result, the court fee as applicable
for filing a Second Appeal under section 100 of the Code of Civil Procedure, 1908, has to be paid
for filing an appeal under section 260A.
As far as the Bombay High Court is concerned, Article 16A was inserted in Schedule 1 to the
Bombay Court Fees Act to provide that an appeal filed after 1.6.1999 and pending before the High
Court against the order passed in appeal by the Appellate Tribunal, u/s. 260A(2), an ad valorem fee
would be leviable on the amount in dispute; i.e. the difference between the amount of tax actually
assessed and the amount of tax admitted by the assessee as payable by him, subject to a maximum
fee of Rs. 10,000/-.
Thus, the filing fee is one as fixed by the State Governments under the relevant Court Fees Act.

7. NO ABATEMENT OF APPEAL: -
Section 159 of the Act makes it expressly clear that the liability to pay tax under the Act does not
cease on account of the death of the assessee. Thus, in case of death of an assessee the appeal filed
under section 260A does not abate. The proceedings under the Act could be proceeded with against
the legal representatives. In case of death of the assessee a notice of motion / chamber summons
can be taken out to get the legal heirs on record. – [CIT vs. Smt. Rukmini (331 IRE 102, Karn)
and Arvind Kayan v. Union of India [403 ITR 36 (Calcutta)].

19
 Chapter-II
MONETARY LIMITS FOR
FILING APPEAL IN HIGH COURT

1. Introduction
The CBDT, through Circular No. 3 of 2018 dated 11-7-2018 and its subsequent amendment
dated 20th August 2018, has specified monetary limits for filing income tax appeals by the
Department before the Income Tax Appellate Tribunal, High Courts, and SLPs/Appeals before the
Supreme Court.

Additionally, the CBDT issued an amendment through Circular No. 17/2019 [F.NO. 279/
MISC.142/2007-ITJ(PT.)], dated 8-8-2019, wherein it further clarified or stated certain provisions
related to this matter.

“As a step towards further management of litigation, it has been decided by the Board that monetary
limits for filing of appeals in Income cases be enhanced further through amendment in Para 3 of
the Circular mentioned above and accordingly, the table for monetary limits shall read as follows:

Sl. No. Appeals/SLPs in Income-tax matters Monetary Limit (Rs.)

1. Before Appellate Tribunal 50,00,000

2. Before High Court 1,00,00,000

3. Before Supreme Court 2,00,00,000

It has been clarified in the said circular that

“... The Assessing Officer shall calculate the tax effect separately for every assessment year in
respect of the disputed issues in the case of every assessee. If in the case of an assessee. The
disputed issues arise in more than one assessment year; appeal can be filed in respect of such
assessment year or years in which the tax effect in respect of the disputed issues exceeds the
monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or
years in which the tax effect is less than the monetary limit specified in para 3. Further, even in the
case of composite order of any High Court or appellate authority which involves more than one
assessment year and common issues in more than one assessment year, no appeal shall be filed in
respect of an assessment year or years in which the tax effect is less than the monetary limit
specified in para 3. In case where a composite order/ judgement involves more than one assessee,
each assessee shall be dealt with separately.”

20
 HAND BOOK ON JUDICIAL MATTERS

2. Circular No. 5/2024 dated March 15, 2024

The Central Board of Direct Taxes (CBDT) has recently issued Circular No. 5/2024, F. No 279/M
isc.143/2007/ITJ(PT), dated March 15, 2024. This circular revise the exceptions related to the
filing of appeals across all judicial fora.

While the monetary limits set for filing appeals or Special Leave Petitions (SLPs) remain applicable
to all cases, including those involving Tax Deducted at Source (TDS) and Tax Collected at Source
(TCS) under the Act, there are specific exceptions to this rule.

In instances that fall under these exceptions, the decision to file an appeal or an SLP is to be based
solely on the merits of the case, disregarding the tax effect and the monetary limits. The categories
exempt from monetary limits are as follows:

a. Where any provision of the Act or the Rules or notification issued thereunder has been
held to be constitutionally invalid, or
b. Where any order, notification, instruction or circular of the Board or the Government
has been held to be illegal or ultra vires the Act or otherwise constitutionally invalid,
or
c. Where the assessment is based on information in respect of any offence alleged to have
been committed under any other law received from any of the law enforcement or
intelligence agencies such as CBI, ED, DRI, SFIO, NIA, NCB, DGGI, state law
enforcement agencies such as State Police, State Vigilance Bureau, State Anti-Corruption
Bureau, State Excise Department, State Sales/Commercial Taxes or GST Department,
or
d. Where the case is one in which prosecution has been filed by the Department in the
relevant case and the trial is pending in any Court or conviction order has been passed
and the same has not been compounded, or
e. Where strictures/adverse comments have been passed and/or cost has been levied
against the Department of Revenue, CBDT or their officers, or
f. Where the tax effect is not quantifiable or not involved, such as the case of registration
of trusts or institutions under sections 10(23C), 12A/ 12AA/12AB of the Act, order
passed u/s 263 of the Act etc. The reference to cases involving sections referred here,
where it is not possible to quantify tax effect or tax effect is not involved, is for the
purpose of illustration only.
g. Where addition relates to undisclosed foreign income/undisclosed foreign assets
(including financial assets)/undisclosed foreign bank account, or
h. Cases involving organized tax evasion including cases of bogus capital gain/loss
through penny stocks and cases of accommodation entries, or
i. Where mandated by a Court’s directions, or Writ matters, or
j. Matters related to wealth tax, fringe benefit tax, equalization levy and any matter other
than the Income Tax Act, or

21
 k. In respect of litigation arising out of disputes related to TDS/TCS matters in both
domestic and international taxation charges: -
l. Where dispute relates to the determination of the nature of transaction such that the
liability to deduct TDS/TCS thereon or otherwise is under question, or
m. Appeals of International taxation charges where the dispute relates to the applicability
of the provisions of a Double Taxation Avoidance Agreement or otherwise
n. Any other case or class of cases where in the opinion of the Board it is necessary to
contest in the interest of justice or revenue and specified so by a circular issued by
Board in this regard.

3. Scenarios on the applicability of monetary limits u/s 158AB: (Circular

No.8/2023- No. 279Misc. IM-93/2018-ITJ(Pt.) DATED 31.05.2023.)

After insertion of Section 158AB of the Act, The Board has issued scenarios on the applicability
of monetary limit in view of Section 158AB of the Act.

As per this Circular;

“In this respect the insertion of Section 158AB in the Income Tax Act, 1961 [hereinafter referred
to as the Act] has led to queries on monetary limits and exceptions applicable in respect of cases
falling within the purview of Section 158AB of the Act. In supersession of the letter dated 29.09.2022,
referred to above, the following guidelines on the above subject are hereby issued: 3. At the outset
it is clarified that references to collegiums constituted U/S l58AB of the Act for deciding qn the
deferral of appeal(s)/grounds of appeal(s) would be made having regard to the extant monetary
limits read along with the exceptions to the same, as mentioned in para 1 above and the exceptions
provided in para 6 below. – If the following terminology is proposed in respect of para 5 below:
i. Yo:the current year in which appeal filing is under consideration, and
ii. Yf: the year in which the final decision on the question of law is received in favour of
Revenue in the ‘other case’ (‘other case’ being as referred to in section 158AB of the
Act).

3.1 Scenarios on the applicability of monetary limits. -

I. In cases where only one ground is contested and where the tax effect is greater than
the monetary threshold as per the extant monetary limits for filing appeals at relevant
judicial fora, set by CBDT, and section l58AB is applicable to it, appeal may be deferred
in the current year (Yo) in view of the provisions of section 158AB. The appeal is to
be filed in the year in which the final decision on the identical question of law is received
in favour of Revenue in Yf.
II. In cases where multiple grounds are contested and where the total tax effect of all the
disputed grounds (i.e., grounds to which Section 158AB is applicable and otherwise)
is greater than the extant monetary limits for filing appeals at relevant judicial fora,
set by CBDT, and Section 158AB is applicable only to certain grounds, the guidelines
for filing appeal are as follows:

22
 HAND BOOK ON JUDICIAL MATTERS

i. in the current year (Yo),

a. filing of appeal on the grounds to which section 158AB is applicable may be

deferred in view of the provisions of that section, and

b. appeal may be filed on the residual grounds.

ii. in the year in which the final decision on the identical question of law is received
in favour of Revenue in FY, appeal is to be filed on the grounds to which section
158AB is applicable, irrespective of the monetary limit at that point in time.

In respect of deferring appeals u/s 158AB of the Act, while adhering to the guidelines as laid down
in the preceding paras, it is to be ensured that when judicial finality is achieved in favour of
Revenue in the ‘other case’, appeal in the ‘relevant case’ should be contested on merits subsequent
to the decision in the ‘other case’ irrespective of the extant monetary limits. Further, if the judicial
outcome in the other case is not in favour of Revenue and is not accepted by the Department,
appeal against the same may be contested on merits in the ‘other case’ irrespective of the extant
monetary limits, to arrive at judicial finality.

CBDT Circular No. 09/2024- New Income Tax Monetary Appeal Limits

According to the above-mentioned circular, the CBDT has enhanced the monetary limits for the
department for filing appeals before the Tribunal, High Courts, and Supreme Court vide Circular
No. 09/2024-Income Tax Dated: 17/09/2024 w.e.f. 17.09.2024.

With effect from 17th September 2024 Circular No. 09/2024 has enhanced the monetary limits
cited in Circular No. 5/2024 hereunder.

Sl.No Appeals/SLPs Monetary Limits

1 Before Income Tax Appellate Tribunal INR 60,00,000/-
2 Before High Court INR 2,00,00,000/-
3 Before Supreme Court INR 5,00,00,000/-

23
 Chapter-III
E - FILING OF APPEAL

Steps for filing E Appeal

1. Steps for filing of appeal u/s 260A of the Act in High Court by
Counsel
1. The concerned Principal Commissioner of Income Tax (PCIT) or Commissioner of Income
Tax (CIT) should inform the Junior/Senior counsel regarding the filing of the appeal under
section 260A of the Income Tax Act. This communication should include relevant documents
necessary for drafting the appeal memo and preparing the case.
2. The email sent to the counsel should include legible attachments such as:

- Assessment Order

- Form 35 (Appeal to the Commissioner of Income Tax (Appeals))

- CIT Appeal Order

- Form 36 (Appeal to the Income Tax Appellate Tribunal)

- ITAT Order (Order of the Income Tax Appellate Tribunal)

- Scrutiny Report

- Approval letters confirming the decision to file an appeal

- Questions of law involved

- Tax effect

- Last date of filing

- Docket details
3. The appointed counsel then prepares a draft of the Income Tax Appeal and sends it via
emailto the concerned PCIT/CIT for review.

24
 HAND BOOK ON JUDICIAL MATTERS

4. The income tax appeal draft is reviewed by the concerned PCIT/CIT, and the final draft,
including the Appeal Memo and exhibits, is printed on A-4 size white bond paper. The draft
is then signed and stamped by the Income Tax Officer (ITO) and PCIT/CIT. The appeal
documents should prominently display the name, contact number, email ID of the JAO and
the ITO(Judicial) concerned for effective coordination with the Standing Counsel.
5. Court Fee of Rs. 10.000/- is also annexed with the draft in the form of challan. The process of
payment is through GRAS [Government Receipt Accounting System]. Court fee of Rs. 15/-
is affixed to Vakalatnama. Give all the above documents to the appointed Counsel.
6. The draft is then notarized, OCR Scanned, digitally numbered and E-filed by the appointed
Counsel.
7. Once the draft is e-filed, a CNR number and e-filing number is generated. Next day lodging
number is received from the e-filing department on email of the counsel.
8. The registry in the High Court checks the draft and intimates the defect or Objection in
theappeal filed and sends an email to the counsel who has filed the appeal.
9. In case of any defect/Objection pointed out by the registry, upon intimation from the Standing
Counsel, the objection is to be removed within 15 days of such communication from the
registry. The PCIT should have regular interaction to ensure that the objections are removed
by the Counsel immediately.
10. While the appeal is on lodging number, copy of Income tax appeals needs to be served in the
respondents within two weeks of earliest. The Affidavit of Service is then to be uploaded on
the e-filing portal.
11. As soon as the objections are removed the Appeal gets registered and the registry gives an
ITXA number to the appeal which should be intimated by the Standing Counsel to the office
of the PCIT /CIT concerned.

IN CASE OF DELAY.
If there is a delay in filing income tax appeal or if the last date has already passed.
Then
1. Along with the draft Income Tax Appeal, draft Interim Application explaining the delay
should also be prepared. There should be averment of delay in income tax appeal.
2. Both the documents should be filed one after the other.
3. Once Interim Application for condonation of delay is e- filed, lodging number will be received
for both. ITXAL & IAL. Both the copies of Income tax appeal and Interim Application should
be served on the respondents.
4. Once served Affidavit of Service should be filed.
5. A circulation should be taken for fixing the Interim Application for hearing on board by the
Counsel.
6. Once the application is allowed, the order copy should be annexed with the main Income
Tax Appeal i.e. on lodging number for removal of objections and registration of appeal.

25
Format of Docket & Vakalatnama

I am member of Advocates welfare fund hence stamp of Rs. 20/- is affixed.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION No. -----------------------

M/s.----------------------------------------.Petitioner
PAN No.------------------------
Mumbai

V/s.

Income Tax Officer-_______

Mumbai & others …………………. Respondents
A.Y. _______

26
 HAND BOOK ON JUDICIAL MATTERS

To,
The Prothonotary& Senior Master,
High Court, O.S., Mumbai

Respected Sir/Madam,

I, ----------------------------, Pr.  Commissioner of Income Tax-__, Mumbai, the appellant above

named, do hereby appoint Shri._____________, Advocate, to act, appear and plead for me/ us in
the above matter.
In witness thereof, I have set and subscribed my/our hand to this writing at Mumbai.

Dated this day of May 2023.

(----------------------------)
Pr. Commissioner of Income Tax-___,
Mumbai

ACCEPTED Appellant

_________________
(Advocate for Respondents)
Advocate, High Court
O.S. No. ________
Advocate, High Court
Advocate Code_________
Office: ___________
Phone __________

27
 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION No. ________ of 2023

M/s.-----------------------------------------------------.Petitioner

PAN No. -------------------------

Mumbai

V/s.

Income Tax Officer-_______

Mumbai …………………. Respondents
A.Y. _______

VAKALATNAMA
___________________________________
Dated this day of May, 2022
___________________
Advocate, High Court
O.S. No._______
Advocate Code_________

Office: ___________

Phone __________

CIT/SI. No

28
 HAND BOOK ON JUDICIAL MATTERS

HIGH COURT
O.O.C.J

WRIT PETITION NO.

SUIT / APPEAL NO.
Panel Counsels are requested to ensure that the bills are
ARB. SUIT/ ARB. PETN. NO.
1 submitted within three months of the date of Judgment/
CO. PETN./ CO. APPLN.
order of
CIVIL WRIT PETITION NO. --------- of
20240

M/s _______________
After Admission/ final hearing, copy of the Petition etc.
PAN No.------------------,
2 Along with Judgment / Order passed by the Court, must
Mumbai
be returned to the concerned CIT’s office.
Petitioner

Income Tax Officer-______

Whenever conferences are held, name of the officials, du-
3 Mumbai
ration and dates must invariably be indicated.
A.Y. ________ Respondent

As regards admissibility and quantum of fee, the decision

4 of the concerned Officer incharge in the office of Mum- Coram:-
bai shall be final. date : ______________

In the event of any doubt or difference regarding the fees,

APPEARANCE OF WRIT PETITION
the fees determined, the decision of the Central Board of
OF INCOME TAX ACT, 1961
Direct Taxes shall be final and binding. It may be an or-
5 Counsel Name :
der in writing, making suitable modification in any of the
________________
provisions contained in the Scheme containing terms and
Advocate for the Respondents
conditions for the engagement of the counsel.

Bills shall be submitted in Triplicate and pre-receipted

6 ITO (Judl) to Pr. CIT- , Mumbai
(Revenue Stamped) in the new format.

29
 Chapter-IV
REMOVAL OF OBJECTIONS IN FILING
APPEAL

Removal of Objections
Common objections raised by the Registry

1.Removal of Objections: -
a. The process of filing of Appeal u/s 260A starts with filing of Appeal and reaches the
point of finality only after the IT. Appeal No (ITXA in case of IT Appeal and WTXA
in case of Wealth Tax Appeal) is allotted. In other words, mere filing of documents
of Appeal does not mean that the Appeal is filed, since the same is liable to be dismissed
for want of removal of objections raised by the Registry of the High Court. A cumulative
time period of 30 days is given for removal of these objections after which it is treated
as a fresh filing.

b. The Standing Counsel/ High Court Cell intimates the respective PCIT/CIT offices
about the same for removing the concerned objections. But this aspect requires to be
closely monitored at different levels and all objections removed within the limitation
period from the date of its being raised.

c. In case the objection cannot be removed in the time allotted due to the departmental
difficulties or the appeal papers not being available in the office of the Registry then
the concerned Assessing Officer cannot get an extension but will have to file a regular
appeal for condonation of delay in removal of objections with reason for the delay in
the form of an affidavit.

d. In case the appeal has been filed u/s 260A of the IT Act beyond the stipulated period
of filing of appeal, an appeal for condonation of delay with reason for the delay in filing
is to be filed in the form of an affidavit. This notice of motion is listed for hearing before
the High Court for condonation of delay. If the Court condones the delay, it would be
necessary to remove the objection within seven days from the date of order pronounced
in the Court. If the objections are not removed, then the appeal filed will automatically
be rejected. After the removal of objections, the Assessing Officer / Ward Inspector
should ensure that the appeal number by the Registry is allotted. For this purpose, he
should be constantly in touch with the office of the Registrar of the concerned HC or
the Standing Counsel.

30
 HAND BOOK ON JUDICIAL MATTERS

e. It is reiterated that the process of filing of Appeal is complete only when the answer
to the question “Has appeal number been allotted to particular case?” is “Yes”.
If the answer is “No”, the process is still incomplete.

f. It is suggested that Standing Counsels having the necessary experience should take
necessary steps to identify and remove the objections at the filing stage itself though
it is rare that an appeal is accepted without any objections being raised by the Registry.

2. COMMON OBJECTIONS RAISED BY THE REGISTRY: -

• The exhibits are not legible, photocopy is faint.

• No underlining, marking of documents: The documents should be free from underlining

and marking etc. The rationale is that the marking should be of the Hon’ble Judges
only during hearing.

• Missing Exhibits

• Index is not properly prepared. Page Number/s are not given.

• Delay in filing of appeals.

• Margins and line spacing.

31
 Chapter-V
HEARING OF APPEAL AND
PASSING OF ORDER

Hearing of Appeal and Passing of Order by the High Court

Procedure after disposal of the case

1. HEARING OF APEPAL AND PASSING OF ORDER BY THE

HIGH COURT
1. After the appeal is filed, either by the Department or by the assessee, it is taken on the
Board of the Tax Bench by the High Court Registry. The intimation that the case is listed for
hearing is conveyed by the registry through two lists:

i. Daily Main Cause-List

ii. Daily Supplementary Cause -List
iii. Weekly Main Cause-List
iv. Weekly Supplementary Cause-List

The Cause-lists is put out on the website of the Bombay High Court i.e. bombayhighcourt.nic.in.
This cause-list is for the next week and is usually put up in the evening of Saturday by 8.00 p.m.
Further on the previous day at 8.00 p.m., a supplementary cause-list is also put up for additional
cases to be taken on the board on the next day. The officers concerned are required to view the
same and instruct the Counsel to represent the case in the High Court. The Cause lists can also be
viewed in the IAMS portal.

These lists categorize the cases into different classes carrying the following abbreviations
with their numbers.
i. W.P. – Writ Petition – [It appears in the list as WP/123 (No. given by the Writ Section
of the High Court)/2023 (year of filing)]
Writ Petitions are generally filed by the assessee. Exceptionally, they can be filed by
the Department against the order passed by the ITAT or Settlement Commission.

ii. NMA – Notice of Motion – [It appears in the list as NMA/123 (No. given by the
Prothonotary’s office)/2023 (year of filing)].

When an appeal is filed in the High Court after the due date of filing of appeal as per
the criteria laid down in clause (a) of sub-section (2) of section 260A, a notice of motion

32
 HAND BOOK ON JUDICIAL MATTERS

application is required to be filed. The notice of motion is a request to the Hon’ble

Court to condone the delay stating in detail, the reasons for the delay. As this is to be
decided before hearing the appeal on merits, it is treated as a separate category.

iii. ITXAL – Income Tax Appeal (Lodging) – It appears in the list as ITXAL/123 given
by the Prothonotary’s office/2023 (Year of filing of appeal)].

ITXAL signifies Lodging number of the Income tax appeals. This number is given at
the time of filing of an appeal u/s. 260A. This number will cease after the permanent
appeal number (i.e. ITXA) is given after the removal of objections, if any, and remain
till the disposal of appeal.

ITXA – Income Tax Appeal – It appears in the list as ITXA/123 (No. given by the
Prothonotary’s office / 2024 the year in which the delay is condoned and objection is
removed).

This is the final categorization of the Income Tax Appeal filed in the High Court u/s.
260A. It indicates that the appeal has been accepted by the Registry and is now ready
for being included in the cause-list.

Accessing Cause Lists on Bombay High Court Website:

• Cause lists are available on the Bombay High Court website a day before the hearing,
around 8:00 p.m.

• Click the “Cause List” icon and navigate to the “daily/weekly cause list” page, then

• Select ‘Original Side’ for tax bench listings.

• Various lists like case number-wise, lawyer-wise, party-wise, court-wise, and judge-
wise are accessible.

• If the judge’s name is known, select it to access the cause list of that specific Tax bench.

Preparing for Court Representation:

• The PCIT/CIT issues a docket in the Standing Counsel’s name for court representation.

• Junior Standing Counsel who drafted the appeal can assist the Senior Standing Counsel.

• Assessing Officer should provide proper assistance and brief the Counsel on case
details before the hearing.

• Standing Counsel should receive a copy of the scrutiny report to understand case basics,
including tax effects and covered issues.

33
2. Procedure after disposal of the case: -
Once the order is pronounced in the High Court, the Assessing Officer should immediately
download the digital copy of the same from the High Court website and start further process as
deemed necessary. The digital copy is also forwarded by CIT(Judicial) to the CIT concerned.

The Assessing Officer should also keep in touch with the Standing Counsel for obtaining a certified
copy of the order after disposal of the case and in case the department appeal is dismissed, he
should take immediate steps to get it restored or to file an SLP in the Supreme Court. In case the
appeal is decided in favour of the Department, he should take steps either himself or through the
Tax Recovery Officer to recover the arrears.

The milestones of progress of the case should be recorded in the Appeal Control Register maintained
in the PCIT’s office.

Order
Name of the Order received in Order Result of Limitation date Scrutiny report
Sr. No assessee PAN No. sent to for filing further receipt date
PCIT’s appeal
AO date appeal
office

34
 Chapter-VI

ENGAGEMENT OF COUNSELS AND ASG

Appointment/Renewal of Standing counsels of IT Department before

various High Court
Contingencies arising during the pendency of appeals

1. Appointment/Renewal of Standing counsels of Income Tax

Department before various High Court: -

The CBDT has issued several important guidelines regarding the engagement of legal representatives
to represent the Income-Tax Department before various judicial forums:

1. Revision of Guidelines for Standing Counsels:

- CBDT revised the Guidelines for engagement of Standing Counsels through F. No. 279/
Misc/M-75/2011-ITJ(Part-II) dated 7th September 2016. This includes a revision of their
schedule of fees and related matters.

2. Engagement of Additional Solicitor General (ASG):

- CBDT issued a letter for the engagement of Additional Solicitor General (ASG) through
F. No. 278/M-23/2021-ITJ dated 9th June 2021. This letter specifies the revision of the
schedule of fees and related matters for ASGs representing the Income-Tax Department
before High Court and other judicial forums.

3. Revised Guidelines for Appointment of Special Counsels:

- CBDT issued revised guidelines for Appointment of Special Counsels through F. No. 278/
Misc/M-23/2021-ITJ dated 18th August 2021. These guidelines outline the appointment
process for Special Counsels representing the Income Tax Department be- fore Courts and
Tribunals.[ANNEXURE - B5]

In summary, the proposal for engagement of an ASG to defend matters within their jurisdiction on
normal terms and conditions specified in the MOL notification dated 01-10-2015 does not require
approval from the Board. However, if the ASG to be engaged belongs to a different region, the
appointment will be treated as that of a Special Counsel, and the proposal must be sent to the Board
for approval.

35
2. Contingencies arising during the pendency of appeals: -
Certain contingencies may arise during the pendency of appeals. These require bringing on record
the names and addresses of the relevant persons. These contingencies are tabulated below:

Contingency arising during

Sr. No Name and address of persons to be brought on record
the pendency of appeal
In the case of an individual, there Legal heirs or representatives or executors of his will or
1
may be death, insolvency, etc. administrators of his estate
In the case of an HUF, there may
2 be complete partition amongst the Erstwhile members of the HUF and the Karta
members
In the case of a company, it may
3 Liquidator of the company
go into liquidation or be wound up

In the case of a firm, AOP or BOI

4 Erstwhile partners of the firm or members of the AOP or BOI
there may be
In the case of a trust, the trustees
5 New trustees
may change

The Department must bring on record the names of relevant persons as early as possible. It is also
possible that during the pendency of the appeals, the addresses of the parties may change, case-pa-
pers are transferred or jurisdiction of CIT is changed. It is necessary to bring all these facts to the
notice of the Judicial Section.

36
 Chapter-VII
IAMS PORTAL

Key features of IAMS

Integrated Appeal Management System (IAMS) is an upgraded version of the AMS, launched
on 01.03.2022 by Shri Anand Sharan Singh, Pr.  Chief Commissioner, Income Tax, Mumbai. It
is exclusively used by the Income Tax Department, Mumbai, with designation-based email IDs
serving as user IDs for officers.

1. Key Features of IAMS:

i. Comprehensive Database:
Includes all Income Tax cases ever filed in the Hon’ble High Court.
ii. Automatic Case Sourcing:
IAMS automatically sources new income tax cases from the Bombay High Court and
integrates them into the system.
iii. Regular Data Synchronization:

Data of all cases in the system is synchronized regularly with High Courts. Case data,
status, and next dates are automatically updated, ensuring accuracy and timeliness.
iv. Scheduled Updates:

The cycle of updating the IAMS database runs twice a week to synchronize data
efficiently.

IAMS streamlines appeal management processes, enhances data accuracy, and provides real-time
updates for assessing officers within the jurisdiction. Apart from the core functionalities mentioned
earlier, IAMS offers several additional features and benefits:

i. Data Export to Excel:

a. The database can be downloaded in Excel format for further processing as per
specific requirements.
ii. Cause List Analysis:
a. Analyses cause lists and presents them in a usable format, aiding in efficient case
management
37
 iii. Alerts System:
a. Various alerts are issued based on updates in the database, ensuring timely actions
and notifications.
iv. Document Management:
a. PDFs of all appeal documents filed are mapped to respective cases.
b. Automatic orders are integrated into the system for easy access and reference.
v. Online Repository:
a. Offers an online repository of Questions of Law, facilitating legal research and
reference.
vi. Customization Options:
a. Manual fields allow for PAN number mapping, Assessment Year (AY) mapping,
Tax Effect information, and more, providing flexibility and customization.
vii. Case Segregation and Tracking:
a. Cases are segregated under various heads such as Disposed/Pending, CIT- wise,
Counsel-wise, Appeal Type, and Mumbai or out of Mumbai jurisdiction.
b. Displays total case pendency and CIT charge-wise case pendency, enabling
tracking and monitoring of case status and workload distribution.

These features collectively enhance the functionality, usability, and efficiency of IAMS, making it
a comprehensive and valuable tool for appeal management within the Income Tax Department,
Mumbai

Key Features of System Life cycle

i. Main page displays the case statistics in the form of charts and graphs.

ii. PCIT/CIT wise case statistics is displayed. It also shows various action points

38
 HAND BOOK ON JUDICIAL MATTERS

On ‘cases’ page various search criteria are given. Search can be executed by combining &/or
omitting various criteria. Various criteria are disposed, non-disposed, Sections, Tax effect, PAN,
CIT jurisdiction, Counsel, Case type, AY, Filing date etc.

39
Case Manager – filter for Active or Non-Disposed cases

Case Manager – filter for cases with PAN

40
 HAND BOOK ON JUDICIAL MATTERS

Case Manager - filter for cases of various CITs

Case Manager - filter containing cases with the search string (petitioner/respondent)

41
Case Manager - filter containing cases with the search string (case number)

Case Manager - filter of particular counsel name

42
 HAND BOOK ON JUDICIAL MATTERS

Case Manager - Upload Files(s) button for a case (ITXAL/244/2002)

Case Manager - Upload Files(s) page for a case (ITXAL/244/2002)

43
Case Manager - View button for a case (ITXAL/244/2002)

Case Manager - View page for a case(ITXAL/244/2002)

44
 HAND BOOK ON JUDICIAL MATTERS

Case Manager - Dates for a case

45
 Chapter-VIII
SECTION 158AA AND SECTION 158AB

Amendment of section 158AA

Explanation of the provisions of section 158AA and 158AB

The Government has recently taken steps to reduce the backlog of cases by raising the tax-effect
thresholds for Revenue’s appeals. The Finance Bill, 2022 introduced Section 158AB in the Income
Tax Act, 1961, which helps minimize litigation. Section 158AB allows the department to refrain
from filing repeated appeals with the High Courts and Supreme Court on legal questions that are
already pending before a jurisdictional High Court or the Supreme Court.

1. SECTION 158A, 158AA AND SECTION 158AB :-

Chapter XIV-A of the Income-tax Act, 1961

Chapter XIV-A, containing sections 158AA and 158AB, was introduced by the Taxation Laws
(Amendment) Act, 1984, effective from October 1, 1984. Initially, this chapter consisted of only
section 158A, which was included as a measure for managing litigation. The primary aim was to
avoid repetitive appeals and reference applications.

Section 158A: Avoiding Repetitive Appeals

Section 158A allows an assessee, during ongoing proceedings for an assessment year, to claim
that a question of law arising in the current case is identical to a question of law already pending
in the assessee’s own case before the High Court or Supreme Court for another assessment year.
If the Assessing Officer or appellate authority is satisfied with the claim, they may agree to apply
the final decision on the question of law from the earlier year to the present year. Consequently,
the assessee will not need to challenge the same question of law again in higher appellate authorities
for the present year. This process significantly reduces repetitive litigation and ensures judicial
efficiency.

Section 158AA: Deferment of Appeals Pending Supreme Court Decision

The Finance Act of 2015 introduced section 158AA. This section specifies that if a question
of law in an assessee’s case for any assessment year is identical to a question of law pending
before the Supreme Court in an appeal or special leave petition filed by the revenue against a High
Court’s order in favor of the assessee for another assessment year, the Assessing Officer can make

46
 HAND BOOK ON JUDICIAL MATTERS

an application to the Appellate Tribunal. This application requests that the appeal on the relevant
question of law in the present case be deferred until the Supreme Court’s decision on the question
of law in the earlier case becomes final. This provision aims to prevent unnecessary appeals and
streamline the resolution of legal questions pending the highest court’s judgment.

Section 158AB: Expanded Scope and Applicability

The Finance Bill of 2022 proposed to replace the existing section 158AA with a new and
expanded section 158AB. This revamped section is broader in coverage and applicability compared
to the previous section. The new section 158AB empowers the department to defer filing repeated
appeals with the High Courts and the Supreme Court on questions of law that are already pending
before a jurisdictional High Court or the Supreme Court. This measure is intended to further
minimize litigation and optimize judicial resources. Chapter XIV-A of the Income-tax Act, 1961,
which contains sections 158AA and 158AB, was introduced by the Taxation Laws (Amendment)
Act, 1984, effective from 1st October 1984. Initially, this chapter consisted of only one section,
namely, section 158A

2. Amendment of section 158AA-

i. In section 158AA of the Income-tax Act, in Sub-section (1), the following proviso
shall be inserted, namely: –
“Provided that no such direction shall be given on or after the 1st day of April, 2022.”.

Insertion of new section 158AB.

ii. After section 158AA of the Income-tax Act, the following section shall be inserted,
namely:–
Procedure where an identical question of law is pending before High Courts or Supreme
Court.

158AB. (1) Notwithstanding anything contained in this Act, where the collegium is of the opinion
that–
a. any question of law arising in the case of an assessee for any assessment year (such
case being herein referred to as the relevant case) is identical with a question of
law arising, –

i. in his case for any other assessment year; or

ii. in the case of any other assessee for any assessment year; and
b. such question is pending before the jurisdictional High Court under section 260A
or the Supreme Court in an appeal under section 261 or in a special leave petition
under article 136 of the Constitution, against the order of the Appellate Tribunal or
the jurisdictional High Court, as the case may be, which is in favour of such assessee
(such case being herein referred to as the other case), the collegium may, decide

47
 and inform the Principal Commissioner or Commissioner not to file any appeal, at
this stage, to the Appellate Tribunal under sub-section (2) of section 253 or to the
jurisdictional High Court under sub-section (2) of section 260A in the relevant case
against the order of the Commissioner (Appeals) or the Appellate Tribunal, as the
case may be.

(2) The Principal Commissioner or the Commissioner shall, on receipt of a

communication from the collegium under sub-section (1), direct the Assessing Officer to
make an application to the Appellate Tribunal or the jurisdictional High Court, as the case
may be, in such form as may be prescribed within a period of sixty days from the date of
receipt of the order of the Commissioner (Appeals) or within a period of one hundred and
twenty days from the date of receipt of the order of the Appellate Tribunal, as the case may
be, stating that an appeal on the question of law arising in the relevant case may be filed
when the decision on such question of law becomes final in the other case.

(3) The Principal Commissioner or Commissioner shall direct the Assessing Officer to
make an application under sub-section (2) only if an acceptance is received from the
assessee to the effect that the question of law in the other case is identical to that arising in
the relevant case; and in case no such acceptance is received, the Principal Commissioner
or Commissioner shall proceed in accordance with the provisions contained in sub-section
(2) of section 253 or in sub-section (2) of section 260A.

(4) Where the order of the Commissioner (Appeals) or the order of the Appellate
Tribunal, as the case may be, referred to in sub-section (1) is not in conformity with the
final decision on the question of law in the other case, as and when such order is received,
the Principal Commissioner or Commissioner may direct the Assessing Officer to appeal
to the Appellate Tribunal or the jurisdictional High Court, as the case may be, against such
order and save as otherwise provided in this section all other provisions of Part B of
Chapter XX shall apply accordingly.

(5) Every appeal under sub-section (4) shall be filed within a period of sixty days from
the date on which the order of the jurisdictional High Court or the Supreme Court in the
other case is communicated, in accordance with the procedure specified by the Board in
this behalf, to the Principal Commissioner or Commissioner.

Explanation. – For the purposes of this section, “collegium” means a collegium comprising
of two or more Chief Commissioners or Principal Commissioners or Commissioners, as
may be specified by the Board in this behalf.’.

3. Explaining the provisions of section 158AA and section 158AB-

Section 158AA of the Act relating to procedure when in an appeal by revenue an identical question
of law is pending before Supreme Court.

a. Sub-section (1) of the section stipulates that if a collegium of Chief Commissioners,

Principal Commissioners, or Commissioners collectively agrees that a question of law
arising in an assessee’s case for any assessment year (referred to as the “relevant case”)
is identical to a question of law in the case of that assessee or another assessee for a

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 HAND BOOK ON JUDICIAL MATTERS

different assessment year, which is currently pending before the jurisdictional High
Court under section 260A or the Supreme Court in an appeal under section 261 or a
special leave petition under article 136 of the Constitution, against the order of the
Appellate Tribunal or the jurisdictional High Court, in favor of such assessee (referred
to as the “other case”), they may decide and communicate to the Principal Commissioner
or Commissioner not to file any appeal, at this stage, to the Appellate Tribunal under
sub-section (2) of section 253 or to the jurisdictional High Court under Sub-section (2)
of section 260A against the order of the Commissioner (Appeals) or the Appellate
Tribunal, as applicable.

b. Sub-section (2) instructs the Principal Commissioner or Commissioner to direct the

Assessing Officer to apply to the Appellate Tribunal or High Court within 60 days of
receiving the order from the Commissioner (Appeals) or within 120 days of receiving
the Appellate Tribunal’s order. This application states that an appeal on the legal
question from the relevant case may be filed once the decision on the question of law
becomes final in the other case.

c. Sub-section (3) states that the Principal Commissioner or Commissioner can only
direct the Assessing Officer to make this application if the assessee agrees that the
question of law in the other case is identical to that in the relevant case. If no such
agreement is received, the Principal Commissioner or Commissioner will proceed as
per the provisions in section 253(2) or section 260A(2).

d. Sub-section (4) allows the Principal Commissioner or Commissioner to direct the

Assessing Officer to appeal against the order of the Commissioner (Appeals) or the
Appellate Tribunal if it doesn’t align with the final decision on the question of law in
the other case.

e. Sub-section (5) specifies that the appeal in the relevant case must be filed within 60
days of receiving the order from the jurisdictional High Court or Supreme Court in the
other case, following the procedure set by the Board.

The expression “collegium” for the purposes of the section means a collegium comprising of
two or more Chief Commissioners, Principal Commissioners or Commissioners as may be specified
by the Board.

This amendment took effect from 1st April, 2022.

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 Chapter-I
WRIT PETITION

Importance of Writ Petition

Difference between a Writ, a Writ Petition, an appeal and a PIL
Writ in Mandamus

1. Introduction: -
A writ can be termed as a formal written order issued by a judicial authority who possesses the
authority to do so. The meaning of the word “writs” means command in writing in the name of the
Court. It is a legal document issued by the court that orders a person or entity to perform a specific
act or to cease performing a specific action or deed, In India, writs are issued by the Supreme
Court under Article 32 of the Constitution of India and the High court under Article 226 of the
Constitution of India.

Meaning of Writ - Fundamentally, a writ is a formal written order issued by anybody, executive
or judicial, authorised to do so. In modern times, this body is generally judicial.

Writs under Indian Constitution - Fundamental Rights are contained in part III of the Indian
Constitution including the right to equality, right to life and liberty etc. Merely providing for
Fundamental Rights is not sufficient. It is essential that these Fundamental Rights are protected
and enforced as well. To protect Fundamental rights the Indian Constitution, under, Articles 32
and 226, provides the right to approach the Supreme or High court, respectively, to any person
whose fundamental right has been violated. At the same time, the two Articles give the right to the
highest courts of the country to issue writs on order to enforce Fundamental rights.

Kinds of writs -
i. Habeas corpus
ii. Mandamus
iii. Certiorari
iv. Prohibition
v. Quo-warranto

2. Importance of Writ Petition: -

Writs play a crucial role in ensuring the proper functioning of the legal system and protecting
individual rights. They provide a mechanism for individuals to challenge government actions, seek
relief from unlawful detention, and enforce fundamental rights.

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 HAND BOOK ON JUDICIAL MATTERS

“Anyone whose fundamental rights, as outlined in Part III of the Indian Constitution, are
violated can file a Writ Petition. This is a safeguard against the infringement of these fundamental
rights.”

Writ Petition can be filed in SC - Under Article 32, a writ petition can be filed in the Supreme
court. The Supreme Court can issue a writ only if the petitioner can prove that his Fundamental
Right has been infringed. It is important to note that the right to approach the Supreme Court in
case of a violation of a Fundamental Right is in itself a Fundamental right since it is contained in
Part III of the constitution.

Under Article 226, a writ petition can be filed before any High court within whose jurisdiction
the cause of action arises, either wholly or in part. It is immaterial if the authority against whom
the writ petition is filed is within the territory or not. The power of the High court to issue a writ is
much wider than that of the Supreme court.

The High Court may grant a writ for the enforcement of fundamental rights or for any other
purpose such as violation of any statutory duties by a statutory authority. Thus, a writ petition filed
before a Supreme Court can be filed against a private person too. Where a fundamental right has
been infringed, either the Supreme Court or the High Court can be approached.

It is not necessary to go to the High Court first and only thereafter approach the Supreme Court.
However, if a writ petition is filed directly in the Supreme Court, the petitioner has to establish
why the High Court was not approached first.

3. Difference between Writ and Writ Petition?

• A writ means an order that is issued under an authority. Therefore, a writ can be
understood as a formal order issued by a Court.
• A writ Petition is an application filed before a Court, requesting to issue a specific writ.
4. Difference between a Writ Petition, an Appeal and a PIL
• Writ Petition is typically filed when someone’s fundamental rights have been violated
or they have been the victim of injustice. It is for seeking justice for self and is normally
filed to address grievances against a Statutory Authority.
• An Appeal is a Petition to a higher court by a party who seeks to overturn a lower court/
appellate authority’s ruling.
• Writs are filed by individuals or institutions for their own benefit and not for public
interest, whereas PILs are litigations filed in a court of law, on any matter where any
interest of the public at large is affected such as Pollution, Terrorism, Road safety,
Constructional hazards etc.
5. Writ in Mandamus: -
It is the most common writ petition preferred by the assessee against the Department. Wherever
a public officer or the Government has done some act which violates the fundamental right of a
person, the Court would issue a writ of mandamus, restraining the public officer or government
from enforcing that order or doing that act against the person whose fundamental right has been
violated.

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 Chapter-II
FILING OF WRIT PETITION

Circumstances under which a Writ Petition can be filed

Provision of the law under which a writ is filed
Time limit for filing a Writ Petition

1. Circumstances under which a Writ Petition can be filed:-

A writ petition can be entertained in the following exceptional circumstances,
i. Breach of fundamental rights;
ii. Violation of the principles of natural justice;
iii. Excess of jurisdiction;
iv. Challenge to the vires of the statute or delegated legislation.
v. Appeals to the High Court can be made by the assesse or the Commissioner of Income
Tax. There might be instances where the Act deprives the assesse or the Commissioner
of the right to appeal. In such instances the concerned person is benefited with the
option of a writ petition, which acts as a substitute for the appeal.

By the Department -
The orders of the ITSC are final and not appealable. The orders are only subject to judicial
review in terms of Articles 136 and 226 of the Constitution. Therefore, the only remedy against
an order of the Settlement Commission is that of filing a Writ Petition. In exceptional
circumstances a Writ Petition can be filed against the order of ITAT by the Department.

2. Provisions of the law under which a Writ is filed:-

Article 226 & 227 of the Constitution of India
i. Article 226 provides the High Courts with the power to issue writs, to any person or
authority, including the government.
ii. Article 227 determines that every High Court shall have superintendence over all courts
and tribunals throughout the territories in relation to which it exercises jurisdiction.

3. Time limit for filing a Writ Petition: -

i. Article 226 of the Constitution of India lays down no time limit for filing a Writ
Petition but the courts have mandated that there should be a reasonable time to file the
writ petition for seeking redressal

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 Chapter-III

PROCEDURE FOR HANDLING WRIT

PETITIONS

Importance
SOPs/Instructions regarding Writ Petitions
Common issues noticed in Handling of Writ Petitions
Steps to be taken when a Writ Petition is Received

1. Importance: -
Many Writ Petitions are being received in Hon’ble Bombay High Court currently, especially
against the Assessment Orders passed under the Faceless Assessment Scheme (FAS). In many of
such cases, the Hon’ble HC has expressed its displeasure over the nature and content of such
orders, including issues like not giving enough time period to the assessee to file submissions, not
considering the reply filed by the assessee in the orders passed etc. The High Court has even
imposed cost upon officers, called them for personal attendance in Court (including senior officers
like CIT (Judicial) and PCsIT), initiated perjury proceedings in one case, asked the order to be
circulated to the Revenue Secretary and to everyone in the Finance Ministry and law ministry.
Thus, the handling of Writ Petitions is very important.

2. Standard Operating Procedures (SOPs) and Instructions for Writ

Petitions
In the realm of legal procedures concerning Writ Petitions, adherence to established protocols
and meticulous attention to directives are paramount. Instruction No. 7/2011 [F.NO. 279/
MISC./M- 42/2011-ITJ], dated 24-05-2011, delineates precise guidelines to be followed in
matters involving the Union of India, Ministry of Finance, Secretary (Revenue), Chairman CBDT,
or their representatives as respondents before High Courts in cases pertaining to Direct Taxes.

Para 11: Defending Cases and Seeking Guidance

“All the cases before High Court, pertaining to Direct Taxes, wherein Union of India, Ministry
of Finance, Secretary (Revenue), Chairman CBDT, or any of these figure as respondents, should
be defended by the CCIT/ DGIT concerned. Powers may be delegated to appropriate officers
nominated for the purpose stated above. The Board may be approached immediately for guidance/
Instructions in case any difficulty is experienced in exercising these powers. In Writ matters
against orders under section 119(2) of the IT Act, 1961 etc, appropriate instructions may be
obtained from the concerned division of the Board under intimation to ITJ section.”

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Para 14: Supporting Departmental Counsels
The CIT should ensure that whenever the Departmental Counsel seeks Instructions / clarifications
in a case, the same are attended to by the officers concerned promptly. The counsel should be
briefed properly to strengthen Revenue’s case. The CIT should personally involve himself in cases
involving intricate issues of facts/law having wide ramifications or involving high revenue stake.
A copy of the scrutiny report for filing appeal to High Court should invariably be made available
to the appearing counsel for his assistance in preparation of the case and arguments”.

Judgments of High Court containing strictures etc.

Judgments of the High Court containing strictures or which are contrary to Board’s orders,
notifications, instructions, circulars etc. shall be brought to the notice of the Board (concerned
division) immediately by the CCIT/DGIT under intimation to ITJ section of the Board.

2.1 Standard Operating Procedure (SOP) for handling writ petitions where assessment is
made under the Faceless Assessment/Penalty Scheme where NaFAC/CBDT is one of the
respondents (N.A.F.A.C-1/58/2021-22/333 Dt: 26-7-2021).

The Central Board of Direct Taxes (CBDT) has provided comprehensive guidelines for the
implementation of the Faceless Assessment Scheme 2019 (FAS 2019) through F. No.
173/165/2020-ITA-I dated 14.08.2020. These guidelines specifically mandate that field formations
of jurisdictional charges outside the National Faceless Assessment Centre (NaFAC)/Regional
Faceless Assessment Centers (ReFACs) hierarchy are responsible for performing judicial functions,
including defending writ petitions.
In light of these administrative directions and legislative changes, all judicial functions,
including the defence of writ petitions, shall be carried out by the jurisdictional Income Tax
Authorities. This direction is based on the fact that the original jurisdiction lies with the Jurisdictional
Assessing Officer (JAO), with concurrent jurisdiction vested in the NaFAC under sub-section (5)
of section 120 of the Act, specifically for the limited purpose of assessment

A. SOP for PCIT Jurisdictional Charge being Nodal Coordinating Authority for
defending writ petitions arising from the assessment/penalty proceedings pending before
NaFAC:

PCIT (JAO) is responsible for handling writ petition matters with the support of the Pr. CCIT’s
office, CIT (Judicial) of the region, and the concerned PCIT (ReFAC) (AU). Since the case records
during the proceedings before NaFAC won’t be visible to the PCIT (Jurisdictional), inputs and
parawise comments will be provided by the PCIT (ReFAC) (AU).

In such cases, the following steps should be followed:

1. Immediate Notification:
- Information about the filing of a Writ Petition before the jurisdictional High Court
should be forwarded by the CIT (Judicial) or PCIT (Jurisdictional) to CIT (NaFAC)-3,
New Delhi without any delay. Upon identification, the Writ Petition will be referred
to the concerned PCIT (ReFAC) (AU).

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 HAND BOOK ON JUDICIAL MATTERS

2. Identification of PCIT (ReFAC) (AU):

- On receiving information from the concerned Pr. CCIT (Jurisdictional), High Court
Cell, the High Court’s website, or any other source, CIT (NaFAC)-3, New Delhi will
request ITBA to identify the involved PCIT (ReFAC) (AU) immediately. Once identified,
the Writ Petition will be referred to the concerned PCIT (ReFAC) (AU).

3. Examination of Writ Petition:

- The PCIT (ReFAC) (AU) will review the Writ Petition in the context of the case’s facts
and applicable law. The PCIT (ReFAC) (AU) can access all case records, including
case history notes, through the status monitor.

4. Recording Parawise Comments:

- The PCIT (ReFAC) (AU) will examine the petitioner’s claims and record parawise
comments on the issues involved in the Writ Petition, cross-verifying with the information
available on the ITBA records. For any technical issues or processes, the PCIT (ReFAC)
(AU) may seek clarification from CIT ITBA.

5. Forwarding Comments:

- The parawise comments received from PCIT (ReFAC) (AU) will be forwarded to the
PCIT (Jurisdictional) and the office of Pr. CCIT with a request to take necessary
measures to defend the case before the High Court.

6. Seeking Specific Comments from NaFAC:

- The PCIT (ReFAC) (AU) will make a reference to NaFAC for specific comments in
the following cases:

- If any provision related to FAS 2019 or section 144B of the Act is challenged in the
writ or during arguments.

- If specific inputs on any policy issue are required.

- This reference should be made in the prescribed format (Annexure-A) and include
parawise comments of the PCIT (Jurisdictional) or PCIT (ReFAC) (AU) supported
with necessary documents like the Writ Petition, assessment order, and case history
notes.

7. Reference to NaFAC for Policy Issues:

- Reference to NaFAC on specific policy issues or provisions of FAS 2019/section 144B

should be made in exceptional circumstances requiring specific advice on policy
matters, not on case-specific facts. This should ideally be done within 5 days of receiving
the Writ Petition or immediately if the writ is scheduled earlier.

- General comments or directions from NaFAC should be avoided.

55
8. Authorization to Defend the Case:

- NaFAC will authorize the PCIT (Jurisdictional) to defend the case, give directions
regarding the arguments, and decide the stand to be taken before the High Courts.
Parawise comments, inputs, and instructions to counsel (if required) will be provided
by PCIT (ReFAC) (AU) to PCIT (JAO) in such cases.

B. SOP for PCIT (Jurisdictional) Charge being Nodal Coordinating Authority for
defending Writ Petitions arising from the assessment/penalty orders completed by NaFAC:

1. Initial Examination:

- Upon receiving a Writ Petition, the PCIT (Jurisdictional) must examine it in the context
of the case facts and applicable law. Access all case records and history notes through
the status monitor, providing comprehensive comments based on all relevant facts and
legal issues.

2. Detailed Analysis:

- Review the taxpayer’s petition and record parawise comments related to the issues in
the writ petition. Cross-verify these with the information available in ITBA. If technical
issues arise, seek clarification from CIT ITBA.

3. Coordination with PCIT (ReFAC) (AU):

- If necessary, the PCIT (Jurisdictional) can seek comments from the PCIT (ReFAC)
(AU) who issued the assessment order. Provide written reasons and request unmasking
of the AU from NaFAC (email: <[email protected]>, cc: Addl.CIT-
3(1) NaFAC <[email protected]> & DCIT 3(2)(2) NaFAC
<[email protected]>). Post-unmasking, coordinate via email/
faceless ITBA communication.

4. Reference to NaFAC:

- Make references to NaFAC for:

- Challenges related to FAS 2019, section 144B of the Act, or FPS 2021.

- Policy-specific inputs.

- Follow the same protocol as in para (A)(6). These references should be exceptional,
focused on policy advice, not case facts, ideally within 5 days of receiving the writ or
sooner if necessary. Avoid general comment requests.

5. Handling Natural Justice Violations:

- If High Courts set aside cases due to natural justice violations, instruct the JAO to
create set-aside proceedings in ITBA. Request ITBA to reallocate the case to FAO
after creation.

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 HAND BOOK ON JUDICIAL MATTERS

6. Unfavourable High Court Orders:

- Decide on appeals or stay applications before a division bench for single bench orders,
or filing SLPs, in line with guidelines from Pr. DGIT (L&R) and CBDT.

7. Further Action on Unfavorable Orders:

- If the High Court’s unfavorable order pertains to ongoing NaFAC proceedings, obtain
inputs from Pr. CIT (ReFAC) (AU) to decide on the order’s acceptability.

3. Common issues noticed in Handling of Writ Petitions: -

Generally, the tendency of the JAO is to defend the Assessment order at any cost. While it’s a
noble pursuit, it should not come at the cost of facts of the case.

● Some issues in assessment may be due to the Faceless AO’s actions-

o not granting enough time with the final notice.

o not taking submissions of the assessee into consideration while passing the
draft/final order etc, even when it has come long back.

o Passing order u/s 144 when submissions are on record.

● Some issues in assessment maybe due to Technical issues-

o AO gave a certain time and date for compliance while system automatically
set the time to 23:59 hrs of that day.

o The submissions were not reflected on the system on the date of passing of
order, but it reflected later and with the date and time stamp of the assessee’s
submission, not with when it reflected on AO’s screen.

4. STEPS TO BE TAKEN WHEN A WRIT PETITION IS RECEIVED: -

1. Immediate Actions upon Receiving the Writ Petition
i. Open a new file in the office of the Principal Chief Income Tax (PCIT).
ii. Assign a proper identification number (with the WP. NO. allocated by the Hon. High
Court).
2. Jurisdictional Verification:
- Check jurisdiction to ascertain if the petitioner is assessed within the jurisdiction.
- If the answer is “NO”:
- Ascertain the correct jurisdiction.
- Transfer the writ petition to that jurisdiction.
- Update the records accordingly.

57
- If the answer is “YES”:
- Check and note all the respondents involved.
- Inform and forward a copy of the writ petition to all respondents.
- Gather inputs from all respondents.
- Send a proposal to the PCIT to engage Special Counsel (SSC)/Additional Solicitor
General (ASG)/special Counsel.
- Send the Vakalatnama/Docket/copy of the writ petition to the SSC authorized by the
Principal Commissioner of Income Tax (Pr.CIT).

- Take possession of the original records pertaining to the case.

- Update the pendency of the Writ Petition in the workflow of ITBA.

- Read and thoroughly understand the averments made in the petition.

I. Responses to a Writ Petition:

i. Filing of a Statement: If the assessee seeks directions from the court to ensure that the
Departmental Officer disposes of a pending application within a specified time limit, a mere
statement in reply would suffice.

ii. Cases not covered in (a) above:

- Prepare parawise comments after verifying the averments raised with the original
records in possession, either accepting or rejecting the averments made.

- Ensure that parawise comments are based on facts on record.

- Rebut case laws with facts on record or differentiate the laws in the case.

- Concluding comments should clearly elucidate the stand taken by the Department.

II. Challenges to Principles of Law/Constitutional Validity or Writ against

Order u/s 119(2) of the Act:
Seek inputs from the Board (ITJ) section and incorporate them into the Affidavit in reply [Instruction
no 07 dated 25/04/2011].

III. Preparation and Filing of Affidavit in Reply:

Once parawise comments are prepared (after collating inputs from other respondents and the Board
where inputs are sought), seek the approval of the Principal Commissioner of Income Tax (Pr.
CIT) concerned.

Forward the said comments to the Standing Counsel (SC) for the preparation of the affidavit in
reply.

Ensure that the affidavit in reply is filed before the next hearing date.

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 HAND BOOK ON JUDICIAL MATTERS

IV. Next Hearing Date Preparation:

Check the next date of hearing and brief the SSC/Additional Solicitor General (ASG)/Special
Counsel.

V. Affidavit in Reply Filing:

Prepare and file an affidavit in reply against each writ received before the ensuing hearing date

Points to be noted.

A. Factual inaccuracy in the Affidavit in reply can lead to the Court imposing cost or even
lead to the Court starting a perjury proceeding against the Officer filing the Affidavit.

B. Keep track of the hearing dates and interim orders issued by the Hon. High Court and
ensure that the interim directions issued by the Hon’ble High Court are duly compiled
and timely instructions are issued to the counsels.

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 Chapter-IV
ACTION TAKEN AFTER DISPOSAL OF
WRIT PETITION

1. Dismissal of Writ Petitions:

Upon receiving a favourable decision leading to the dismissal of the Writ Petitions, immediate
steps should be taken to update ITBA and complete any pending processes that initially led to the
filing of the writ.

2. Set Aside Directions by High Court:

When the High Court sets aside a case back to the file of the Assessing Officer, the PCIT
(Jurisdictional) should instruct the Jurisdictional Assessing Officer (JAO) to create a set-aside
proceeding in ITBA promptly. Furthermore, request ITBA to reallocate the case to the First
Appellate Authority (FAO).

3. Petition Allowed by High Court:

In cases where the petition is allowed by the High Court, the Principal Commissioner of Income
Tax (Pr. CIT) (Jurisdictional) should make a decision on filing further Special Leave Petition
(SLP) or stay application before the division bench (if the order is from a single bench) or based
on existing guidelines issued by Pr. DGIT (L&R) and CBDT

a. If an unfavourable order is received in a case pending before NaFAC, seek inputs and
comments from Pr. CIT (ReFAC)(AU) for determining the acceptability of the order.

b. The timeline for forwarding the proposal for filing an SLP is 21 days from the passing
of the order.

1. Use the IAMS Portal and also update the IAMS Portal as per the status of the Writ
Petition.

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 Chapter-I

PROSECUTION

Launching of prosecution in relation to various offences under the Income-tax Act is intended
to make enforcement of Direct tax laws more effective. Imposition of penalty has not been found
to be adequate deterrent to check tax evasion and in enforcing tax laws. There may also be occasions
to initiate prosecution proceedings under various sections of IPC independently or in addition to
prosecution under the Income Tax Act, 1961.

1. OFFENCES LIABLE TO PROSECUTION.

I. Liable to be prosecuted-

i. Any individual who commits an offense is under various provisions of IT Act subject to
prosecution, regardless of whether they are an assessee under the Income-tax Act. In cases
involving offenses committed by entities such as companies, firms, associations of persons,
or bodies of individuals, every person in charge or responsible for conducting the business
of the entity, as well as the entity itself, is deemed to be guilty. Similarly, in the case of
offenses by a Hindu Undivided Family, the Karta of the family is deemed to be guilty of the
offense.

ii. If an offense under the Income-tax Act is committed by a company, and the prescribed
punishment includes imprisonment and fines, the company shall be penalized with fines.
Additionally, any person mentioned in subsection (1) of section 278B, or any director,
manager, secretary, or officer of the company mentioned in subsection (2) of section 278B,
may be subject to legal proceedings and penalties as per the provisions of the Act.

2. SECTIONS RELATING TO PROSECUTION: -

Sections 275A to 280 of the Income Tax Act, 1961 provide for various types of offences for
which the Department can prosecute an assessee.

a. Section 275A - Contravention of order made u/s. 132(1) (Second Proviso) or section
132(3) in the case of search & seizure.

b. Section 275B - Failure to afford necessary facility to authorised officer to inspect books
of account or other documents as required under section 132(1)(iib).

c. Section 276 – Removal, concealment, transfer or delivery of property to thwart tax

recovery.
61
 d. Section 276A – Failure to comply with provisions of section 178(1) and (3) – re:
company in liquidation.

e. Section 276B - Failure to pay to credit of Central Government (i) deducted at source
under Chapter XVII-B or (ii) tax payable u/s.115-O(2) or proviso to section
194B,194R(1),194S(1) or 194BA(2) of the Act.

f. 276BB- Failure to pay to the credit of the Central Government , the Tax collected at
source as per Section 206C of the I.T Act.

g. Section 276C – Willful attempt to evade tax, penalty or interest chargeable or imposable
for under-reporting of Income.

h. Section 276CC – Willful failure to furnish returns.

i. Section 276D – Willful failure to produce accounts and documents.

j. Section 277 – False statement in verification or delivery of false account, etc.

k. Section 277A – Falsification of books of account or document, etc., to enable any other
person to evade any tax, penalty or interest chargeable/leviable under the Act.

l. Section 278 – Abetment of false return, account, statement or declaration relating to

any income or fringe benefits chargeable to tax.

m. Section 278A – Second and subsequent offences under section 276B, 276C (1), 276CC,
277 or 278.

n. Section 278AA – No person shall be punished for any failure if he proves that there
was reasonable cause for such failure.

o. Section 278B – Offences by companies.

p. Section 278C – Offences by HUF

q. Section 280(1) – Disclosure of particulars by public servants in contravention of section

138(2) {Prosecution to be institutes with previous sanction of Central Government
under section 280(2)].

r. 276 BB- Failure to pay to the credit of the Central Government the Tax collected at
source under section 206C of the IT Act.

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 Chapter-II
LAUNCHING PROSECUTION

1. GENERAL ISSUES RELEVANT TO PROCEDURE FOR

LAUNCHING PROSECUTION:

The Central Board of Direct Taxes, through Circular No. 24/2019 dated 09.09.2019, has outlined
guidelines for a streamlined process in identifying and evaluating cases for prosecution related to
Direct Tax Laws.

Place of Prosecution:

As stated in paragraph 7(i) of the Standard Operating Procedure (SOP) from 27.06.2019,
complaints are to be filed in the court with jurisdiction. Section 177 of the Criminal Procedure
Code (Cr.P.C.) stipulates that offenses are generally tried by the Court within whose jurisdiction
the offense occurred. This provision extends to offenses under Direct Tax laws as well.

Authority Competent to Launch Prosecution:

The field authorities responsible for identifying and initiating prosecution proceedings are
outlined in paragraph 3.2 of the Standard Operating Procedure (SOP) dated 27.06.2019. Here are
the key points regarding the competent authorities for launching prosecution:

i. Authority under Whose Jurisdiction Offence Was Committed:

The assessing officer, who has jurisdiction over the assessment, is the authorized person to
initiate prosecution with the prior sanction of the Principal CIT/CIT having jurisdiction over the
case. It is immaterial whether the assessing officer conducted the assessment personally or not.
Similarly, in cases of TDS default, the assessing officer with jurisdiction over the TDS matter can
initiate prosecution.

ii. Prosecution by Authority Presented with False Evidence:

An important aspect is that the authority presented with false evidence can also initiate
prosecution. For instance, if a statement under oath recorded by an ADIT/DDIT/authorized officer
is found to be false, then the concerned ADIT/DDIT/AO can initiate prosecution with the prior
sanction of the Principal CIT/CIT/Principal DIT/DIT having jurisdiction over such individual.

iii. Prosecution under Sections 193 and 196 of IPC:

Prosecution under sections 193 and 196 of the Indian Penal Code (IPC) can only be initiated by
the officer before whom the offense occurred. This officer could be a revisional authority, first

63
appellate authority, or assessing officer/ADIT/DDIT. However, section 195(1)(a) of the Criminal
Procedure Code (Cr.P.C.) allows a superior authority to the officer before whom the offense
occurred to also initiate prosecution.

Authority Competent to Grant Sanction for Prosecution:

The procedure for granting sanction under section 279(1) is outlined in paragraph 5 of the
Standard Operating Procedure (SOP) dated 27.06.2019. Here are the key points regarding the
competent authority to grant sanction:

i. Authority for Sanction under Section 279(1):

The Principal Commissioner, Commissioner, Commissioner (Appeals), or the Appropriate

Authority as defined in clause (C) of section 269UA is empowered to grant sanction under section
279(1) of the Income Tax Act for launching prosecution under various provisions of the IT Act.

ii. Direction from Higher Authorities:

Under the proviso to Section 279(1), the Principal Chief Commissioner, Chief Commissioner,
Principal Director General, or Director General may also provide directions for initiating
prosecution proceedings to the aforementioned Income Tax authorities.

iii. Sanction for Prosecution under IPC:

There is no statutory requirement to obtain previous sanction for prosecution under different
sections of the Indian Penal Code (IPC). However, the authority competent to grant sanction for
prosecution under the Income-tax Act shall also provide administrative sanction for prosecution
under IPC.

iv. Role of Sanctioning Authority:

If the sanction is granted by the competent authority and includes the facts constituting the
offense and the grounds of satisfaction, the sanctioning authority does not need to be a prosecution
witness. However, if the prosecution sanction is challenged by the defense on grounds such as
competence of the sanctioning authority or lack of application of mind, the trial court may summon
the sanctioning authority under section 311 of the Criminal Procedure Code (Cr.P.C.).

v. Collegium System for Approval:

Circular No. 24/2019 dated 09.09.2019 prescribes a collegium system comprising two CCIT/
DGIT rank officers, including the CCIT/DGIT in whose jurisdiction the case lies, to provide prior
administrative approval to the Sanctioning Authority before initiating prosecution in most cases.
This system ensures that prosecution proceedings are initiated only in deserving cases. The
Principal CCIT(CCA) concerned may issue directions for forming the collegium of CCsIT/DGIT
for this purpose, and any disagreements are resolved as per the guidelines outlined in the circular.

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 HAND BOOK ON JUDICIAL MATTERS

I. No Limitation for Launching Prosecution under Income-tax Law:

While Section 468 of the Criminal Procedure Code sets a three-year limitation for launching
prosecution, offences under the Income-tax Act and Wealth-tax Act are exempt from this limitation.
However, it’s important to note that newly introduced provisions like Securities Transaction Tax
and Banking Cash Transaction Tax are not exempt from this limitation. Although there’s no
statutory time limit, the Hon’ble Bombay High Court has quashed prosecutions due to unreasonable
delays, as seen in the case of KMA Ltd vs Sundararajan ITO (1996) Tax LR 248 (Bom).

II. Prosecution under Income-tax Law vis-a-vis IPC:

a. Prosecution under the Income-tax Act is distinct and more tailored to tax-related
violations.
b. Section 278A mandates harsher penalties for repeat offences, even if they are under
different sections.
c. Section 278AA shifts the burden of proving reasonable cause to the accused for specific
offences.
d. Section 278E includes a presumption of a culpable mental state, which can be challenged
by the accused.
e. Section 278B clarifies the liability of companies and individuals responsible for business
conduct, setting standards for due diligence.
f. Section 279(2) allows for compounding of offences under the Income-tax Act, unlike
IPC offences that cannot be compounded and may only be withdrawn with court
approval.

2. PROCEDURE FOR LAUNCHING OF PROSECUTION: -

The detailed procedure for launching prosecution in case of offences related to TDS/TCS
is governed by SOP dated 18.10.2016 and in case of all other offences the same shall be
governed by SOP dated 27.06.2019. The brief procedure for launching prosecution is as discussed
in these Paragraphs:

I. Steps for launching prosecution The process begins with the ADIT/DDIT/Authorized
officer/ Assessing officer/TRO identifying the case as per prosecution guidelines or based on
available evidence. A proposal containing case facts, identified offences, and case records are then
sent to the Pr.CIT/CIT with jurisdiction for approval.
i. The Pr.CIT/CIT reviews the proposal’s feasibility for prosecution considering the
case’s facts. If deemed fit, the Pr.CIT/CIT issues a notice under Section 279(1) of the
IT Act (or otherwise for IPC offences) to the assessee, informing them of the proposed
action and requesting their version within a stipulated time.
ii. After the notice period expires:
- If no response is received, the Pr.CIT/CIT proceeds based on available facts.

- If the assessee responds, further action is taken accordingly.

65
 iii. If the assessee seeks compounding of the offence, they are advised to submit the
compounding application within a specified time. Failure to do so prompts the sanctioning
authority to proceed without delay. If the compounding application is received, it
follows guidelines for compounding of offences.

iv. If the assessee’s reply does not request compounding and is not deemed fit for prosecution
after review, prosecution may not be launched, with reasons recorded.

v. Upon satisfying the offence’s elements, the Commissioner may grant sanction under
Section 279(1) of the Act. In certain cases, prior approval of a Collegium of two CCIT/
DGIT rank officers is required. The sanctioning order should reflect careful consideration
of facts and adherence to Section 278AA provisions.

vi. If there’s doubt regarding the prosecutability of the offence after considering facts and
replies, the Commissioner may seek the Special Public Prosecutor’s opinion. This
opinion assists but isn’t binding for granting prosecution sanction.

II. Important aspects regarding preparation of the proposal for prosecution-

Para 4 of SOP dated 27.06.2019 deals with procedure to prepare proposal for Prosecution. The
Proposal shall be prepared in Form A which is attached to SOP as Annexure-1.

In preparing such proposals following aspects may be kept in mind: -

i. The AO is required to study the entire records of a delinquent assessee with special reference to
the following: -

a. Background of the case with particular attention to past lapses

b. Stages of the relevant proceedings from the issue of the notice requiring submission
of return to the completion of assessment and finalisation of penalty proceedings.

c. Appellate Proceedings.

d. Identification of documentary evidence like notices, return, statement of accounts etc.

e. Identification of other documentary evidences

f. Identification of departmental witnesses

g. Identification of outside witnesses

h. Expert testimony, if any

i. Identification of corroborative evidence.

ii. After study of records a proposal in prescribed proforma shall be drafted incorporating all the
required details as provided in the proforma enclosed as Annexure-1 of SOP, strictly following the
instructions to fill the proforma.

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 HAND BOOK ON JUDICIAL MATTERS

III. Safeguards in granting sanction for prosecution u/s 279(1) of the IT Act-

The Standard Operating Procedure (SOP) dated 27.06.2019 outlines important aspects of
mandatory sanction under section 279(1) of the Income Tax Act. Here are some safeguards to
consider when granting such sanction:

1. Application of Mind:

- The sanction order under section 279(1) should clearly show that it was issued after careful
consideration of the available materials. The authority granting sanction must have genuinely
applied its mind to the facts of the case.
2. Purpose of Safeguard:

- The purpose of requiring sanction is to prevent frivolous prosecutions and to allow the
authority to determine the necessity and appropriateness of prosecution based on the specific
circumstances of each case. The sanctioning authority should demonstrate in the sanction
order that they have indeed considered all the facts before granting sanction.
3. Precedents and Legal Validity:

- There have been cases where complaints were dismissed due to improper or insufficient
sanction. The sanction order should be robust enough to withstand legal scrutiny and not
be found defective or lacking in a court of law.
4. Separate Sanction for Each Offence:

- Each offence should have a separate sanction, even if the order is the same. For instance,
if sanction is granted for an offence under section 276C but proceedings are initiated under
section 277, the proceedings may be deemed invalid and could be quashed.
5. Year-wise Sanction:

- Similarly, under section 279(1) of the Income Tax Act, separate sanction should be given
for each assessment year through distinct orders specifying each offence separately.

These safeguards ensure that the sanctioning process is thorough, legally sound, and aligned
with the requirements of the law, reducing the risk of challenges or dismissals based on sanction-
related issues.

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 Chapter-III
IMPORTANT ASPECTS IN THE PREPARATION
OF COMPLAINT

1.1. Important aspects in the preparation of complaint: -

Important aspects in the preparation of a complaint are outlined in Para 6 of the SOP dated
27.06.2019. Since the complaint forms the basis of prosecution proceedings, it should be
meticulously prepared with the following considerations:

a. Foundation of Prosecution:
The complaint serves as the foundation of a prosecution proceeding. It should be drafted in a
manner that would convince a person of reasonable intelligence about the commission of the
offence by the accused.

b. Charging Section Mention:

The complaint should clearly mention the appropriate charging section of the Income Tax Act
as well as the Indian Penal Code (IPC). This aids the Magistrate during the framing of charges
and ensures legal accuracy.
c. Signature by Competent Officer:
The complaint must be signed by the competent officer initiating the prosecution. This adds
legitimacy and accountability to the document.
d. Crucial Legal Sections:
For drafting the complaint, Chapter XVII of the Criminal Procedure Code (Cr.PC) is relevant,
specifically Sections 211 to 224. Familiarity with these sections ensures compliance with legal
procedures.
e. Separate Charges and Trials:
Section 218 of Cr.PC mandates a separate charge for each distinct offence and a separate trial
for each offence. However, Section 219 allows for multiple offences of the same kind, committed
within 12 months, to be charged and tried together in one trial if they fall under the same section
of the IPC or any special law, including the Income Tax Act.

1.2. Brief guidelines for proper drafting of complaints:

i. Before prosecution is launched, it is imperative that there must be a sanction for such
prosecution and that it should be at the instance of the authority enumerated in section
279(1) of the Act. Otherwise, prosecution is likely to be quashed.

ii. The place of commission of the offence shall specifically be discussed with the Prosecution
Counsel and accordingly the jurisdiction of the court should be mentioned.

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 HAND BOOK ON JUDICIAL MATTERS

iii. The correct names and complete addresses of the accused should be specifically mentioned.
This prevents delay in service of summons etc., by the court.

iv. The following should be annexed to the complaint:

a. Sanction order for prosecution
b. List of important documents / exhibits
c. List of prosecution witnesses.

v. It may be however noted; that prosecution can also furnish additional list of witnesses
during trial [section 204(2) of Cr.P.C]

vi. Chronological events leading to commission of offences should be spelt out. The evidence
collected during the investigation should be set out precisely so that the Magistrate is able
to appreciate the grounds to proceed with the case. Care, therefore, needs to be taken to
establish clearly the ingredients of the offence in the complaint.

1.3. Selection of evidence as exhibits -

In most prosecution trials, evidence in the form of books of account and documents plays a
crucial role. This evidence can be obtained during Income-tax proceedings, through submissions
by the assessee, or from third parties. It can also be obtained through impounding under sections
131(3) or 133A, or through seizure under sections 132(1) or 132A of the I.T. Act. Such records and
documents are considered admissible evidence in court. Key documents like the original and
amended returns, statement of accounts, and any statements by the assessee admitting an offense
or contradicting previous statements should be specifically listed as exhibits in the complaint.
Ensuring the safekeeping of these documents is important, with a preference for relying on
government, bank, or other authoritative documents.

Regarding digital or electronic evidence, the Supreme Court has relaxed the requirement of a
certificate under section 65B(4) of the Evidence Act in certain cases, such as when a party does not
have access to the device producing the document. In TDS cases under sections 276B/276BB, the
default sheet generated by the CPC-TDS System can be submitted as admissible evidence.

1.4. Selection of witnesses:

- It’s crucial to carefully select prosecution witnesses during the preparation of the complaint.
Instead of listing all possible witnesses for proving identical facts, prioritize those who
can easily appear before the court.
- The complainant officer should always be included as a witness.
- Independent witnesses like bank officers, government employees, or business associates
of the assessee should be preferred based on the circumstances of the case.
- Avoid relying on witnesses associated with the delinquent assessee or those relied upon
for their defend

69
2. Custody of records and evidence relating to Prosecution: -

Safe custody of evidence is a critical aspect highlighted in Para 8 of SOP dated 27.06.2019.
Many cases are lost due to the department’s failure to present evidence in court, emphasizing
the need for careful identification and preservation of material evidence for prosecution
proceedings.

I. Identification and Collection of Evidence:

- Any authority discovering fraud or serious tax evasion should proceed with further
investigations, considering the potential for prosecution. These cases are termed “potential
prosecution cases,” and evidence collection should be meticulous.
- Assessing Officers (AOs) must ensure that returns are filed correctly and signed by authorized
personnel. Documents submitted by the assessee should be properly signed and verified.
II. Custody of Original Records:

- Once prosecution proceedings are initiated, the entire original records should be kept in
personal custody, and further processing should be based on photocopies.
III. Handling of Certified Photocopies:

- Certified photocopies of relevant records should be given to the prosecution counsel at the
time of launching the prosecution. The prosecution counsel is responsible for presenting
these copies during each hearing.
- The original records remain in the personal custody of the complainant officer and their
successor after filing the complaint. They can be produced in court as required.
IV. Retention of Seized Material:

- Seized or impounded material relevant to prosecution proceedings should not be released

until the completion of those proceedings. Approval from the competent authority should
be obtained for its retention.
V. Documentation and Record Keeping:

- Upon initiating prosecution proceedings, the case name should be entered into the prosecution
register on ITBA by the AO/TRO/ADIT.

3. Publicity of Convicted cases:-

All cases, where prosecution proceedings launched by the Department have resulted in
conviction of the assessee should be given appropriate publicity by the Pr.CIT/Pr. DIT concerned.

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 Chapter-IV
OFFENCES UNDER VARIOUS OTHER ACTS

Black Money and Imposition of Tax Act, 2015

Prohibition of Benami Property Transaction Act, 1988
Comparative chart of prosecution under I.T Act vis-à-vis
Black Money Act & Benami Act

1. Prosecution provisions under the Black Money (Undisclosed

Foreign Income and Assets) And Imposition of Tax Act, 2015 (‘Black
Money Act’) :-
Nature of offence: In absence of any non-obstante clause (like section 279A of the Income-tax
Act) in the Black Money Act, the classification of offences under the Black Money Act shall be
governed by the Code of Criminal Procedure, 1973.

Part II of the First Schedule of the Cr. P.C. as reproduced below, which classifies “Offences
under other laws” (other than IPC), shall be applicable for offences under the Act.

Cognizable or non- Bailable or non-bail-

Offences
cognizable able
If punishable with death, imprisonment for Cognizable Non-bailable
life, or imprisonment for more than 7 years

If punishable with imprisonment for 3 years Cognizable Non-bailable

and upwards but not more than 7 years

If punishable with imprisonment for less than Non-cognizable Bailable

3 years or with fine only

The offences under sections 49 to 53 of the Black Money Act are punishable with a maximum
imprisonment for a term of at least seven years. Thus, in accordance with the classification of
Cognizable/Non-Cognizable and Bailable/Non-Bailable offences under the Cr.P.C., the offences
under Sections 49 to 53 of the Act are Cognizable and Non-Bailable offences.

Compounding: As against the compounding provision under the Income-tax Act, the Act does
not provide for compounding of offences. Thus, the offences under the Black Money Act are non-
compoundable.

71
 Prosecution provisions under the Black Money (Undisclosed Foreign Income and Assets)
And Imposition of Tax Act 2015

This section is identical to section 276CC of the

Income-tax Act. The punishment for wilful failure to
file the return of income u/s 139(1) before the expiry
Punishment for failure to furnish of the assessment year by a resident other than not
Section 49 return in relations to foreign income ordinarily resident, having any asset or, financial
and asset interest in any entity, located outside India as a
beneficial owner or as a beneficiary shall be rigorous
imprisonment from six months to seven years and
with fine.

This provision will apply if any person (resident),

Punishment for failure to furnish in as a beneficial owner or as a beneficiary, willfully
return of income, any information fails to furnish in return of income, any information
Section 50 about an asset (including financial about an asset (including financial interest in any
interest in any entity) located outside entity) located outside India. Punishment is rigorous
India imprisonment for a term of six months to seven years
and fine.

This section is identical to section 276C of the

Income-tax Act (except for the quantum of
punishment) and is applicable only for Residents
other than not ordinarily residents. As per the section
Punishment for wilful attempt to
Section 51 51(1), in case of willful attempt to evade any tax,
evade tax
penalty or interest chargeable or imposable under
the Act, the person is punishable with rigorous
imprisonment for a term from three years to ten years
and with fine.

This section is identical to section 277 of the

Income-tax Act except that there is no linkage with
Punishment for false statement in the quantum of evasion of tax. The punishment is
Section 52
verification rigorous imprisonment for six months to seven years
and fine. Application of this section is not limited to
“residents”.

This section is identical to section 278 of the

Income-tax Act except that there is no linkage with
the quantum of evasion of tax. The punishment is
Section 53 Punishment for abetment
rigorous imprisonment for six months to seven years
and fine. Application of this section is not limited to
“residents”

Presumption as to culpable mental This section is identical to section 278E of the

Section 54
state Income-tax Act.

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 HAND BOOK ON JUDICIAL MATTERS

Prosecution to be at the in- stance

of Principal Chief Commissioner This section is identical to section 279 of the Income-
or Principal Director General or tax Act. Sanction of the Principal Commissioner or
Section 55
Chief Commissioner or Director Commissioner or the Commissioner (Appeals) is
General or Principal Commissioner or required for filing prosecution u/s 49 to 53.
Commissioner

This section is identical to section 278B of the

Income-tax Act. However, in the definition of
Section 56 Offences by Companies Company, HUF has also been included (In the
Income-tax Act for offences by HUF a separate
Section 278C is provided

Proof of entries in records or This section is identical to section 279B of the

Section 57 documents Income-tax Act.

This section is identical to section 278A of the

Income-tax Act. However, punishment for second
and subsequent offences u/s and 49 to 53 is three
Punishment for second and
Section 58 years to ten years with fine which shall not be less
subsequent offences
than
Rs. 5 lakhs but which may extend to Rs. 1 crore

2. Prosecution provisions under the Prohibition of Benami Property

Transactions Act, 1988 (“Benami Act”)
For offences prior to the amendment of the Benami Act w.e.f.
Prohibition
Section 01.11.2016, entering into any benami transaction is punishable with
of benami
3 imprisonment for a term which may extend to three years or with
transactions
fine or with both.
Chapter VII - Offences and Prosecutions

Where any person enters into a benami transaction shall be

Penalty
Section punishable with rigorous imprisonment for a term from one year
for benami
53 to seven years and shall also be liable to fine which may extend to
transaction
twenty-five per cent of the fair market value of the property.

Any person who is required to furnish information under this

Penalty Act knowingly gives false information shall be punishable with
Section
for false rigorous imprisonment for a term from six months to five years and
54
information shall also be liable to fine which may extend to ten percent of the
fair market value of the property.

Section Previous
Sanction of the Board is required for filing prosecution
55 sanction
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Chapter VIII - Miscellaneous

Application of It clarifies that provisions of prosecution under the Benami Act

Section
other laws not are independent of and in addition to the provisions of prosecution
60
barred under any other law

Section Offences by This section is identical to the Section 278B of the Income-tax Act
62 Companies and covers Company, Firm, BOI and AOP but does not cover HUF

● There is no provision for compounding of offences like Section 279(2) of the Income-tax Act.
● There is also no provision corresponding to Section 278E of the Income-tax Act regarding
“Presumption as to culpable mental state”.
● The offences under the Benami Act are non-cognizable as mentioned in Section 61 of the Act.

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 Chapter-V
IPMS PORTAL

Integrated Prosecution Management System(IPMS)

1. INTEGRATED PROSECUTION MANAGEMENT SYSTEM

(IPMS):-
The Integrated Prosecution Management System (IPMS) is the website for information on
prosecution complaints filed by the Department. The information on this portal is for the exclusive
use of the Income Tax Department. IPMS provides the data of Mumbai Region as well as for all
the PCIT charges separately. The IPMS website provides the information in respect of the case, the
Advocate and the no. of hearings held in each case.

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76
 Chapter-I
NATIONAL COMPANY LAW TRIBUNAL AND
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
(NCLT & NCLAT)

1. Introduction
1.1 National Company Law Tribunal (NCLT):

The National Company Law Tribunal (NCLT) is a quasi-judicial authority constituted by Union
Government of India on 1 June 2016 under Section 408 of the Companies Act, 2013. Its primary
role is to handle corporate civil disputes arising under this Act. The NCLT possesses powers and
procedures similar to those of a court of law or judge.

1.2 Key Functions and Powers:

- Fact-Finding and Decision-Making: The NCLT is tasked with objectively determining

facts, deciding cases based on principles of natural justice, and issuing orders that
can correct wrongs, remedy situations, or impose legal penalties and costs.

- Orders and Impact: The orders issued by the NCLT can affect the legal rights, duties,
or privileges of the involved parties.

- Procedure: Unlike traditional courts, the NCLT is not bound by strict judicial rules
of evidence and procedure. It operates on principles of natural justice, providing a
more flexible approach to resolving disputes.

1.3 National Company Law Appellate Tribunal (NCLAT):

The National Company Law Appellate Tribunal (NCLAT) is designed to handle appeals against
the decisions made by the NCLT. It serves as an appellate authority to review and possibly alter
the decisions of the NCLT.

1.4 Key Functions and Powers:

- Appellate Review: The NCLAT reviews decisions taken by the NCLT on both factual
and legal grounds.

- Powers: It has the authority to set aside, modify, or confirm the decisions of the
NCLT.

- Intermediate Appellate Forum: The NCLAT acts as an intermediate appellate body,

with further appeals from its decisions being directed to the Supreme Court of India.

77
1.5 New Enforcement Mechanism: Place of Tribunals

The Companies Act, 2013, envisions a comprehensive enforcement mechanism where the
NCLT and NCLAT play crucial roles. The enforcement hierarchy is as follows:

1. NCLT: The primary tribunal for corporate civil disputes under the Companies Act,
2013.

2. NCLAT: The appellate body for reviewing NCLT decisions.

3. Supreme Court: The apex court where decisions of the NCLAT can be further
appealed.

This structure ensures a systematic approach to dispute resolution and enforcement under the
Companies Act, providing clear pathways for appeals and reviews, thereby enhancing the efficiency
and effectiveness of corporate legal proceedings in India.

The chart below provides a holistic view about the enforcement mechanism contemplated under
the Companies Act, 2013 and the place of Tribunals in this machinery.

1.6 Why NCLT & NCLAT required:-

The constitution of NCLT and NCLAT was a step towards to improving the ease of doing
business by bringing all aspects of Company law matters under one roof. Some of most important
advantages are as under:

a. Single Window: It is most important benefit that the tribunals will act as a single
window for settlement of all Company law related disputes effectively. It shall avoid
unnecessary multiplicity of proceedings before various authorities or courts.

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 HAND BOOK ON JUDICIAL MATTERS

b. Speedy Process: The NCLT and the NCLAT are under a mandate to dispose of the
cases before them as expeditiously as possible. In this context a time limit of three (3)
months has been provided to dispose of the cases with an extension of ninety (90) days
for sufficient reasons to be recorded by the President or the Chairperson, as the case
maybe. The speedy disposal of cases will save time, energy and money of the parties.

c. Reduction of work of High Court: The number of pending cases with High Court is
too high and now the matters in respect to compromise, arrangement, amalgamations
and winding-up transferred to NCLT. Accordingly, NCLT and the NCLAT will reduce
the work of overburdened High Courts.

1.7 Role of NCLT

1. Territorial Jurisdiction of NCLT

Territorial Jurisdiction of the

Sr. No Title of the Bench Location
Bench
(1) (2) (3) (4)
1. (a) NCLT, Principal Bench. New Delhi (1) Union Territory of Delhi
(b) NCLT, New Delhi
Bench.
2. NCLT Ahmedabad Bench. Ahmedabad (1) State of Gujarat(2) Union Territory
of Dadra and Nagar Haveli(3) Union
Territory of Daman and Diu
3. NCLT Allahabad Bench. Allahabad (1) State of Uttar Pradesh(2) State of
Uttarakhand
4. NCLT Bengaluru Bench. Bengaluru (1) State of Karnataka

79
 5. NCLT Chandigarh Bench. Chandigarh (1) State of Himachal Pradesh(2) State
of Jammu and Kashmir(3) State of
Punjab(4) Union Territory of
Chandigarh(5) State of Haryana
6. NCLT Chennai Bench. Chennai (1) State of Tamil Nadu(2) Union
Territory of Puducherry
7. NCLT Guwahati Bench. Guwahati (1) State of Arunchal Pradesh(2) State
of Assam(3) State of Manipur(4) State
of Mizoram(5) State of Meghalaya(6)
State of Nagaland(7) State of
Sikkim(8) State of Tripura
8. NCLT Hyderabad Bench. Hyderabad (1) State of Telangana

9. NCLT Kolkata Bench. Kolkata (1) State of Bihar(2) State of

Jharkhand(3) State of West Bengal(4)
Union Territory of Andaman and
Nicobar Island

10. NCLT Mumbai Bench. Mumbai (1) State of Maharashtra(2) State of

Goa
11. NCLT Jaipur Bench. Jaipur (1) State of Rajasthan.

12. NCLT Cuttack Bench. Cuttack (1) State of Chhattisgarh.(2) State of

Odisha.
13. NCLT Kochi Bench. Kochi (1) State of Kerala(2) Union Territory
of Lakshadweep
14. NCLT Indore Bench. Indore (1) State of Madhya Pradesh
15. NCLT Amravati Bench. Amravati (1) State of Andhra Pradesh

2. Subject Matter Jurisdiction- NCLAT

Act/Code Powers Description of Section

Section 410 of Hearing appeals The Central Government shall, by notification,

Companies Act, against orders of constitute, an Appellate Tribunal to be known as the
2013 NCLT
National Company Law Appellate Tribunal for
hearing appeals against, -

(a) the order of the Tribunal or of the National

Financial Reporting Authority under this Act;
and

(b) any direction, decision or order referred to in

section 53A of the Competition Act, 2002 in
accordance with the provisions of that Act.

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 HAND BOOK ON JUDICIAL MATTERS

Section 132 of Hearing appeal (5) Any person aggrieved by any order of the Nation-
Companies Act, against orders of al Financial Reporting Authority issued under clause
2013 read with National Financial
Section Reporting Authority (c) of sub-section (4), may prefer an appeal before the
410 Companies (NFRA) Appellate Tribunal
Act, 2013.

Section 53A of Hear and dispose (1) The Central Government shall, by any notifiction,
Competition Act, of appeals against establish an Appellate or Tribunal to be known as
2002 read with any direction issued Competition Appellate Tribunal, -
or decision made
Section 410 of or order passed by the to hear and dispose of appeals against any
Companies Act, the Competition direction issued or decision made or order passed by
2013 Commission of the Commission under sub-sections (2) and (6) of
India (CCI) section 26, section 27, section 28, section 31, section
32, section 33, section 38, section 39, section 43,
section 43A, section 44, section 45 or section 46 of
this Act;to adjudicate on claim for compensation that
may arise from the findings of the Commission or the
orders of the Appellate Tribunal in an appeal against
any finding of the Commission or under section 42A
or under subsection (2) of section 53Q of this Act,
and pass orders for the recovery of compensation
under section 53N of this Act.

Section 61 of Hearing appeal 1) Notwithstanding anything to the contrary contained

In- solvency against orders under the Companies Act 2013, any person aggrieved
Bankruptcy 2016 passed under IBC by the order of the Adjudicating Authority under this
read by NCLT part may prefer an appeal to the National Company
Law Appellate Tribunal.
with Section 32
of Insolvency (2) An appeal against an order approving a resolution
and Bankruptcy plan under section 31 may be filed on the following
Code. grounds, namely:-
(i) the approved resolution plan is in
contravention of the provisions of any law for the
time being in force;
(ii) there has been material irregularity in exercise
of the powers by the resolution professional during
the corporate insolvency resolution period;
(iii) the debts owed to operational creditors of the
corporate debtor have not been provided for in the
resolution plan in the manner specified by the Board;
(iv) the insolvency resolution process costs have
not been provided for repayment in priority to all
other debts; or
(v) the resolution plan does not comply with any
other criteria specified by the Board.

81
Section 202 of Hearing appeals Any insolvency professional agency which is
Insolvency and against the aggrieved by the order of the Board made under
Bankruptcy orders passed section 201 may prefer an appeal to the National
Code, 2016 by Insolvency Company Law Appellate Tribunal
and Bankruptcy
Board of India
with respect to
insolvency
professional
agencies.
Section 211 Hearing appeals Any information utility which is aggrieved by the
of Insolvency against the order of the Board made under section 210 may prefer
Bankruptcy orders passed an appeal to the National Company Law Appellate
Code, 2016 by Insolvency Tribunal.
and Bankruptcy
Board of India
with respect to
information utilities.

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 Chapter-II
MERGER & ACQUISITION IN THE LIGHT OF
INCOME TAX ACT, 1961

1. Introduction
Mergers and acquisitions (M&A) have emerged as significant tools for growth in Indian
businesses, playing a critical role in corporate strategy. These strategies enable companies to gain
market strength, expand their customer base, reduce competition, or enter new markets and product
segments. Companies may pursue mergers and acquisitions to:

- Access markets through established brands.

- Gain market share.

- Eliminate competition.

- Reduce tax liabilities.

- Acquire new competencies.

- Offset accumulated losses of one entity against the profits of another.

M&A transactions can be implemented by various modes of restructuring, both internal and
external, be it mergers, demergers, acquisition of shares, asset sale, buybacks, etc. Each mode of
restructuring comes with its own set of tax considerations.

A snapshot of commonly adopted restructuring strategies is pictographically depicted below.

83
A brief comparative summary of various restructuring options from
an Indian context is mentioned below:

By notification dated December 15, 2016, the Ministry of Corporate Affairs (“MCA”) notified
Section 233 of the CA, 2013 which provides for Fast Track Mergers (“FTM”). FTM is a new
concept which allows for mergers without the approval of the NCLT, in case of a merger between.

(i) two or more small companies,

(ii) holding company and its wholly-owned subsidiary, and (iii) such other class of
companies as may be prescribed.

An FTM only requires approval of the shareholders, creditors, liquidator and the Registrar of
Companies (“ROC”) which takes substantially lesser time than obtaining approval from the NCLT.

DEFINITIONS:

Merger: The term ‘merger’ has not been defined under the Act or the IT Act. Merger is the
process of combining two or more distinct entities in such a manner that it amounts to the
accumulation of the assets and liabilities of the said entities into one business entity.

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Amalgamation: Section 2 (1B) of the IT Act defines ‘amalgamation’ as the merger of one or
more companies into another company or the merger of two or more companies to form one
company in such a manner that the assets and liabilities of the amalgamating companies vest in the
amalgamated company.

The basic ingredients of amalgamation are as follows:-

1. all of the properties and liabilities of the amalgamating company or companies

immediately before the amalgamation becomes the properties and liabilities of the
amalgamated company by virtue of the amalgamation;

2. shareholders holding not less than 3/4 in value of the shares in the amalgamating
company or companies (other than shares already held therein immediately before the
amalgamation by, or by a nominee for, the amalgamated company or its subsidiary)
become shareholders of the amalgamated company by virtue of the amalgamation,

Demerger: The concept of ‘demerger’ has been elucidated in Section 2 (19AA) of the IT Act.
It means the transfer of a demerged undertaking by a demerged company to the resulting company
as a going concern, pursuant to a Scheme of Arrangement sanctioned under Sections 230 to 232 of
the Act.

The basic ingredients of demerger are as follows: -

1. All the properties and liabilities of the undertaking, being transferred by the demerged
company, immediately before the demerger, become the properties and liabilities of the
resulting company by virtue of the demerger. They are transferred at values appearing in
its books of account immediately before the demerger;

2. In consideration of the demerger, the resulting company issues its shares to the
shareholders of the demerged company on a proportionate basis;

3. The shareholders holding not less than 3/4th in value of the shares in the demerged
company (other than shares already held therein immediately before the demerger, or by
a nominee for, the resulting company or, its subsidiary) become shareholders of the
resulting company or companies by virtue of the demerger;

The transfer of the undertaking is on a going concern basis.

Undertaking: Explanation 1 to Section 2(19AA) of the IT Act prescribes that any part of an
undertaking/ unit/ division of a business activity taken as a whole without assigning values to the
individual assets and liabilities of the said business activity constitutes an ‘undertaking’ for slump
sale

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Modes of Merger:

TRIBUNAL GOVERNED - SCHEME OF ARRANGEMENT

A Scheme of Arrangement (“Scheme”) is an NCLT governed procedure involving an
agreement between two or more companies and its shareholders and creditors. The said Scheme,
if sanctioned by the NCLT is binding on the said companies, its shareholders, creditors, and all of
its stakeholders.

Earlier the forum for sanctioning of the Scheme was the Hon’ble High Courts. With effect from
01.06.2016, the Ministry of Corporate Affairs (“MCA”) notified the establishment of NCLT under
Section 408 of the Act. The jurisdiction to sanction the Scheme was vested with the NCLT on
15.12.2016.

A Scheme may involve mergers and demergers and is prepared in accordance with the provisions
of Sections 230-232 of the Act and accompanying rules thereto.

The tribunal governed procedure for sanctioning of Scheme between the transferor and
transferee companies as per the provisions of the Act read with Companies (Compromises,
Arrangements and Amalgamations) Rules, 2016 (“Rules”) is detailed hereunder

STAGE I - First Motion

S. No. Particulars
A first motion petition is jointly filed before the NCLT by the transferor and the
1.
transferee companies along with the copy of the Scheme of Arrangement.
The NCLT may admit the first motion petition and direct or dispense with meetings
2. of the creditors and shareholders of the transferor and transferee companies.

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If a meeting is required, a notice along with the Scheme and Explanatory Statement
is served to the Regional Director, Registrar of Companies, Income Tax Authorities,
Official Liquidator, and other relevant regulators as directed by the NCLT.
3.
These authorities have 30 days to submit representations to the NCLT. If no
representation is made within this period, it is assumed they have no objections to
the Scheme.
The companies must publish the meeting notice as an advertisement in two newspapers
4. and send individual notices to the creditors/shareholders as directed by the NCLT.

The Chairperson must file an Affidavit of Service before the NCLT, confirming that
all NCLT directions regarding the issuance of notices and publication of advertisements
5.
for convening the meeting have been complied with by the companies.

A meeting of shareholders/creditors is convened as directed by the NCLT. The

6. Scheme must be approved by a special majority (75% in value of the members) as
per Section 230(6) of the Act.

The meeting result is determined by voting. A report must state the number of
7. creditors/shareholders present and voting, either in person, by proxy, or electronically,
along with their individual values and voting choices.

The Scrutinizer and the Chairperson appointed by the NCLT are required to submit
8. their Reports with respect to the meeting before the NCLT.

STAGE II - Section Motion

Pursuant to the aforesaid compliances, a second motion petition is filed by the

9. companies before the NCLT seeking approval of the Scheme.

The NCLT may issue Orders admitting the second motion petition and set a date for
the final hearing. A Notice of the hearing date for the second motion petition must
10. be advertised in the same newspaper as the meeting notice, unless otherwise directed
by the NCLT.

Reports from regulatory/statutory authorities are submitted to the NCLT for approval
11. of the Scheme. Queries raised by authorities must be addressed before NCLT
approval.”

The NCLT may pass an order sanctioning and approving the Scheme, with its contents
12. binding on creditors, shareholders, and stakeholders of both the transferor and
transferee companies.

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Tax implications on a Scheme:
A transaction involving a merger and demerger is generally considered as tax neutral transaction
as Section 47 of the IT Act exempts such transactions from the purview of ‘transfer’. Hence, such
transactions are not amenable to capital gains tax. Further, carry forward and set off accumulated
tax business losses as mentioned in Section 72A of the IT Act is available in the case of Schemes.

2. Different Cases of Corporate Restructuring and their Tax Issues.

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 Chapter-III
IMPORTANT POINTS TO CONSIDER IN MERGER/
AMALGAMATION CASES

Possible issues in Merger:

1. Valuation Accuracy and Tax Implications: To ensure accurate tax assessments during
mergers, it is imperative that proper valuation methods are employed. Incorrect valuations
can lead to significant tax implications and tax avoidance schemes. A thorough scrutiny
of valuation practices needs to be ensured so that they comply with tax laws and regulations
and avoid any tax avoidance schemes.

2. Mergers Involving Foreign Shell Companies: Transactions involving shell companies

established abroad and merging with Indian entities require careful examination to verify
compliance with domestic tax regulations, foreign investment guidelines, and anti-avoidance
provisions.

3. Tax Liability of Merging Entities: Assess mergers involving a company with substantial
income tax dues and a loss-making entity to ensure transparency and adherence to tax
obligations, preventing concerns about tax evasion or avoidance.

4. Legitimate Business Purpose of Mergers: Review the business rationale behind mergers
to ascertain their legitimacy beyond tax benefits, ensuring they are not used solely for tax
planning purposes, such as setting carry forward losses against future profits.

5. Payments to Promoters and Tax Compliance: Scrutinize any payments made to promoters
as part of a merger to ensure they are not aimed at tax avoidance. Ensure transparent
disclosure and documentation of such payments to uphold tax compliance standards.

6. Section 79 Benefits and Loss Carry Forward: Diligently evaluate mergers undertaken
for the purpose of availing benefits under tax provisions like Section 79. Ensure proper
valuation methods and business justifications to prevent abuse of tax benefits.

Possible issues in Demerger:

I. Demerger as a Tax Strategy: Investigate demergers as potential strategic tax planning tools
used to manage or avoid capital gains tax liabilities on assets being hived off.

II. Potential for Slump Sale via Demergers: Examine the possibility of demergers being
utilized as a means to conduct slump sales, especially when assets are transferred at lump
sums without individual valuation.

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 III. Demergers for Ownership Restructuring: Review demergers undertaken for ownership
restructuring purposes, particularly those aimed at facilitating the entry of new shareholders
at a later date.

IV. Corporate Veil Lifting Consideration: Consider lifting the corporate veil in cases where
there are suspicions of demergers being misused for tax evasion or illicit purposes.

V. Importance of Accurate Valuation: Ensure accurate valuation in demergers, both for the
undertakings retained by the company and the assets hived off.

VI. Scrutiny for Genuine Undertakings: Scrutinize demergers to determine whether they
involve genuine undertakings or if assets are being transferred under the guise of an
undertaking to avoid taxes.

Reduction in Capital:

I. Selective Reduction and Valuation Impact: In cases of selective reduction where one set of
shareholders is paid and their shares are cancelled, it is important to evaluate whether the
valuation has been reduced to benefit the existing shareholders. This assessment is crucial
to ensure fairness and transparency in the reduction process.

II. Utilization of Share Premium Account: Investigate instances where the share premium
account is set off against capital during a reduction of share capital. Verify if there is
sufficient capital to support such adjustments and ensure compliance with relevant tax
regulations.

III. Reduction Route to Avoid Buy Back Tax: Examine whether the reduction route is being
used as a strategy to avoid buyback tax liabilities. Assess the motive behind the reduction
and ensure that it is not being misused to circumvent tax obligations.

IV. Selective Reduction and Benefit to Remaining Shareholders: Consider whether the selective
reduction benefits the remaining shareholders in a fair and equitable manner. Evaluate the
impact of the reduction on the overall ownership structure and shareholder rights.

1. Points to be Considered by the Assessing Officer When Reviewing

a Merger Scheme Submitted for Approval

1. Abridged Scheme of Amalgamation:

- Ensure that a copy of the “abridged” scheme of amalgamation is furnished.

2. Commercial Rationale:

- Review the commercial rationale for the proposed amalgamation to understand its purpose
and benefits.

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3. Nature of Business:

- Assess the nature of business in respect of each company involved in the amalgamation.

4. Synergy Expected:

- Evaluate the synergy expected from the amalgamation, including potential benefits such
as enhanced market share, improved efficiencies, and cost savings.

5. Appointed Date:

- Confirm the ‘appointed date’ of amalgamation and ensure it is justified, especially if it is

ante-dated.

6. Financial Statements:

- Examine the standalone financial statements of each company before amalgamation and
the consolidated financial statements of the company after amalgamation.

7. Tax Consequences:

- Analyze the tax consequences both before and after the amalgamation to ensure compliance
and identify any potential tax liabilities or benefits.

8. Statement of Total Income:

- Verify the statement of total income with working notes for all companies for the latest
assessment year for which the return has been filed.

9. Losses, Unabsorbed Depreciation, and MAT Credit:

- Check the details of all losses, unabsorbed depreciation, and MAT credit carried forward
in respect of each company for previous Assessment Years

10. Compliance with Section 2(1B) of the Income Tax Act:

- Ensure the arrangement satisfies the definition of “Amalgamation” under section 2(1B) of
the Income-tax Act, 1961.

11. Compliance with Section 72A(2) of the Income Tax Act:

- Confirm that the arrangement meets the conditions prescribed under section 72A(2) of the
Income-tax Act, 1961.

12. Shareholding Structure:

- Review the shareholding structure in respect of each company before and after the
amalgamation.

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13. Outstanding Statutory Dues:

- Assess the details of outstanding statutory dues in respect of each company under the
Income-tax Act, 1961.

14. Valuation Report:

- Verify the valuation report to ensure the fair valuation of assets and liabilities.

15. Treatment of Assets and Liabilities:

- Evaluate the treatment of assets and liabilities in the amalgamation process.

16. Treatment of Written-off Bad Liabilities:

- Consider the treatment of written-off bad liabilities to ensure proper accounting and
compliance.

Proforma Points for filing report before The Hon’ble NCLT in Merger Cases

Sl. Nos. Components of the Proposal Observation of the AO

1 Details of proposal

2 Details of benefit as stipulated in the scheme

Details of any Proceedings pending against

3
applicant company under the income tax Art

Details of tax demand pending for recovery

4
(Year wise amount outstanding)

Details of pendency of investigation / enquiry

5
proceedings, if any

Whether proposed scheme will impact

allowability of carry, forward losses or
6 unabsorbed depreciation or any benefits under
the IT Act, if yes quantify the amount of tax
effect in compliance of section 72A

Whether the proposed scheme will have any

7 im- pact of exemption of capital gain tax /
dividend distribution tax

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Whether in view of the assessing officer prima

8 facie GAAR provisions appear to be attached in
the scheme of arrangement

Comments on Valuation Report attached to the

9
scheme

In case of reverse merger where loss making

company continues to exist and profit making
company dissolves to reduce its tax. What is the
10
specific reasons for continuation of loss making
company? Need to examine applicability of
provisions of GAAR

11 Details of ITRs filed by the Company

Whether scheme is opposite to public policy

(need to examine the whether promoters
are only getting benefit and also examine -
12
if possible quantum of tax evaded which is
proposed to be avoided through the scheme of
arrangement

2. Lodging of caveat before NCLT

2.1. Lodging of caveat: -

Any person may lodge a caveat in triplicate in any appeal or petition or application that may be
instituted before this appellate tribunal by paying a fee of rupees thousand Rs. 1000/- only after
forwarding a copy by registered post or serving the same on the expected petitioner or appellant.

Caveat shall be in the form given below and shall contain such details and particulars or orders
or directions, details of authority against whose orders or directions the appeal or petition or
application is being instituted by the expected appellant or petitioner or applicant which full
address for service on other side, so that the appeal or petition or application could be served
before the appeal or petition or interim application is taken up.

The caveat shall remain valid for a period of ninety days from the date of its filing under

Rule 25 of NCLT Rules, 2016

.NCLT may pass interim orders in case of urgency in case of lodging of caveat.

No provision for filing caveat before NCLAT - There is no specific provision in NCLAT Rules,
2016 for filing a caveat. However, it does not mean that Caveat cannot be filed.

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2.2. Presentation of caveat: -

Every caveat shall be presented in triplicate by the appellant or applicant or respondent, as the
case may be, in person or by his duly authorized representative or by an advocate duly appointed
in this behalf in the form given below with stipulated fee at the filing counter and non-compliance
of this may constitute a valid ground to refuse to entertain the same. (Format enclosed in Annexure).

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 Chapter-IV
INSOLVENCY AND BANKRUPTCY CODE, 2016

1. 1. Introduction to the Insolvency and Bankruptcy Code, 2016

In 2016, the Indian government implemented the Insolvency and Bankruptcy Code (IBC), a
pivotal piece of legislation aimed at tackling insolvency issues within a structured framework.
With the Presidential assent received in May of the same year, the IBC introduced a time-bound
process to resolve claims involving insolvent companies. This revolutionary code grants creditors
the authority to take control of a debtor’s assets upon default, setting forth a clear path for resolving
insolvency. Notably, both debtors and creditors have the right to initiate ‘recovery’ proceedings
under the IBC, signalling a balanced approach to addressing financial distress. The code mandates
that companies must complete the entire insolvency exercise within a strict 180-day timeline,
ensuring efficiency and expediency in the resolution process.

Key Functions of the Insolvency and Bankruptcy Code, 2016

1. Consolidation and Refinement of Insolvency Laws:

- The IBC consolidates and refines existing laws related to the reorganization and insolvency
resolution for various entities, ensuring a cohesive legal framework.

2. Time-bound Framework for Processes:

- It establishes a time-bound process for resolving insolvency issues, promoting efficiency
and timely resolutions.

3. Maximization of Asset Value:

- The IBC aims to maximize the value of the assets of insolvent entities, thereby fostering
a supportive environment for entrepreneurship and business continuity.

4. Facilitation of Credit Availability:

- By providing a structured mechanism for resolving insolvency, the IBC facilitates the
availability of credit, thereby encouraging financial stability and growth.

5. Harmonization of Stakeholder Interests:

- The IBC seeks to balance the interests of all stakeholders involved, including creditors,
debtors, and the government. It revises the payment priority of governmental dues to ensure
a fair and equitable distribution of assets.

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6. Establishment of the Insolvency and Bankruptcy Board of India
(IBBI):
- The IBC establishes the Insolvency and Bankruptcy Board of India (IBBI) to oversee and
regulate insolvency proceedings, ensuring that they are conducted in a transparent and
efficient manner.

Enforcement and Integration with Other Laws

The IBC is designed to create a streamlined and effective insolvency resolution process that
maximizes asset value, encourages entrepreneurship, ensures the availability of credit, and protects
the interests of all stakeholders. Under the IBC, its provisions supersede conflicting enactments,
ensuring uniformity and clarity in insolvency resolution. Consequently, amendments have been
integrated into various laws such as the Companies Act, Income Tax Act, The RDBFI Act, and
SARFAESI Act to align with the principles and objectives of the IBC. This code stands as a
definitive and exhaustive guide on matters of insolvency, precluding the application of decisions
from other statutes in this domain.

The IBC represents a significant step forward in India’s insolvency regime, promoting a
disciplined and fair process for resolving financial distress. By empowering creditors, allowing
debtor-initiated proceedings, and enforcing a stringent timeline, the IBC aims to maximize asset
value and ensure swift resolution of insolvency cases. The establishment of the IBBI further
ensures the proper regulation and oversight of insolvency proceedings in India, contributing to a
more robust and reliable economic environment.

NCLT will be ‘adjudicating authority’ for this purpose. NCLAT will

be appellate authority.
The Debt Recovery Tribunal (DRT) serves as the Adjudicating Authority for non-corporate
entities like individuals, firms, and Hindu Undivided Families (HUFs), while the Debt Recovery
Appellate Tribunal (DRAT) acts as the Appellate Authority.

A recent addition to insolvency procedures is the Pre-Packaged Insolvency Resolution

Process (PPIRP), implemented from April 4, 2021, specifically targeting Micro, Small, and
Medium Enterprises (MSMEs). This innovative approach expedites the resolution of insolvency
for MSMEs, fostering quick and efficient outcomes.

The Insolvency and Bankruptcy Board of India (IBBI) plays a crucial role, overseeing
insolvency and bankruptcy proceedings for corporate entities, firms, and individuals. Insolvency
Professionals (IPs), members of Insolvency Professional Agencies (IPAs), are instrumental in
managing the intricacies of insolvency cases, ensuring they possess the necessary knowledge and
expertise.

Under the Insolvency Code, control shifts to the Committee of Creditors (CoC) of financial
creditors when an enterprise defaults on payments. IPs, supervised by the CoC, take charge of the
insolvency process, adhering to specified timeframes for evaluating proposals aimed at revitalizing
or liquidating the enterprise. This time-bound approach enhances the likelihood of salvaging the
enterprise as a going concern, thereby optimizing the productive resources of the economy.
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2. Applicability of the Insolvency and Bankruptcy Code, 2016

The Insolvency and Bankruptcy Code, 2016 (IBC), specifies its applicability to different entities
for issues related to insolvency, liquidation, voluntary liquidation, or bankruptcy, as outlined in
Section 2. Here’s a clear breakdown of what entities the IBC covers:

1. Companies Incorporated under the Companies Act:

- The IBC applies to all companies formed under the Companies Act.

2. Companies Governed by Special Acts:

- It also covers companies regulated by special Acts, but if there’s a conflict between the
IBC and the special Act, the special Act takes precedence.

3. Limited Liability Partnerships (LLPs):

- LLPs are included under the IBC.

4. Other Body Corporates:

- The Central Government can notify other body corporates to be covered by the IBC.

5. Personal Guarantors to Corporate Debtors:

- Individuals who have given personal guarantees for corporate debtors fall under the IBC.

6. Partnership Firms and Proprietorship Firms:

- Partnership and proprietorship firms are also covered.

7.Individuals:
- The IBC applies to individuals, except those specified in clause (e).

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Exclusions Under the Insolvency and Bankruptcy Code
The IBC does not apply to corporate entities in the finance sector. Section 3(7) of the IBC
specifically excludes financial service providers from being considered “corporate persons.”
However, there are notable exceptions:

1. Non-Banking Financial Companies (NBFCs):

- Certain NBFCs, including housing finance companies with assets of Rs. 500 crore or more,
are included under the IBC. This was clarified in Notification No. S.O. 4139(E) dated
November 18, 2019.

2. Role of the Reserve Bank of India (RBI):

- The RBI is the appropriate financial regulator for these NBFCs, ensuring they follow the
IBC’s framework.

Regulatory Framework for Financial Service Providers

To manage insolvency and liquidation proceedings for financial service providers, the Insolvency
and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and
Application to Adjudicating Authority) Rules, 2019, have been established. These rules ensure
that the processes for financial service providers are orderly and regulated.

Terms
Under the Insolvency and Bankruptcy Code (IBC), several terms hold significance, particularly

concerning creditors:
1. Creditors: - Refers to any person to whom owed a debt is owed, encompassing various
categories such as financial creditors, operational creditors, secured creditors, unsecured
creditors, and decree-holders.
2. Financial Creditor: - Defined in Section 5(7) of the IBC, a financial creditor is someone
to whom a financial debt is owed , which includes loans and borrowings along with
interest, disbursed against consideration for the time value of money. This category
typically includes banks and financial institutions.
3. Financial Debt: - Section 5(8) of the IBC outlines financial debt as debt with interest,
disbursed against consideration for time value of money, including specified borrowings.
Essentially, it pertains to loans received.
4. Operational Creditor: - As per Section 5(20) of the IBC, an operational creditor is
owed an operational debt, which covers claims related to goods or services, including
employment, or dues under any law payable to government entities like the Central
Government, State Government, or Local Authorities.
5. Operational Debt: - Section 5(21) of the IBC defines operational debt as claims
regarding goods or services, including employment-related dues or payments under
any law, owed to government bodies.

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Importantly, the IBC prioritizes government dues under operational creditors, placing their
repayment even after unsecured financial creditors in the hierarchy. This highlights the specific
treatment of government dues within the insolvency and bankruptcy framework.

3. Insolvency Process under the IBC

1. Filing an Application: - Any creditor of the assessee, including operational creditors,

can file an application under Section 9 of the Insolvency and Bankruptcy Code, 2016
(IBC) to initiate the corporate insolvency resolution process.
2. Admission and Initial Orders by NCLT: - The National Company Law Tribunal (NCLT)
will admit the application. Upon admission, Section 13 of the IBC comes into play,
leading to a moratorium and the appointment of an Interim Resolution Professional (IRP).
3. Constitution of Committee of Creditors: - A Committee of Creditors (CoC) will be
formed from among the financial creditors of the assessee. Following this, a Resolution
Professional (RP) will be appointed who will make a public announcement.
4. Resolution Process: - The RP will invite prospective resolution applicants to present
their resolution plans for the assessee. After discussions with the CoC, a final resolution
plan will be prepared.
5. Approval of Resolution Plan: - The resolution plan, once approved by the CoC, will
be submitted to the NCLT for its approval. The rights of the Income Tax Department will
be considered within the context of the IBC, and the department cannot exercise independent
rights once the NCLT approves the resolution plan.

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Implications for Income Tax Department

1. Extinguishment of Prior Dues: - Once the resolution plan is approved by the NCLT,
all prior dues and proceedings against the corporate debtor are extinguished under Section
31 of the IBC and any notices proposing to initiate proceedings against the corporate
debtor for periods prior to the NCLT’s order are abated.
2. Operational Creditor Status: - Under Sections 5(20) and 5(21) of the IBC, the Income
Tax Department is considered an operational creditor, and tax dues are considered
operational debts.
3. Binding Nature of Resolution Plan: - Once the resolution plan approved by the CoC
is sanctioned by the adjudicating authority under Section 31(1) of the IBC, all authorities,
including the Income Tax Department, are bound by the terms of the resolution plan.
4. IBC Prevailing over Other Acts: - Section 238 of the IBC clearly states that the provisions
of the IBC prevail over any other laws.
5. Priority in Distribution of Assets: - According to Section 53(1) of the IBC, the priority
for distribution of assets places amounts due to the Central Government and State
Government for the two years period preceding the liquidation commencement date at
the fifth position in the order of priority

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Who can initiate insolvency resolution process?

Claim:

As defined in Section 3(6) of the Insolvency and Bankruptcy Code, 2016, “claim” means:

a. A right to payment, whether or not such right is reduced to judgment, fixed, disputed,
undisputed, legal, equitable, secured, or unsecured.

b. A right to remedy for breach of contract under any law for the time being in force, if such
breach gives rise to a right to payment, whether or not such right is reduced to judgment,
fixed, matured, unmatured, disputed, undisputed, secured, or unsecured.

Who can initiate the process?

Under Section 6 of the IBC, the following entities can initiate the corporate insolvency resolution
process when a corporate debtor commits a default:

- Financial creditors
- Operational creditors
- The corporate debtor itself Initiation by Operational Creditor

Procedure:
1. Demand Notice:
- Operational creditors can initiate the process by delivering a demand notice or a copy of
an invoice demanding payment of the default amount to the corporate debtor (Section 8(1)
of the IBC).

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- The demand notice must be in the prescribed form (Form 3 or Form 4) and can be sent by
post, hand delivery, or email (Rule 5(2) of the Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016).

- A copy of the demand notice or invoice should be forwarded to an information utility.

2. Response from Corporate Debtor:

- The corporate debtor must reply within ten days of receiving the demand notice if there is
a dispute regarding the debt, indicating the existence of the dispute or any pending suit or
arbitration (Section 8(2)(a) of the IBC).

3. Action by Operational Creditor:

- If no reply is received within ten days, the operational creditor can file an application before
the NCLT to initiate the corporate insolvency resolution process (Section 9(1) of the IBC).
- The application should be in the prescribed form and accompanied by the documents
specified in Section 9(3) of the IBC.

Application and Admission Process

Application Filing:

- The operational creditor files the application against the corporate debtor in Form 5 before
the NCLT. A copy of the application should be sent to the Insolvency and Bankruptcy Board
of India (IBBI) (Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016).

Admission Criteria:

- The application will be admitted by the NCLT if:

- It is complete.

- There is no payment of the unpaid operational debt.

- The demand notice was delivered.

- No notice of dispute is received from the corporate debtor.

- No disciplinary proceedings are pending against the proposed resolution professional

(Section 9(5)(i) of the IBC).

Rejection Criteria:

- The application will be rejected if any of the above requirements are not met (Section 9(5)
(ii) of the IBC).

- Before rejecting, the operational creditor will be given notice to rectify defects within
seven days of receipt of the notice (Proviso to Section 9(5) of the IBC).

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Orders Post Admission

After admitting the application, the Adjudicating Authority (NCLT) will:

- Declare a moratorium for purposes referred to in Section 14 of the IBC.

- Cause a public announcement of the initiation of the corporate insolvency resolution

process and call for the submission of claims (Section 15 of the IBC).

- Appoint an interim resolution professional in the manner laid down in Section 16 of the
IBC (Section 13(1) of the IBC). Where any corporate debtor commits a default, a financial
creditor, an operational creditor or the corporate debtor itself may initiate corporate
insolvency resolution process in respect of such corporate debtor in the manner as provided
under this Chapter (Chapter II of Part II) – Section 6 of Insolvency Code, 2016.

4. Moratorium under IBC and Tax Proceedings

Has the Supreme Court (SC) in Sundaresh Bhatt, Liquidator of ABG Shipyard Vs CBIC
(Civil Appeal No. 7667/2021 dated 26/08/2022) legitimised tax proceedings during the period
of moratorium set under the Insolvency & Bankruptcy Code?

Rendered in context of the custom law, in the aforesaid matter, SC has held that IBC would
prevail over the Customs Act, to the extent that once moratorium is imposed in terms of sections
14 or 33(5) of the IBC, the respondent authority only has a limited jurisdiction to assess/determine
the quantum of customs duty and other levies. The respondent authority does not have the power
to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act. The
Court observed that issuance of demand notices to seek enforcement of custom dues during the
moratorium period would clearly violate the provisions of Sections 14 or 33(5) of the IBC, as the
demand notices are an initiation of legal proceedings against the Corporate Debtor (CD). Thus, the
SC has fairly settled that recovery of tax dues cannot be made, otherwise than in the manner
prescribed under IBC.

However, what is noteworthy is further examination of the powers which the tax authority can
exercise during the moratorium period under the IBC. The court has importantly observed that
authorities could however initiate assessment or re-assessment of the duties and other levies. The
Resolution Professional has an obligation to ensure that assessment is legal, and he has sufficient
power to question any assessment, if he finds the same to be excessive. The court relied on the ratio
of the judgement in S.V. Kondaskar v. V.M. Deshpande, AIR 1972 SC 878, wherein the court had
held that the authorities can only take steps to determine the tax, interest, fines or any penalty
which is due. However, the authority cannot enforce a claim for recovery or levy of interest on the
tax due during the period of moratorium.

There has been varying positions vis-à-vis initiating or continuing tax proceeding during the
period of moratorium. For instance, the Calcutta HC in SREI Equipment Finance Ltd. vs.
Additional/Joint/Deputy/Assistant Commissioner of Income Tax and others has held that tax
proceeding cannot be continued during moratorium. However, given the ratio of the ruling,
moratorium for prohibiting initiation or continuation of tax proceedings will now have limited
bearing.

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Since IBC is a relatively new law, judicial decisions are still developing. The flow chart below
outlines different scenarios that may arise for the IT department. Assessing officers are advised to
seek legal opinions from standing counsels regarding these intricate situations before proceeding
with any actions during the Moratorium period.

Frequently Asked Questions

1. What is a claim? A claim is essentially a right to payment or a remedy for a breach of contract.
Under Section 3(6), it is defined as:

• A right to payment, regardless of whether this right is confirmed by a judgment, fixed,

disputed, undisputed, legal, equitable, secured, or unsecured.

• A right to a remedy for breach of contract under any prevailing law, if such a breach
results in a right to payment, irrespective of whether this right is confirmed by a
judgment, fixed, matured, unmatured, disputed, undisputed, secured, or unsecured.

This includes all payable amounts, including disputed income tax claims, interest, and penalties.
After the CIRP process is completed, new assessments and claims cannot be made. Therefore, it is
critical to compile all claims related to the assessee promptly.

2. When should claims be filed? Claims are commonly required during the CIRP and Liquidation
stages but can also be filed in other proceedings such as voluntary liquidation, insolvency
proceedings against personal guarantors, and under Section 271 of the Companies Act, 2013.

3. How can I find out if a company is in CIRP or Liquidation? Information on companies

undergoing CIRP or Liquidation is available on the IBBI website (www.ibbi.gov.in). The site
provides a quick link to Corporate Processes, where all public announcements issued by
resolution professionals and liquidators can be found.

4. Who can submit a claim? Claims can be submitted by creditors, workmen, employees, home
buyers, and any other creditors under the Code. The income tax department is considered an
operational creditor. If income tax is secured by an attachment or any other security, it remains
a secured operational creditor and should be filed as such.

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5. Does a claim need to be matured when filed? Both matured and unmatured claims can be
filed. Once a resolution plan is approved, no assessment proceedings can be initiated against
the Corporate Debtor, and no claims for past dues can be made. Therefore, it is important to
complete assessments for all years prior to the CIRP commencement date and file related
claims accordingly. Pending proceedings, such as those in ITAT for prior period claims, should
also be included.

6. In which form should claims be filed, and how should they be submitted? Claims must be
filed using the appropriate forms as per the CIRP Regulations, with necessary proofs and
documents. The following forms are used based on the specific insolvency process:

• CIRP: Form B as per CIRP Regulations 2016

• Fast Track IRP: Form B as per Fast Track IRP Regulations 2017

• Liquidation: Form C as per Liquidation Process Regulations 2016

• Voluntary Liquidation: Form B as per Voluntary Liquidation Regulations 2017

• Personal Guarantors: Form B as per IIRP Regulations 2019

Claims can be submitted in person, by post, or electronically.

7. What is the deadline for filing claims during CIRP? Claims should ideally be filed within
90 days of the commencement of CIRP or before the issuance of a Request for Resolution
Plan, whichever is later. Late filings require permission from the NCLT. After the approval of
the resolution plan by the CoC, late claims are unlikely to be admitted, as supported by
numerous Supreme Court judgments.

8. What happens to claims pending assessment during CIRP? Claims pending assessment
may be held in abeyance during CIRP due to the unavailability of information with the
Resolution Professional (RP). Even if proceedings like appeals are ongoing, the disputed
amount should still be included in the claim.

9. What rights do tax authorities have during CIRP? Tax authorities can attend Committee of
Creditors (CoC) meetings if their claims constitute at least 10% of the total debt but do not
have voting rights. However, if the Corporate Debtor lacks financial creditors and the income
tax department is among the top 18 operational creditors, they are granted a seat in the CoC
with voting rights.

10. Does failure to submit proof of claim lead to disqualification? No, a creditor who misses
the initial deadline can still submit proof of claim to the IRP/RP until the resolution plan is
approved by the CoC. The IRP/RP may request additional details or clarification.

11. What happens to claims pending assessment during Liquidation? During Liquidation,
pending assessment claims are typically revived, and assessments are completed based on the
available information.

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12. Do tax authorities need to refile claims during Liquidation if already filed under CIRP?
If the CIRP process fails and Liquidation proceedings begin, a new public announcement
calling for claims is made. It is advisable to refile claims during Liquidation even if they were
filed under CIRP, as the two processes and their requirements differ.

13. Can tax authorities file a claim during Liquidation if it wasn’t filed during CIRP? Is
NCLT approval needed? Yes, claims can be filed during Liquidation even if not filed during
CIRP. NCLT approval is not required for timely submissions, but late submissions will need
NCLT approval.

14. In which form should tax authorities file their claim, and how should it be submitted to
the Liquidator? Tax authorities should file their claims using Form C, along with an Affidavit
and Verification as per Schedule II of the IBBI (Liquidation Process) Regulations, 2016.
Claims can be submitted in person, by post, or electronically.

15. What rights do tax authorities have during Liquidation? During Liquidation, tax authorities
can participate in the Stakeholders’ Consultation Committee.

16. What is the format of the Affidavit and Verification required with proof of claim? The
format for the Affidavit and Verification is included with Form C, which is applicable for tax
authorities.

17. What is the deadline for submitting a claim to the Liquidator? Claims must be submitted
within thirty days from the commencement of Liquidation, as specified in the Public
Announcement available on the IBBI website. Late submissions require NCLT approval,
which is unlikely if assets have been sold or a Section 54 application for dissolution has been
filed.

18. What if tax authorities miss the deadline for filing their claim? The only recourse for late
submissions is to file an appeal under Section 42 of the IBC to the NCLT. Claims must be
submitted before the distribution of assets, as post-distribution claims will not be entertained
by the NCLT.

19. Is the Liquidator obligated to admit all filed claims? No, the Liquidator has the discretion
to reject or partially admit claims.

20. How can I find out if my claim is admitted or rejected? Information on admitted and rejected
claims is typically posted on the IBBI website. You can also contact the RP for this information.
Creditors who have filed claims are entitled to receive a copy of the creditors’ list.

21. What can tax authorities do if their claim is rejected or partially rejected by the
Liquidator? Tax authorities can appeal to the NCLT within 14 days of receiving the
Liquidator’s decision. It is crucial to file promptly, as delays may render the appeal ineffective
if the amount is distributed in the meantime.

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22. Can tax authorities modify or withdraw a filed claim? Yes, claims can be modified or
withdrawn within 14 days of submission as per Section 38(5) of the IBC. Even beyond 14
days, tax authorities may attempt to withdraw claims, arguing that the mentioned time limits
are directory.

23. Can tax authorities update their claim? Yes, tax authorities can revise or update their claim.
However, significant delays in filing updates may require approval from the resolution
professional or liquidator, or may need to be addressed with the NCLT.

24. Can a contingent claim be filed? Yes, contingent claims can be filed but must be clearly
identified as such. Under Regulation 14 of the CIRP Regulations, if a creditor’s claim amount
is uncertain due to contingency, the IRP or RP will estimate the claim amount based on
available information and adjust it when additional information is provided.

25. Should claims with secured assets be filed by tax authorities? Yes, claims involving secured
assets must be filed, as the assets form part of the Corporate Debtor’s liquidation estate and are
prioritized according to Section 53 of the IBC. It is crucial to detail the attached assets in the
claim form to avoid indicating “Not applicable” inaccurately.

Form C

5. Action points for Assessing Officers during the Corporate

Insolvency Resolution Process (CIRP):
1. File Claims:
- File claims even for disputed amounts: It’s important to submit claims for all amounts,
including those that are under dispute. This ensures that the department’s interests are
protected during the resolution process.

- File claims for amounts that are not Crystalized: Claims should be filed even for amounts
that are not yet fully determined or finalized. This ensures that the department is included
in the distribution of assets in case of resolution.

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- File claims for contingent claims: Assessing Officers should also file claims for contingent
liabilities or claims that may arise in the future, ensuring that the department’s potential
claims are recognized.

- File claims for amounts under dispute with any appellate tribunal: Claims should also be
filed for amounts that are being disputed with any appellate tribunal. This ensures that the
department’s position is represented in ongoing legal disputes.

2. Attend Committee of Creditors (CoC) Meetings:

- Participate if the debt owed to the department is significant: If the debt owed to the department
constitutes at least 10% of the total debt, the Assessing Officer should actively participate
in CoC meetings to ensure that the department’s voice is heard in decision-making.

3. Operational Creditors’ Representation:

- In absence of financial creditors, top 18 Operational Creditors form CoC: If the company
undergoing resolution does not have financial creditors, the top 18 Operational Creditors
are placed in the CoC. Assessing Officers should be aware of this arrangement and collaborate
with operational creditors as necessary during the resolution process.

By following these action points, Assessing Officers can ensure that the department’s interests
are adequately represented and protected during the Corporate Insolvency Resolution Process

Priority to amount due to operational creditors over financial creditors:

As per regulation 38(1) of IBBI (Insolvency Resolution Process for Corporate Persons)
Regulations, 2016, the amount payable under a resolution plan - (a) to the operational creditors
shall be paid in priority over financial creditors; and (b) to the financial creditors, who have a right
to vote under section 21(2) of Insolvency Code and did not vote in favour of the resolution plan,
shall be paid in priority over financial creditors who voted in favour of the plan.

Section 30(2)(b)(i) of Insolvency Code provides that provision for payment of debts to
operational creditors should be such that amount to be paid to such creditors shall not be less than
amount to be paid to such creditors in the event of liquidation of corporate debtor under section 53
of Insolvency Code. [section 53 of Insolvency Code provides for distribution of assets in
liquidation]. This Provision applies to PPIRP also, as per section 54K (3) of Insolvency Code.

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 Chapter-I
SPECIAL LEAVE PETITION(SLP)

Scope of Article 136

Applicability of a SLP
Rules for filing SLP
Provision relating to SLP
Grounds for filing a SLP

Introduction
A Special Leave Petition (SLP) is a legal remedy available in the Indian legal system, primarily
under the jurisdiction of the Supreme Court of India. It is a discretionary remedy that allows
individuals or 0entities to appeal to the Supreme Court for challenging decisions made by lower
courts or tribunals.

Special Leave Petitions serve as an essential instrument in the Indian legal system, allowing
litigants to approach the Supreme Court when substantial questions of law, errors in legal
interpretation, or miscarriages of justice are involved. However, the Supreme Court exercises its
discretion carefully when granting special leave, as it aims to balance the need for justice with the
principle of judicial restraint. Indian case laws provide guidance on the scope and limitations of
SLPs, ensuring that this discretionary remedy is applied judiciously. Understanding the provisions
and precedents related to Special Leave Petitions is crucial for both legal practitioners and
individuals seeking justice in India’s complex legal landscape.

Scope of Article 136

The Supreme Court can grant Special Leave to appeal against any judgement, decree, determination,
sentence, or order of any court or tribunal in the territory of India. It is not limited to any particular
subject matter or court. The Supreme Court has the discretion to consider cases involving questions of
fact, law, or both.

The text of Article 136 is as follows:

“136. Special leave to appeal by the Supreme Court.

(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion,
grant Special Leave to appeal from any judgement, decree, determination, sentence or order in
any cause or matter passed or made by any court or tribunal in the territory of India.

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(2) Nothing in clause (1) shall apply to any judgement, determination, sentence or order
passed or made by any court or tribunal constituted by or under any law relating to the Armed
Forces.”

1. Applicability of a Special Leave Petition

A Special Leave Petition (SLP) can be filed in the Supreme Court of India against a final order
passed by a High Court. Governed by the Civil Procedure Code, an SLP is considered by the
Supreme Court if certain conditions are met. The Supreme Court typically entertains an SLP in the
following cases:

Substantial Question of Law or Constitution

- Grave violation of constitutional provisions or human/fundamental rights.

- Error apparent on the face of the record.
- Misdirection by the High Court resulting in jurisdictional errors.
- Illegal or gross abuse of jurisdiction by the High Court.
- Decision contrary to well-settled legal principles.
- Decision contrary to established precedents.

The Supreme Court has the discretion to grant or deny an SLP, assessing the merits and potential
success of the case.

2. Rules for Filing an SLP

The procedural rules for filing SLPs are governed by the Supreme Court Rules, 2013:
- Rule 6: Specifies the procedure for filing an SLP, including the required format and content
of the petition.

- Rule 5: Requires obtaining a certificate from the concerned High Court, confirming that
the case involves substantial questions of law.

Compliance with these rules is mandatory, and non-compliance can lead to rejection of the
petition.

3. Time Frame for Filing an SLP

The time frame for filing an SLP in the Supreme Court of India varies:
- General Cases: 90 days from the date of the judgement or order being challenged.

- High Court Matters: 60 days when the SLP is filed against a High Court order refusing a
certificate of fitness for appeal.

These time frames are mandated by the Supreme Court Rules, 2013. The Court may condone
delays in exceptional circumstances if valid reasons are presented

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 .Chapter-II

FILING OF SLP

1. Requirements for Filing a Special Leave Petition (SLP)

- Contents of SLP: An SLP must include all relevant facts for the Supreme Court’s
consideration, signed by the Advocate on Record (AoR).

- Declarations: The petitioner must declare no other petition is filed in the high court and that
annexures are true copies of lower court pleadings.

- Judgement Attachment: The SLP must include the judgement being appealed against.

2. Pre-Requisites for Filing SLP

I. Jurisdiction: SLPs should fall within the Supreme Court’s jurisdiction, involving substantial
legal questions or public interest issues.

II. Adverse Judgement: There must be an adverse decision by a lower court, tribunal, or
authority.

III. Timing: File within 90 days of the judgement; 60 days for High Court certificate refusal
cases.

IV. Certificate: Obtain a fitness for appeal certificate if required, especially for High Court
judgements.

V. Format: Follow Supreme Court Rules, 2013 for drafting and content.

VI. Paper Books: Prepare copies of relevant documents and lower court judgements.

VII. Fees: Pay applicable court fees.

VIII. Service: Serve notice to the opposite party.

IX. Appearance: Attend Supreme Court hearings as required.

X. Grounds: Clearly state grounds of appeal.

XI. Formalities: Adhere to procedural requirements meticulously.

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 Chapter-III
IMPORTANT POINTS FOR
SLP PROPOSALS

Points to be Taken into Consideration for Special Leave Petition

(SLP) Proposals
1. Material Facts of the Case:
- Highlight the material facts of the case, ensuring that all relevant orders are enclosed.

2. Tax Effect:
- Ensure the tax effect, including surcharge and cess but excluding interest, is more than Rs.
2 Crore on disputed issues for each Assessment Year.

3. Revenue Audit Objection:

- Provide the Revenue Audit Objection and its acceptance note.

- If the Audit Objection is not accepted, determine whether an SLP is still required.

4. Comments on Department’s Standing Counsel Assertions:

- Address the assertions made by the Department’s Standing Counsel as recorded in the
High Court order, such as:

- One or more questions not pressed by the Counsel.

- Applicability of SQL of another appeal/order.

5. Timeline Compliance:
- Strictly follow the timeline of 20 days from the date of the order.

- If the SLP proposal is delayed beyond 30 days, obtain approval from the Pr.CCIT with
valid reasons.

6. Downloading High Court Order:

- Promptly download the High Court order without waiting for a certified copy.

7. SLP Filing Under Article 136:

- File the SLP under Article 136 of the Constitution, not under Section 261, which requires
a fitness certificate from the High Court.

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8. Legal Opinion from Standing Counsel:
- There is no need to seek a legal opinion from the Standing Counsel unless required.

9. Proforma-B Submission:
- Use Proforma-B for submitting the SLP proposal with complete annexures through the
Offline Utility.

10. Question of Law vs. Question of Fact:

- Propose the SLP only on a Question of Law, not on Questions of Fact.

- Understand the difference between a Question of Law and a Substantial Question of Law,
which can be the subject matter of an appeal.

11. Judicial Analysis of Substantial Question of Law:

- Recognize that second appeals to High Courts can arise only on substantial questions of
law certified by the courts.

- A question of law will be substantial if it directly and substantially affects the rights of
the parties, involves some doubt or difference of opinion, or has room for difference of
opinion.

- If the law is well-settled by the Supreme Court, merely applying it to particular facts does
not constitute a substantial question of law.

12. History of the Issue at Hand:

- Provide the history of the issue for the assessee.

- If the High Court decided any appeal based on an earlier year’s decision, provide the status
of that SLP or reasons why an SLP was not proposed in that year.

13. Prompt Removal of Defects and Vetting of Draft:

- Ensure prompt removal of any defects and proper vetting of the draft.

14. Orders/Notices Under Sections 147/148:

- If an order/notice under Sections 147/148 is quashed or set aside:

- Provide copies of the reasons recorded, the original assessment order, and the order
disposing of objections.

- Provide the status of the order under Section 143(3) read with Section 147 (in case the
notice is quashed), along with the status of any appeal.

15. Orders Under Section 263:

- If an order under Section 263 is set aside or quashed:

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- Provide the status of the order under Section 143(3) read with Section 263 along with the
status of any appeal against it.

16. Penalty Matters:

- Provide the fate of the quantum appeal in penalty matters.

17.Well-Framed Substantial Questions of Law (SQL):

- Ensure the SQLs are well-framed and necessarily relate to issues adjudicated by the High
Court.

By considering these points, the assessing officer can ensure that the SLP proposal is thoroughly
evaluated and justified before submission, adhering to the legal standards and procedural
requirements.

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CHECKLIST AND STEPS RELATING TO SLP

1. CHECKLIST:-
1. Assessment Order/Order under dispute
2. CIT(A) Order
3. ITAT Order
4. Copy of Appeal Memo under Section 260A/Writ Petition
5. High Court Order (downloaded from website, certified copy not required)
6. Proforma B (generated through the Utility developed by Directorate)
7. Substantial Question(s) of Law
8. Comments/Recommendation of Pr.CIT/CCIT
9. Opinion of Standing Counsel (if applicable)
10. Proforma B/Col. 11 – for relied-upon cases
11. Hyperlinked documents in e-office file

2. Steps for sending SLP Proposal through E-office: -

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3. SLP- E-Office File Movement :-

4. Proforma B Utility:-
I. The offline utility developed by the L&R Directorate for generating PROFORMA B for
SLP Proposals aims to reduce delays by addressing common queries. It offers the following
features:
i. Field officers can input all necessary data and attachments.

ii. The utility includes built-in checks and validations to assist in filling out correct and
complete information.

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II. The standardized Proforma B and its annexures are generated in a single or multiple PDF
files through this Utility, ensuring compatibility with E-Office. This process facilitates:

i. Efficient processing of SLP proposals at the Pr.CIT/CIT level.

ii. Validation during generation to ensure Proforma B is error-free.

iii. The utility serves as a repository for all SLP proposals recommended/pending at the
Pr.CIT/CIT level for future reference.

iv. Field officers can search past proposals based on the assessee name, ensuring consistency
in documentation.

Frequently Asked Questions

1. Time Limits for Appeals to Various Judicial Fora

Q: What are the time limits for filing appeals in different judicial forums?

A: - Appeal to ITAT: You have 60 days from the date of receiving the order from the
Commissioner of Income Tax (Appeals) [CIT(A)] to file an appeal with the Income Tax
Appellate Tribunal (ITAT).

- Appeal to High Court: After receiving the ITAT’s order, you have 120 days to file an appeal
with the High Court.
- Special Leave Petition (SLP): If you want to file a Special Leave Petition in the Supreme
Court, you must do so within 90 days of receiving the order from the High Court.

2. Tax Effect Determination in Combined ITAT Orders

Q: How is the tax effect decided when there’s a combined order from the ITAT?

A: - In cases where the ITAT issues a composite order involving multiple assessment years and
common issues, you can file an appeal for those years where the tax effect from disputed issues
exceeds the specified monetary limit.

- However, if the tax effect for a particular assessment year is below this monetary limit, no
appeal can be filed by the department for that year.

3. Time Limit for Forwarding SLP Proposal to Board

Q: What is the timeframe for forwarding a Special Leave Petition (SLP) proposal to the
Board?

A: The SLP proposal must be forwarded to the Board within 20 days through the E-Office
system.
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4. Appeal u/s 260A Against Dismissed ITAT Miscellaneous Application

Q: Can an appeal under section 260A be filed against an ITAT Miscellaneous Application
(MA) that has been dismissed?

A: - According to a ruling by the Bombay High Court, an appeal under section 260A cannot be
filed directly against an MA dismissed by the ITAT.

- Instead, a separate appeal process will have to be followed in such cases.

5. Engaging Standing Counsel Other Than PCIT Charge Counsel

Q: Can a Standing Counsel be engaged for representation other than the one assigned to the
Principal Chief Commissioner of Income Tax (PCIT) charge?

A: - To engage any Standing Counsel other than the one allocated to the PCIT charge, permission
must be obtained from the Principal Chief Commissioner of Income Tax (Pr CCIT).

6. Engaging ASG for Representation Before ITAT/High Court

Q: How can an Additional Solicitor General (ASG) be engaged for representation before the
ITAT or High Court?

A:- The engagement of an ASG can be done with the approval of the concerned Chief
Commissioner of Income Tax (CCIT).

- Subsequently, the consent of the ASG and approval from the Ministry of Law must be
obtained.
7. Assignment of ASG from Different Region for ITAT/High Court

Q: Can an ASG from a different region be assigned to represent a case in the ITAT or High
Court?

A:- If an ASG from a different region needs to represent a case, they must be appointed as a
Special Counsel by the Board.

8. Appointment of Standing Counsel for ITAT Cases

Q: Is it possible to appoint a Standing Counsel to argue cases before the ITAT?

A: - Depending on the complexity of the case, a Standing Counsel can be engaged to represent
the case in the ITAT.

9. Advance for Standing Counsels for Expenses

Q: Can Standing Counsels receive advances for drafting and other expenses?

A:- Yes, Standing Counsels can be given advances for out-of-pocket expenses, subject to
approval from the concerned CCIT.

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10. Engagement of Counsel for NCLT/NCLAT Outside Mumbai

Q: How can a Counsel be engaged for representing cases before the NCLT/NCLAT benches
outside Mumbai?

A: - The concerned Principal Chief Commissioner of Income Tax (PCCIT) can engage a
Counsel empanelled for the specific region where the case is being heard, with prior intimation
to the Office of the PCIT (Judicial).

11. Appeal Against ITAT Decision

Q: Where should an appeal against an ITAT decision be filed?

A: - The Supreme Court, in a decision regarding Pr. Commissioner of Income Tax-I, Chandigarh
v. M/s. ABC Papers Limited, [2022] 141 taxmann.com 332 (SC) stated that appeals against
ITAT decisions should be filed in the High Court whose jurisdiction includes the Assessing
Officer (AO who issued the assessment order.

- Even if cases are transferred under Section 127 of the Income Tax Act, the High Court with
jurisdiction over the AO who made the order retains appellate jurisdiction.

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ANNEXURES

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 ANNEXURES

ANNEXURE A1 : INSTRUCTIONS REGARDING STANDARD OPERATING

PROCEDURE ON FILING OF APPEALS TO ITAT UNDER SECTION 253 AND RELATED
MATTERS

INSTRUCTION NO. 08/2011[F NO. 279/MISC./M- 43/2011-ITJ], DATE 11.08.2011

1. SECTION 253 OF THE INCOME-TAX ACT, 1961 - APPELLATE TRIBUNAL - APPEALS

to - Instructions regarding standard operating procedure on filing of appeals to ITAT under section
253 and related matters

With a view to streamline the process of filing appeals to ITAT and in suppression of the existing
Instructions on the subject in general, and Instruction No. 1274 dated 10-8-1979, Instruction No. 1353
dated 9-9-1980, Instruction No. 1387 dated 3-3-1981, Instruction No. 1493 dated 18-11-1982, Instruction
No. 1570 dated 4-7-1984, Instruction No. 1894 dated 16-6-1992, and Instruction No.1921 dated 23-1-
1995, in particular, the following Instructions are issued herewith for compliance by all concerned:

2. Responsibility for Filing of Appeals to ITAT

Subject to the Instructions issued by the CBDT for the time being in force on monetary limits for filing
appeals under section 268A, the jurisdictional CIT shall be the authority to decide whether to contest an
order of the CIT(A), in the light of the facts and circumstances of a particular case and the statutory
provisions. While taking decision in the matter, he shall, inter alia, take into consideration reports of the
authorities below. Once the CIT communicates his decision to contest a particular order of CIT(A), it shall
be the responsibility of the Range Head to ensure timely and proper filing of appeal in the ITAT and
consequential follow up actions. The actual filing of appeal is to be ensured by the Assessing Officer (AO).

3. Time Lines for Filing of Appeals in ITAT under section 253 of the Act

Time lines, indicating clearly the responsibilities of each level involved in the process, for filing appeals
to ITAT have been laid down in Annexure-I to this instruction for strict adherence by all concerned.

i. Appeal Effect and Scrutiny Report

ii. On receipt of the order of the CIT(A), the AO shall give appeal effect promptly and properly. The
Range Head shall monitor correctness and timely appeal effect in respect of orders of CIT(A).
iii. Any pendency in regard to the appeal effect beyond one month shall be reported by the Range
Head to the CIT in the DO reporting monthly activities of the Range, along with reasons for the
delay.
iv. With a view to provide relevant inputs to the decision-making authority for filing appeals to ITAT,
a format for scrutiny report is prescribed herewith at Annexure-II.
v. In respect of appeals decided in favour of revenue, the AO shall submit only Part-I of the proforma
in Annexure-II to the Range Head and there will be no need to fill in other parts of the proforma
in such cases.

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4. Quality of Appeals

i. The CsIT shall ensure that appeals to ITAT are filed only where there is proper justification. Orders
of CIT(A) on factual issues should be accepted unless the findings are perverse.

ii. While giving comments/recommendations or taking decision to contest CIT(A)’s order,

the officers concerned shall, inter alia, ensure that the following issues have been taken
into consideration:

a. Facts of the case and basis of addition/disallowance are clearly brought out.

b. Reasons for granting relief by the CIT(A) on the relevant issues are clearly spelt out.

c. The reasons as to why the CIT(A) was not justified in recording the findings of fact or
law on each issue are clearly brought out. Evasive stand or ambiguous language is to
be avoided.

d. If any factual finding by CIT (A) is inconsistent with or contrary to the material on
record, the relevant material should be clearly identified to show perversity.

e. Cogent reasons for the decision to file appeal on relevant issues are properly and clearly
recorded by the CIT, as this will constitute the basis for further litigation in appropriate
cases.

f. The grounds of appeal arising out of the order of CIT(A) are carefully drafted to clearly
spell out the grievance of the department and the relief sought.

g. In case of mixed question of facts and law, the grounds of appeal should clearly bring
out specific legal and factual issues to be contested.

h. The grounds are precise and not argumentative.

iii. Along with authorization memo under section 253 (2) and grounds of appeal, the CIT shall send
a copy of comments of Range Head and reasons for his own decision authorizing appeal to the
AO for his record and guidance.

iv. In case appeal has not been authorized against adverse order of the CIT(A), the decision should
be conveyed to the AO along with copy of scrutiny report containing reasons for acceptance.

5. Proper Judicial Record Management System

5.1 The CIT shall, inter alia, ensure that once appeal to ITAT is authorized against the order of
CIT (A), a separate judicial folder for the assessee for a particular year is maintained in his office.
Among other things, the folder should have a copy of relevant assessment order (along with copies
of key documents used as evidence in support of additions made), a copy of the remand report, if
any, and the scrutiny report submitted by the authorities below.

5.2 Such judicial folder should be easily retrievable for scrutiny of ITAT order or Judgment of
the High Court, as the case may be, at the time of considering further appeal in the case, if any. A

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similar judicial folder in respect of assessee’s appeal under section 253 filed in ITAT, containing
a copy of appeal memo filed by the assessee and other relevant documents should also be maintained
for the aforesaid purpose.

6. Transfer of Jurisdiction outside CIT’s Charge During Pendency of Appeal

6 .1. In case of transfer of jurisdiction over a case from one CIT to another CIT charge during
pendency of appeal, the transferor AO shall, while transferring the case records along with the
judicial folders in CIT’s office to the transferee AO, duly inform the change of jurisdiction to the
Registrar ITAT with a copy to his CIT’s office. This fact of intimation to the Registrar ITAT shall
also be mentioned by him in the transfer memo. This procedure shall apply to the appeals filed by
the department as well as by the assessee.

6 .2. In such cases, if the ITAT order is received by the transferor CIT, he shall immediately
return the same to the Registrar ITAT referring to the earlier intimation of transfer of jurisdiction
and informing that in view of the transfer of jurisdiction it is the transferee CIT who holds
jurisdiction over the case and as such the service of the order should be made on him. A copy of
the communication to the Registrar should be endorsed to the transferee CIT along with the copy
of Tribunal’s order for taking further necessary action.

6 .3 In case of transfer of jurisdiction over a case involving two different Benches of ITAT
during the pendency of appeal, necessary steps shall be taken by the transferor CIT to request the
ITAT Bench where the case is pending to transfer the same to the Bench of ITAT having jurisdiction
over the cases of transferee AO. The matter may also be coordinated with the transferee CIT.

7. Preparation of Memorandum of Appeals/Papers etc.

The Range Head shall ensure that:

i. Once the grounds and authorization under section 253(2) for filing appeal are received
from CIT, Form No. 36 i.e. Memo of appeal is duly filled-in and filed by AO, with all
necessary annexures, in the registry of ITAT before expiry of limitation.

ii. The ITA No. of the appeal filed is obtained by AO and recorded on other sets (including
office copy) of the appeal papers. The Range Head should communicate the same to the
CIT within the prescribed time limit as in Annexure-I.

iii. There is proper vetting of Memorandum of Appeals as regards relevant facts therein before
the appeal is actually filed.

iv. Necessary particulars including the correct PAN, tax effect involved are mentioned.

v. All annexures including copies of orders of authorities below are properly typed as per
ITAT Rules to avoid defects/office objections.

vi. In case, any document such as agreement, seized papers, depositions etc. are crucial to the
issues involved and considered by lower authorities, a copy of the same must be referred
to at relevant place in appeal memo and its copy annexed thereto.

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8. Filing of Appeal and Subsequent Monitoring

The CIT shall put in place proper mechanism with defined responsibility of different levels of
officials in his charge to ensure that:

i. The appeal is filed in the ITAT within prescribed time limit as in Annexure-I.
ii. ITA/WTA Number allotted by the registry is obtained and recorded in judicial folder in
CIT’s office as mentioned in check list/proforma for scrutiny report on CIT(A) order at
Annexure-II.
iii. In case, the registry of the ITAT notifies any defect, immediate steps are taken by the AO
concerned to remove the same with the assistance of the office of CIT (DR) or Senior DR
as the case may be.
iv. One set of appeal memo is kept with the AO for linking the same with the relevant assessment
record.
v. One set of appeal memo is kept in the office of CIT for placing the same in judicial folder.
vi. The appeals are followed up and the Department is effectively represented at every hearing
stage.
vii. Proper coordination with the Departmental Representative is maintained at every stage by
Range Head.
viii.The details and information called for by the ITAT/DR should be furnished (in quadruplicate)
at the earliest and, in any case at least three days before the date fixed for hearing before
the ITAT.

9. Appeals/Cross Objections Filed by the Assessee

9.1 In cases where appeal to ITAT against the order of CIT(A) is filed by the assessee (whether
department has filed appeal or not), the CIT shall ensure to put in place proper mechanism to
examine the desirability of filing cross-objections (CO) in suitable cases. As soon as the memo of
appeal filed by the assessee is received, a file should be opened in the office of CIT and assigned a
proper identification number incorporating the ITA No. allotted by the ITAT and further necessary
action taken.

9.2 Officers have to be alert particularly in those cases where CIT(A)’s order was not acceptable
but appeal was not filed as tax effect was below the prescribed limit. If the assessee has filed appeal
in ITAT in such cases, the CIT shall direct the AO to file cross-objections against that part of the
CIT(A)’s order to which he objects, within statutory time limit.

10. Compliance of ITAT Directions

The CIT shall put in place proper mechanism to ensure timely and due compliance to the
directions of the ITAT. Close co-ordination between field officers, CIT (DR) and Departmental
Representative in the ITAT has to be ensured so that directions are communicated in time and
proper compliance is made to the satisfaction of the Tribunal.

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11. Orders of ITAT containing strictures etc.
Orders of the ITAT containing strictures or those which are contrary to Board’s orders,
notifications, instructions, circulars etc. shall be brought to the notice of the Board (concerned
division) immediately by the CIT through CCIT/DGIT under intimation to ITJ section of the
Board.

12. Assistance to Departmental Representatives

The Range Head shall ensure that the AO sends a copy of the scrutiny report, comments of
Range Head and decision of CIT, to the DR office along with the DR’s copy of appeal papers
immediately after filing of appeal and obtaining ITA No. Whenever, DR requires any records,
clarification or other material, including paper book to be submitted to ITAT, the CIT and Range
Head shall ensure that the requirements are complied with promptly.

13. Monitoring Mechanism

i. The CIT shall ensure that appeals to ITAT are filed within prescribed time and pursued
properly.

ii. The CIT shall intimate to the CCIT in his monthly DO, the instances of delayed appeals
to ITAT along with the reasons and corrective actions taken. The CCIT shall review due
adherence to this instruction on a quarterly basis and take appropriate measures in case of
deviations.

iii. The cases of material deviations from this instruction, if any, shall be brought to the notice
of ITJ section of the Board by the CCIT.

14. This Instruction shall apply to appeals to be filed in ITAT with effect from 22nd August, 2011.

15. Hindi version of instruction to follow.

Note: Reference to the CCIT/CIT in this Instruction includes DGIT/DIT as the case may be.

Annexure-I
TIMELINES FOR FILING APPEAL TO ITAT

Sl. No. of Total

Stages
No. days Time

1. Receipt of CIT(A)’s order in the office of CIT 0 day 0 day

Sending the order to AO for necessary action along with a copy to Range
2. 5 days 5 days
Head

Entry in the relevant register and submission of scrutiny report in 25 30

3.
prescribed proforma by AO to Range Head after giving appeal effect days days

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Submission of recommendation by Range Head on scrutiny report to CIT 10 40

4.
along with draft grounds of appeal days days

Decision making by the CIT including finalization of grounds of appeal and 47

5. 7 days
sending the same to AO days
53
6. Actual filing of appeal in ITAT by AO 6 days
days
55
7. Intimation of Diary/lodging to the office of CIT 2 days
days

Annexure- II

Proforma for ‘Scrutiny Report’ on CIT(A)’s order

Limitation to file appeal under section 253 expires on:
(Parts 1 to 4 are to be filled-in by the AO and 5 to 6 by Range Head)

TO BE FILLED IN ALL THE CASES OF ORDERS OF CIT(A)

1. Particulars from the order under scrutiny

i. Name and address of the assessee

ii. PAN

iii. Assessment Year

iv. Appeal No. and date of the order

v. Date of receipt of the order in the office of CIT

vi. Date of giving appeal effect

vii. Overall Tax effect of the order

TO BE FILLED ONLY WHERE ORDERS OF CIT(A) ARE ADVERSE TO REVENUE

2. Analysis of the order under scrutiny

i. Whether it is combined order for more than one assessment years Yes/No

If yes, specify assessment years involved and identify specific issues related to different
ii.
assessment years for filing separate appeals. Use Annexure, if required.

iii. Whether it is combined order for more than one assessee/group case? Yes/No

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 iv. If yes, whether jurisdiction of all assesses falls in the same Range? Yes/No

If reply to (iv) above is no, identify the AO/Range/CIT having jurisdiction over other
v.
assessees for communication of stand taken on common issues?

If the proceeding of order under scrutiny was dependent on some other proceedings (say
order under section 263/set aside order/Registration under section 12A/Approval etc.),
vi.
specify the present appellate status of the other proceedings along with ITA No./W.P.
No. etc.
vii. Whether any additional ground was admitted by the CIT(A)? Yes/No

viii. If yes, whether the AO was intimated of the new grounds? Yes/No

ix. Whether any additional evidence was admitted by CIT(A)? Yes/No

If yes, whether opportunity to AO was granted under Rule 46A to give comments/count- Yes/No/
x.
er the same? NA

3. Scrutiny report on appellate order

A. If the tax effect in l(vii) above is below prescribed monetary limit and case does not
fall in any exception of Instruction on monetary limits for filing appeals for the time
being in force, detailed scrutiny may not be taken up and only general recommendation
as to whether decision of CIT(A) is prima facie acceptable on merits or not, may be
given.
B. In cases other than at ‘A’ above, the AO in his scrutiny report shall cover following
points, as may be applicable, on each issue where relief is allowed by CIT(A), in a
separate Annexure
i. Relief allowed by the CIT(A):-

Description of issue involved in brief,

Basis of addition/disallowance made in assessment order,

Reasons for grant of relief by CIT(A),

(Relevant page/para No. of assessment order and CIT(A)’s order for each issue may also be specified)

ii Tax effect in respect of each issue on which relief is allowed by CIT(A) is to be worked out separately.

iii Whether any remand report was called for by the CIT(A)?

iv. If yes, AO’s comments in brief on relevant issues above should be given. Specify whether relief
by CIT(A) is in conformity with AO’s views in the remand report?

(Attach copy of CIT(A)’s letter/order calling for the report and also the remand report submitted-
by the AO along with assessment order).

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v. Whether any factual finding given by CIT(A) is contrary to the material on record? If yes, speci-
fy in detail indicating specific para of order under scrutiny& material on record contradicting such
a finding.

vi. If the decision of CIT(A) is not acceptable, specify reasons(also taking into account the remand re-
port, if any, on the issue)

vii.* Whether similar issue was involved in the case of assessee in earlier years? If yes, status
of appeal etc. may be indicated.

viii. If the same issue is involved in subsequent year in the case of assessee, the stand/action
taken by AO/status of appeal, if any, may be indicated.

ix. Has CIT(A) relied upon any judicial decision? If yes, has a copy been annexed or citation
given in case of reported decisions? (Note: Whether the relied upon decision has been
challenged in further appeal? If so, the present status may be given.)

x. Whether the issue arises out of audit objection?

xi. If yes, whether audit objection is included in Draft Para? Also state whether Audit objtion
has been accepted by the department or not.

*Item vii is extremely important, if applicable, (the involvement of issue in earlier year may
already be indicated in assessment order or CIT(A)’s order)

4. General
i. Aggregate of tax effects in 3B(ii) above

ii. Whether the tax effect above is below the limit prescribed for filing of appeal in CBDT Yes/No/NA
Instruction on monetary limits?

iii. Whether the case falls in any of the exceptions laid down in the said Instruction? If so,
specify clause No.?

iv. Due date for submission of report to Range head (30 days from the date of receipt
of CIT(A)’s order in the office of CIT)

Submitted to the Addl./Jt. CIT, Range- …………………. for kind consideration & further
action. The assessment records in volumes are also sent herewith.

Date: Signature

Place: Name & Designation of the AO

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5. Recommendation of Range head on scrutiny report by AO
i. For each issue on which relief is allowed by the CIT(A) specify the issue involved
with proper referencing:-
(issues involved to be mentioned in brief, for illustration- disallowance of interest
for interest free loan given; repair expenses treated as capital; accrual of interest
income on Bonds; deduction under section 80-IB etc.)

ii. Whether any additional evidence was admitted without granting opportunity to
AO? If yes, give details.
iii. Whether any finding off act given by CIT(A) is inconsistent with material on re-
cord, making his order perverse? (see Note below)

iv. If so, give details and explain which parameters of perversity are satisfied and
how? (Refer to Note below)

v. Whether there are any mistakes apparent from record which require filing of
rectification application before CIT(A)?

vi. Whether the decision of CIT(A) is acceptable on merits? If not, give reasons for
each issue.
vii. Draft specific ground to be taken before ITAT.

6. Final Summary of report

Appeal is recommended on issues Nos. ….,……&……

Aggregate tax effect on issues on which appeal is recommended

Due date for submission of report in CIT office(40 days from the date of receipt of
CIT(A) order in CIT office)

Submitted to the CIT..............................................for kind consideration & further action.

Date: Signature of the Range head

Place: Name & Designation

7. Decision by the CIT on the scrutiny report

a. Issue wise decision of the CIT, as to whether appeal is to be filed or not, may be recorded
with reasons, keeping in view the line of argument the DR is expected to take before
ITAT at the time of hearing:
Issue No1.

Issue No.2...................................and soon

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Aggregate tax effect on issues proposed to be contested in the ITAT

b. Grounds of appeal to be raised before the ITAT may be framed in respect of the issues
not accepted by the CIT.
c. In case of a combined order or order in a group case, involving more than one assessee
falling under jurisdiction of different CsIT, the CIT shall communicate the stand taken
on common issues to the CIT having jurisdiction over other case(s).

8. Categorization of final decision by CIT

a. The appeal Is not to b e-filed

i. As the order is acceptable on merits, or
ii. Even though the order is not acceptable, appeal is not being filed only on the consideration
that the tax effect is less than the limit prescribed in CBDT’s Instruction on monetary
limits.

b. Appeal is to be filed on the ‘grounds of appeal’ framed above

i. As the order is not acceptable on merits, or

ii. Though tax effect is below the prescribed limit, the case falls under the exceptions (to
be specified) of the Instruction of CBDT on monetary limits.
iii. Authorization under section 253(2) of the I.T. Act is issued separately. Appeal to be
iv. filed accordingly.

Date: Name & Signature

Place: Commissioner of Income-tax

9. Filing of appeal

i. After decision of the CIT, the DCIT/ACIT/ITO(J) shall send authorization letter and
grounds of appeal along with the scrutiny report to the AO and ensure that appeal to
ITAT is filed within time limit.

ii. A copy of scrutiny report is to be sent to the DR along with his copy of appeal papers.
(NOT TO BE ENCLOSED WITH OTHER SETS TO BE FILED IN ITAT)

The ITA No. and date of filing should be obtained from AO and recorded. ITA

No.:…………………dated……………….:

Note on perversity:

An order or finding is perverse on facts, if it falls under any of the following categories:

a. The finding is without any evidence. Briefly indicate how it is so.

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 b. The finding is contrary to the evidence. Briefly state how it is so with particular reference
to documents on record.

c. There is no direct nexus between the conclusion off act and primary fact upon which
that conclusion is based? If it is so, briefly state how it is so.

d. When an authority draws a conclusion which can not be drawn by any reasonable
person or authority on the material and facts placed beforfe it. (Sudarshan Silk & Sarees
vs CIT 300 ITR 205 SC).

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ANNEXURE B1: CIR.NO.8/2023 Revision of exceptions to monetary

limits for filing appeals deferred under provisions of section 158AB dtd.
31.05.2023.
Circular No.8/2023

No. 279/Misc./M-93/2018-1TJ(Pt.)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes, New Delhi

Dated the 31st May, 2023

Sub:- Revision of exceptions to monetary limits for filing appeals deferred under provisions of
Section 158AB—reg.

Ref:- 1. CBDT letter F.N0.279/Misc.142/2007-1TJ(Pt.) dated 20.08.2018

2. CBDT letter F.N0.279/Misc./M-93/2018-1TJ(Pt.) dated 29.09.2022
3. CBDT Letter F.N0.279/Misc./M-93/2018-1TJ(Pt.) dated 24.01.2023

1. The Board has, from time-to-time, revised monetary thresholds for filing appeals before various
judicial fora. The last such revision was through Circular No. 17/2019 dated 08.08.2019.
Exceptions to the monetary limits are as per Board’ s letter F. No. 279/Misc.142/2007-1TJ(Pt.)
dated 20.08.2018 and 0M issued vide F. N0.279/Misc./M-93/2018-1TJ(Pt.) dated 16.09.2019.

2. In this respect the insertion of Section 158AB in the Income Tax Act, 1961 [hereinafter referred
to as the Act] has led to queries on monetary limits and exceptions applicable in respect of
cases falling within the purview of Section 158AB of the Act. In supersession of the letter
dated 29.09.2022, referred to above, the following guidelines on the above subject are hereby
issued:

3. At the outset it is clarified that references to collegiums constituted u/s 158AB of the Act for
deciding on the deferral of appeal(s)/grounds of appeal(s) would be made having regard to
the extant monetary limits read along with the exceptions to the same, as mentioned in para 1
above and the exceptions provided in para 6 below.

4. The following terminology is proposed in respect of para 5 below:

i. Yo: the current year in which appeal filing is under consideration, and
ii. Yf•. the year in which the final decision on the question of law is received in favour of
Revenue in the ‘other case’ (‘other case’ being as referred to in section 158AB of the Act).

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5. Scenarios on the applicability of monetary limits:

i. In cases where only one ground is contested and where the tax effect is greater than the
monetary threshold as per the extant monetary limits for filing appeals at relevant judicial
fora, set by CBDT, and section 158AB is applicable to it, appeal may be deferred in the
current year (Yo) in view of the provisions of section 158AB. The appeal is to be filed in
the year in which the final decision on the identical question of law is received in favour
of Revenue in Yf.

ii. In cases where multiple grounds are contested and where the total tax effect of all the
disputed grounds (i.e., grounds to which Section 158AB is applicable and otherwise) is
greater than the extant monetary limits for filing appeals at relevant judicial fora, set by
CBDT, and Section 158AB is applicable only to certain grounds, the guidelines for filing
appeal are as follows:
(a) in the current year (Yo),
i. filing of appeal on the grounds to which section 158AB is applicable may be
deferred in view of the provisions of that section, and
ii. appeal may be filed on the residual grounds.

(b) in the year in which the final decision on the identical question of law is received in
favour of Revenue in Vf, appeal is to be filed on the grounds to which section 158AB
is applicable, irrespective of the monetary limit at that point in time.

6. In respect of deferring appeals u/s 158AB of the Act, while adhering to the guidelines as laid
down in the preceding paras, it is to be ensured that when judicial finality is achieved in favour of
Revenue in the ‘other case’, appeal in the ‘relevant case’ should be contested on merits subsequent
to the decision in the ‘other case’ irrespective of the extant monetary limits. Further, if the judicial
outcome in the ‘other case’ is not in favour of Revenue and is not accepted by the Department,
appeal against the same may be contested on merits in the ‘other case irrespective of the extant
monetary limits, to arrive at judicial finality.
7. The above shall come into effect from the date of issue of this letter and may be brought to the
knowledge of all officers working in your region.
8. This issues under section 268A of the Income Tax Act.
(Devaki Niranjana)
DCIT(OSD),ITJ-II,CBDT

Copy to:
1. Chairman, Members and all other officers in CBDT of the rank of Under Secretary and
above.
2. All Pr. Chief Commissioners of Income Tax and all Directors General of Income Tax
with a request to bring to the attention of all officers.

(Devaki Niranjana)

DCIT(OSD), ITJ-II,CBDT

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ANNEXURE B2: Cir.No.F.No.279/Misc.142/2007/ITJ(PT) dated 15.3.2024

(Circular No 5/2024): In supersession of all earlier Circulars, the Board has vide this
Circular amended the exceptions to filing appeals in all judicial fora.
Circular No. 5/2024
F. No. 279/Misc.142/2007-ITJ (Pt.)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi the 15th March, 2024

Subject: Circular u/s 268A of the Income-tax Act, 1961 for filing of appeals by the
Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before
Supreme Court-measures for reducing litigation-Reg.

Ref 1: Circular No. 3/2018 dated 11.07.2018

Ref 2: Circular No. 17/2019 dated 08.08.2019
Ref 3: Board’s letter in F.No.279/Misc. 142/2007-ITJ (Pt) dated 20.08.2018

Reference is invited to the above wherein monetary limits and other conditions for filing
Departmental appeals under the Income-tax Act, 1961 (hereinafter referred to as the Act) before
Income Tax Appellate Tribunals (`ITAT’), Hon’ble High Courts (`HCs’) and Special Leave
Petitions (` SLPs’)/ appeals before Hon’ble Supreme Court (` SC’) were specified by the Central
Board of Direct Taxes (`CBDT’ or ‘Board’).

2. In supersession of the above referred communications issued by CBDT, the following may be
noted in respect of departmental appeals to be filed before ITATs and HCs and SLPs/ appeals
before SC:
3.1. Monetary limits given in paragraph 4 with regard to filing appeal/SLP shall be applicable to
all cases including those relating to TDS/TCS under the Act with the following exceptions where
the decision to appeal/file SLP shall be taken on merits, without regard to the tax effect and the
monetary limits:

a. Where any provision of the Act or the Rules or notification issued thereunder has been
held to be constitutionally invalid, or
b. Where any order, notification, instruction or circular of the Board or the Government
has been held to be illegal or ultra vires the Act or otherwise constitutionally invalid, or
c. Where the assessment is based on information in respect of any offence alleged to have
been committed under any other law received from any of the law enforcement or
intelligence agencies such as CBI, ED, DRI, SFIO, NIA, NCB, DGGI, state law enforcement
agencies such as State Police, State Vigilance Bureau, State Anti- Corruption Bureau,
State Excise Department, State Sales/Commercial Taxes or GST Department, or

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 d. Where the case is one in which prosecution has been filed by the Department in the
relevant case and the trial is pending in any Court or conviction order has been passed
and the same has not been compounded, or

e. Where strictures/adverse comments have been passed and/or cost has been levied against
the Department of Revenue, CBDT or their officers, or

f. Where the tax effect is not quantifiable or not involved, such as the case of registration
of trusts or institutions under sections 10(23C), 12A/ 12AA/12AB of the Act, order passed
u/s 263 of the Act etc. The reference to cases involving sections referred here, where it
is not possible to quantify tax effect or tax effect is not involved, is for the purpose of
illustration only.

g. Where addition relates to undisclosed foreign income/undisclosed foreign assets (including

financial assets)/undisclosed foreign bank account, or

h. Cases involving organized tax evasion including cases of bogus capital gain/loss through
penny stocks and cases of accommodation entries, or

i. Where mandated by a Court’s directions, or

j. Writ matters, or

k. Matters related to wealth tax, fringe benefit tax, equalization levy and any matter other
than the Income Tax Act, or

l. In respect of litigation arising out of disputes related to TDS/TCS matters in both domestic
and International taxation charges:-

m. Where dispute relates to the determination of the nature of transaction such that the
liability to deduct TDS/TCS thereon or otherwise is under question, or

n. Appeals of International taxation charges where the dispute relates to the applicability
of the provisions of a Double Taxation Avoidance Agreement or otherwise

o. Any other case or class of cases where in the opinion of the Board it is necessary to contest
in the interest of justice or revenue and specified so by a circular issued by Board in this
regard.

3.2. Attention is drawn to Circular No. 8/2023 issued vide F.No. 279/Misc./M-93/2018-ITI(Pt.)
dated 31.05.2023 in respect of deferral of appeals u/s 158AB of the Act. Exceptions in such cases
operate as follows:

a. When judicial finality is achieved in favour of Revenue in the ‘other case’, appeal in
the `relevant case’ is contested on merits subsequent to the decision in the ‘other case’
irrespective of the extant monetary limits.

b. If the judicial outcome in the ‘other case’ is not in favour of Revenue and is not accepted
by the Department, appeal against the same may be contested on merits in the ‘other case’
irrespective of the extant monetary limits, to arrive at judicial finality.

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4.1. Appeals/ SLPs, not falling in the exceptions as detailed in para 3 above, shall not be filed in
cases where the tax effect does not exceed the monetary limits given hereunder:

S. No. Appeals/ SLPs in Income-tax matters Monetary Limit (Z)

1. Before Appellate Tribunal 50,00,000

2. Before High Court 1,00,00,000

3. Before Supreme Court 2,00,00,000

4.2. It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds
the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of
the case. The officers concerned shall keep in mind the overall objective of reducing unnecessary
litigation and providing certainty to taxpayers on their Income-tax assessments while taking a
decision regarding filing an appeal.

5.1. For this purpose, ‘tax effect’ means the difference between the tax on the total income assessed
and the tax that would have been chargeable had such total income been reduced by the amount of
income in respect of the issues against which appeal is intended to be filed (hereinafter referred to
as ‘disputed issues’). Further, ‘tax effect’ shall be tax including applicable surcharge and cess.
However, the tax will not include any interest thereon, except where chargeability of interest itself
is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest
shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect
would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean
quantum of penalty deleted or reduced in the order to be appealed against.

5.2. Further, where income is computed under the provisions of section 115JB or section 115JC,
for the purposes of determination of ‘tax effect’, tax on the total income assessed shall be computed
as per the following formula-

(A-B) + (C-

D) where,

A = the total income assessed as per the provisions other than the provisions contained in
section 115JB or section 115JC (herein called general provisions);

B = the total income that would have been chargeable had the total income assessed as per the
general provisions been reduced by the amount of the disputed issues under general provisions;

C = the total income assessed as per the provisions contained in section 115JB or section 115JC;

D = the total income that would have been chargeable had the total income assessed as per the
provisions contained in section 115JB or section 1I5JC was reduced by the amount of disputed
issues under the said provisions:
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 However, where the amount of disputed issues is considered both under the provisions
contained in section 115JB or section 115JC and under general provisions, such amount shall
not be reduced from total income assessed while determining the amount under item D.

5.3. The Assessing Officer shall calculate the tax effect separately for every assessment year in
respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the
disputed issues arise in more than one assessment year, appeal can be filed in respect of such
assessment year or years in which the tax effect in respect of the disputed issues exceeds the
monetary limit specified in para 4.1. No appeal shall be filed in respect of an assessment year or
years in which the tax effect is less than the monetary limit specified in para 4.1. Further, even
in the case of composite order of any High Court or appellate authority which involves more
than one assessment year and common issues in more than one assessment year, no appeal shall
be filed in respect of an assessment year or years in which the tax effect is less than the monetary
limit specified in para 4.1. In case where a composite order/ judgement involves more than one
assessee. each assessee shall be dealt with separately. It is clarified that the contents of this
paragraph are subject to para 3.2, above.

5.4. For calculating the tax effect of cases involving TDS/TCS, the cumulative effect, of all
orders passed for an assessment year of a deductor, shall be taken into account and shall include
interest u/s 201(1A) of the Act.

6.1. In a case where appeal before a Tribunal or a Court is not filed only on account of the tax
effect being less than the monetary limit specified above, the Pr. Commissioner of Income-tax/
Commissioner of Income-tax shall specifically record that,

“Even though the decision is not acceptable, appeal is not being filed only on the
consideration that the tax effect is less than the monetary limit specified in the CBDT
Circular dated”.

6.2. Further, in such cases, there will be no presumption that the Income Tax Department
has acquiesced in the decision on the disputed issues. The Income Tax Department shall not be
precluded from filing an appeal against the disputed issues in the case of the same assessee for any
other assessment year, or in the case of any other assessee for the same or any other assessment
year, if the tax effect exceeds the specified monetary limits.

7. In the past, a number of instances have come to the notice of the Board, whereby an assessee
has claimed relief from the Tribunal or the Court only on the ground that the Department has
implicitly accepted the decision of the Tribunal or Court in the case of the assessee for any other
assessment year or in the case of any other assessee for the same or any other assessment year, by
not filing an appeal on the same disputed issues. The Departmental representatives/ counsels must
make every effort to bring to the notice of the Tribunal or the Court that the appeal in such cases
was not filed or not admitted only for the reason of the tax effect being less than the specified
monetary limit and, therefore, no inference should be drawn that the decisions rendered therein
were acceptable to the Department. Accordingly, they should impress upon the Tribunal or the
Court that such cases do not have any precedent value and also bring to the notice of the Tribunal/
Court the provisions of sub section (4) of section 268A of the Act which read as under:

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 HAND BOOK ON JUDICIAL MATTERS

“(4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to
the orders, instructions or directions issued under sub-section (1) and the circumstances under
which such appeal or application for reference was filed or not filed in respect of any case.”

8. As the evidence of not filing appeal due to this Circular may have to be produced in courts,
the judicial folders in the office of Pr.CsIT/CsIT must be maintained in a systematic manner for
easy retrieval. In cases where appeals are not being filed due to low tax effect despite the
judgment not being acceptable on merits or appeals are being filed despite low tax effect in view
of exceptions, the Pr. CIT/CIT shall submit a monthly report, to the CIT(J)/Addl./Jt. CIT(J)
office, as per Annexures-A 1 and A2, respectively of CBDT’s Instruction No. 1/2024 dated
09.02.2024 (issued in F.No. 279/Misc./33/2014-ITJ). Further, the CIT(J)/ Addl/Jt CIT(J) office
shall collate and disseminate the departmental stand, as regards filing of appeals, in respect of
the issues involved in such appeals, within the region.

9. The above may be brought to the notice of all concerned.

10. This issues under section 268A of the Act and shall come into effect from the date of issue
of this Circular. This Circular will apply to SLPs/appeals to be filed henceforth before the SC/
HCs/Tribunals.

11. Hindi version will follow.

(Tanay Sharma)
Jt.CIT(OSD)-ITJ, CBDT
New Delhi

Copy to:

1. The Chairman, Members and all officers in CBDT of the rank of Under Secretary
and above.

2. All Pr. Chief Commissioners of Income Tax and All Directors General of Income
Tax with a request to bring to the attention of all officers.

3. The Comptroller and Auditor General of India.

4. ADG (Vigilance), New Delhi.

5. The Joint Secretary & Legal Advisor, Ministry of Law & Justice, New Delhi.

6. All Directorates of Income-tax, New Delhi and DGIT (NADT), Nagpur.

7. Hindi Cell for translation.

8. Guard file.
Jt.CIT(OSD)-ITJ, CBDT
New Delhi
139
ANNEXTURE B3: INSTRUCTION 7/2016 Revision of the Guidelines for
engagement of standing counsels to represent the Income-Tax Department before High
Courts and other judicial forums; revision of their Schedule of fees and related matters
vide F. NO. 279/MISC/ M-75/2011-ITJ(PART-II) dated 7 TH September ,2016.

Instruction No. 7/2016

F No 279/Misc./M- 75/2011 -ITJ (Part-II)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi the 7th September, 2016

To,
All Principal Chief Commissioners of Income-tax

Sub: Revision of the Guidelines for engagement of Standing Counsels to represent the Income-
tax Department before High Courts and other judicial forums; revision of their Schedule of fees
and related matters- regarding
1. With a view to ensure improved representation before the High Courts and other judicial forums
and in supersession of Instruction No 3/2012 on the subject, Board has laid down following
guidelines for engagement of Standing Counsels.
2. It must be ensured that the process for engagement of Standing Counsels should be initiated
at least 6 months before the expiry of the panel. The size of the panel should be carefully
decided based on the pendency of appeals (on an average one Senior Counsel can handle 450-
500 appeals). A buffer of at least 25% of the required strength or a workable buffer should be
considered while determining the size of panel. The panel of counsels proposed along with the
buffer (hereafter called “extended panel”) shall be forwarded to Board. It must be noted that
the buffer in the extended panel will not be entitled for any compensation or remuneration or
retainership etc. The names in the extended panel would be considered in cases of exigencies
like resignation/termination etc. of the counsel in the panel. Further, the names in the extended
panel would be proposed by the Pr. CCIT/CCIT immediately following such exigency for
regular empanelment to Board. The tenure of such counsel/s would be valid for the remainder
of the tenure of the panel. Having this extended panel ready would ensure that time is not lost
in re-doing the whole process of advertisement etc. for filling up one or two vacancies in the
panel. It is further suggested that the ratio of senior counsel to junior counsel should normally
be 1:1. However, the Pr.CCIT/ CCIT may decide otherwise depending on the local conditions.

3. The proposal of the Pr. CCIT/ CCIT shall invariably include:

a. Composition of the Screening Committee.
b. Pendency of appeals.

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 HAND BOOK ON JUDICIAL MATTERS

c. Minutes of the meeting with details of selection procedure starting from placing
advertisement to final evaluation.
d. List of existing Counsels along with number of cases handled by each and their
outcome/performance evaluation and reasons for their non-inclusion in the fresh
panel, if any.
e. Grading/evaluation list of the fresh panel.
4. The procedure for engagement of Standing Counsels, requisite qualifications and terms and
conditions of their engagement shall be as per guidelines in Annexure I.
5. The Standing Counsels will be engaged in accordance with the revised schedule of fees and
related terms and conditions applicable to them as given in Annexure-Il.
5.1 These guidelines and the revised schedule of the fee and allowances shall come into effect
from 07.09.2016.
5.2 The Standing Counsels will be paid fee at the old rates in respect of their appearance and
other work done by them prior to 07.09.2016 and at the revised rates in respect of the work
done by them on or after 07.09.2016
6. This issues with the concurrence of Ministry of Law and Justice vide their I.D. No J-11019/2/2016
Judl, dated 27.05.2016 and the Department of expenditure ID/ No. 9(4)/2012-E.II(B) dated 1st
September,2016
7. This Instruction may be brought to the notice of all Officers concerned.
8. Hindi version of the Instruction will follow.
(D.S.Rathi)
DCIT(OSD)
(ITJ)C.B.D,T.
Copy to:

1. The Chairman, Members and other officers in CBDT of the rank of Under Secretary
and above.
2. The Comptroller and Auditor General of India
3. DGIT(Vigilance), New Delhi
4. The Joint Secretary & Legal Advisor, Ministry of Law & Justice, New Delhi.
5. Department of Expenditure, Ministry of Finances New Delhi w.r.t. their I.D. No.
9(4)/2012-E.II(B) dated 1st September,2016
6. Principal Chief Controller of Accounts, 9th Floor, Lok Nayak Bhawan, Khan Market,
New Delhi
7. The DGIT(Systems), ARA Centre, Jhandewalan Extension, New Delhi
8. DIT(PR, PP & OL), Mayur Bhawan, New Delhi for printing in the Tax Bulletin and
for circulation.

(D.S.Rathi)
DCIT(OSD)(ITJ)
C.B.D.T,

141
ANNEXURE-I

PROCEDURE FOR ENGAGEMENT OF STANDING COUNSELS

1. Category of Standing Counsels

The Standing Counsels engaged/to be engaged by the department will fall into the following
two categories:
a. Senior Standing Counsel
b. Junior Standing Counsel

In a station where counsels do not have sufficient experience to be engaged as Senior Standing
Counsel, the CCIT may designate a Junior Standing Counsel to perform the functions of Senior
Standing Counsel for that station. The Standing Counsel so designated shall perform the function
or arguing cases before the Hon’ble High Court/ITAT in the absence of a Senior Standing Counsel.

2. Eligibility Conditions for engagement as Standing Counsel

The eligibility conditions for each category of counsels shall be as under:
2.1. Senior Standing Counsel: In order to be eligible for engagement as Senior Standing
Counsel, person should

a) be eligible to appear before the High Court as an advocate and

b) have a minimum experience of five years of handling direct tax matters before High
Courts or

ITAT as an advocate.

OR

have been a Junior Standing Counsel of the Department for three years OR

have been an officer of the Income-tax Department who is eligible to appear before the High
Court as an advocate and has retired/resigned from the post of Addl. Commissioner/Director of
Income-tax or any equivalent post after occupying such post for at least three years or any higher
post or who has been a member of ITAT, provided that he has not been removed/dismissed or
compulsorily retired from service on account of disciplinary action and no disciplinary proceeding
under service rules or pension rules is pending against him.

2.2. Junior Standing Counsel: In order to be eligible for engagement as Junior Standing
Counsel a person should
a) be eligible to appear before the High Court as an advocate and
b) have a minimum experience of three years of handling preferably direct tax matters
before High Courts or ITAT.

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 HAND BOOK ON JUDICIAL MATTERS

OR

have been an officer of the Income-tax Department who retired/resigned from the post of
Additional/ Joint CIT or below and is eligible to appear before the High Court as an advocate;
provided that he has not been removed/dismissed or compulsorily retired from service on account
of disciplinary action and no disciplinary proceeding under service rules or pension rules is pending
against him.

3. Procedure for engagement of Standing Counsels

3.1. For the purpose of engagement, the CCIT will call for applications in Proforma-A1 & A2
(as applicable), by advertisement in 1 (one) national and 2 (two) local newspapers, and from Bar
Association of High Court. The advertisement shall also be placed on the notice boards in all the
income-tax offices of the Region as well as Department’s Official website. It should, however, be
ensured that the process of engagement is transparent and broad based.

3.2. A Screening Committee headed by the CCIT and including at least two Officers not below
the rank of PCIT/PDIT/CIT/DIT and CIT (J), wherever possible, shall be formed for the purpose
of evaluation of proposals received. As far as possible, suitable representatives from fields like IT/
TP/ Exemptions shall also be included. In Delhi, Mumbai, Kolkata (WB & Sikkim), Chennai
(Tamil Nadu) and Bangalore (Karnataka & Goa), a Joint Secretary Level Officer from Ministry of
Law and Justice (MoLJ) may be requested to be part of the Screening Committee, In case there is
no timely response from the MOLJ, the Screening Committee may proceed without any further
delay.

3.3. Particulars of the applicants’ expertise in handling direct tax matters, aptitude for
interpretation and their suitability to represent the cases of the Department will be examined by the
Committee in an interview conducted for the purpose and an evaluation report along with
recommendation of the CCIT will be sent to the Board in Proforma-B. The evaluation shall be
done on the parameters enumerated in Proforma B-l and B-2 whereby marks would be awarded to
each candidate. The Committee shall fix a minimum benchmark for selection of candidates at the
beginning of the process. Candidates who are below the benchmark are not to be considered
irrespective of the number of vacancies.

3.4. Sr. Standing Counsels should preferably be taken from amongst the panel of Jr. Standing
Counsels of at least three years standing, subject to favourable assessment by the Screening
Committee. In assessing suitability, the quality of drafting, assistance to the appearing counsels
and co-ordination aptitude with the officers of the Department should be taken into account.

3.5. The engagement of panel shall normally be for a period of three years.

4. Performance review
4.1. The performance of the counsels shall be reviewed by the jurisdictional PCIT/CIT whose
cases have been represented by the Standing Counsel, on a quarterly basis and a report in
Proforma-C shall be submitted to CIT(Judicial) before 15th of the month following end of each
quarter.

143
 4.2. On the basis of the reports received from the CCIT, the CCIT/ CIT (J) shall review the
performance of the counsels for every financial year and send an annual report to the Board
15i0n Pro forma-D before 30th June of the following year.

5. Allocation of Standing Counsels to PCIT/CIT Charges

5.1. The CCIT will be the overall in charge of entire litigation work on behalf of the Income-
tax Department in his region before the High Court concerned. Allocation of panel of standing
counsels to PCIT/CIT charges has to be done by the CIT (J) under instructions from/ approval of
the CCIT. In places where post of CIT (J) is not provided for, this work should be undertaken by
the Addl. CIT (J)/Technical working in the 0/o Pr.CCIT under instructions from/ approval of the
CCIT. Equitable distribution of 450-500 appeals to each Senior Standing Counsel must be ensured.
5.2. Normally, the Advocate from the panel of Sr. Standing Counsels should be authorized to
argue cases. However, the CCIT concerned may authorize Junior Standing Counsels to argue in
such matters as deemed fit. It must be ensured that 20% of cases are assigned to such Junior
Standing Counsels, who have at least I year experience as Junior Standing Counsel, to be argued
independently by him/her.

6. Termination of engagement/resignation/expiry of term

The engagement of the Counsel would be terminable through written intimation by either side
without assigning any reason, The CCIT is authorized to act on behalf of the Department for the
purpose under intimation to the Board. On expiry of the term or termination or resignation, the
Standing Counsel shall immediately handover the briefs and other related papers to the PCIT/CIT
concerned or the other Standing Counsels nominated by the CCIT for the purpose and the pending
bills of the counsel shall be settled within three months of the submission of the bill

7. Duties of the Standing Counsel

A. The Counsel shall

7.1. draft Memorandum of Appeals and related petitions/applications within reasonable time,
keeping in view the limitation period;
7.2. file the appeals/other petitions/applications as required, within limitation and communicate
the particulars (Diary number, ITA number etc.) to the PCIT/CIT concerned;
7.3. communicate defects/office objections, if any, in the appeals etc and take prompt steps to
rectify the same with the assistance of the PCIT/CIT;
7.4. appear on behalf of the department in the High Court/ other judicial forums, as required in
the cases assigned to him;
7.5. keep the PCIT/CIT informed of the important developments in the case particularly with
regard to dates of hearing, conclusion of hearing, date of judgment/order etc.;
7.6. when any case attended to by him is decided against the Department, apply for certified
copy of the judgment within two working days of pronouncement and give his opinion regarding

144
 HAND BOOK ON JUDICIAL MATTERS

the advisability of filing an appeal/SLP against such a decision within three days of taking delivery,
He shall send an ordinary copy of the same, as soon as available, to the PCIT/CIT concerned, In
other cases also the same time limits shall be applicable, though opinion will not be required;
7.7, if required, render all assistance to the law officers, Advocate General of the State
Government, special or Senior Counsel, who may be engaged in a particular case before the
Supreme Court, High Courts, ITAT, etc;
7.8. give legal advice to the Department on such civil, criminal and revenue matters pertaining
to direct taxes and such matters arising in the course of administration of the Department as are
referred to him by the Department including:
a. examination and settling of drafts of legal nature;
b. examination of trust deeds and draft rules of provident funds for recognition,
and
c. drafting of applications, petitions etc. to be filed in Courts of law and other
statutory bodies;

7.9. send the case file and related papers to the PCIT/CIT concerned after the judgement/order
in the case is passed but before submission of the final bill for professional services.
7.10. perform such other duties of legal nature, which may be assigned to him by the Department.
7.11. A monthly report shall be submitted by the Counsels as prescribed in the Proforma E.

B. Specific duties of Jr. Standing Counsel and related matters

7.12. The duties of Jr. Standing Counsel specifically include rendering meaningful assistance
to St.
Standing Counsel in
a) Drafting memo of appeal and consulting assessment records etc., if required.
b) Removal of defects / office objections in the cases filed by the department.
c) Research for preparation of cases for representation.
d) Assist the Sr. Counsel in preparation and submission of the Monthly report.

C. Non- compliance/ non- adherence to the duties and responsibilities by the Standing
Counsels

The CCIT may take appropriate action against the erring counsels in case of non-compliance
and non-adherence by the Counsels.

8. Assistance to Standing Counsels by the Department

The CCIT has to ensure that the Judgment Database of the NJRS is made available to all
Standing Counsels. The jurisdictional PCsIT/PDsIT/CsIT/DsIT shall provide all assistance to the
Standing counsels such as providing briefs, assessment records, etc. in preparation of a case. In
particular, copy of appeal scrutiny report in respect of the impugned order of the ITAT and copy
145
of paper book filed by the assessee before ITA T shall be provided to the counsel for assistance in
drafting memo of appeal and preparation of case for representation. The PCsIT/CsIT/PDsIT/DsIT
shall •respond to communication from the standing counsels promptly and have regular interaction
with them in order to keep a close watch on progress of the cases in the Court. The PCsIT/CsIT/
PDsIT/ DsIT shall, while reviewing the quarterly performance of Counsels, look into the issues, if
any, raised by the counsels and ensure their appropriate resolution,

9. Right to private practice

9.1 The Counsel will have the right of private practice, which should not, however, interfere
with the efficient discharge of his duties as counsel of the Department but he shall not advise, hold
briefs or appear against the Department before any authority, ITAT or Court in matters under the
statutes relating to direct taxes,

9.2 If the Counsel happens to be a partner of a firm of lawyers of solicitors, it will be incumbent
upon the firm not to take up any case against the Department in the High Court concerned or before
any authority/ITAT falling within the jurisdiction of the said High Court or any case against the
department in other courts arising out of the matters falling within the jurisdiction of the said High
Court.

Note: CCIT referred to in this annexure will mean Chief Commissioner of Income Tax in
charge of Judicial work in the Pr. CCIT region.

Proforma “A” of Annexure I

Particulars to be furnished by an advocate applying for engagement as Jr./Sr. Standing Counsel

1. Name of the person

2. Permanent Account Number
3. Father’s Name
4. Date of Birth
5. Address for correspondence including e-mail, Telephone/Mobile no.
6. Permanent address
7. Educational Qualification *
8. Category of counsel for which applied (Jr. Standing Counsel/Sr. Standing Counsel)
9. Date of enrolment as an advocate in the State Bar Council and Registration No.
10. Jif a partner in a firm, name(s) of the firm(s) and other partners
11. Number of cases relating to Direct Taxes dealt with during last 3/5 (Jr./Sr.) years as an
Advocate
12. Number of cases published in Journals/Newspapers, etc.
13. 1ucome from Professional Practice (copy of the latest I.T. return to be attached)

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 HAND BOOK ON JUDICIAL MATTERS

Verification
I……………………….S/o…………….., do hereby declare that whatever has been stated in the
above application is true to the best of my knowledge and belief.
Signature

Date:
Place.
Applicant to submit documentary proof with respect to aforesaid items/information.

Undertaking

I……………………….S/o…………….., do hereby deciare that if engaged by the department,

shall fully abide by the terms and conditions of the engagement.

Signature

Date:
Place:

Proforma ‘A2 of Annexure I

Pro forma for application by an officer who has retired/resigned from the Income-tax Department
or has been a member of ITAT

1. Name of the person

2. Permanent Account Number

3. Father’s Name

4. Date of Birth

5. Address for correspondence including e-mail, Telephone/Mobile no.

6. Permanent address

7. Educational Qualification*

8. Date of joining Government Service in Income-tax Department

9. Designation and office address of the last post held

10. Date of retirement/resignation from the

11. Date of enrolment as an advocate in the State Bar Council and Registration

12. If a partner in a firm, name(s) of the firm(s) and other partners

13. Category of counsel for which applied (Jr: Standing Counsel/Sr. Standing Counsel)

147
 Verification

I……………………….S/o… , do hereby declare that whatever has been stated in the above
application is true to the best of my knowledge and belief. I further declare that I have not been
removed from the service due to any disciplinary proceeding and no disciplinary proceedings
under service rules or Pension Rules -are pending against me as on date,

Signature
Dated:
Place:

*Applicant to submit documentary proof with respect to aforesaid items/information.

Undertaking I……………………….S/o…………….., do hereby declare that if engaged by the

department, I shall fully abide by the terms and conditions of the engagement.

Signature
Date;
Place:

forma-’B’ Annexure I

Particulars/evaluation report of a person applying for engagement as Jr./Sr. Standing Counsel

1. Name

2. Category (Junior/Senior)

3. Date of enrolment as an advocate in the State Bar Council and Registration No.

4. Number of cases relating to Direct Taxes dealt with during last 3/5 (Jr./Sr.) years as

an Advocate

5. Number of cases published in Journals/Newspapers etc.

6. Income from Professional practice

7. CCIT’s recommendations on the overall suitability based on the cases dealt by the
applicant with regard to the flair for Direct Tax emanating from the presentation
by the Counsel and other factors.

Chief Commissioner of Income-tax

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 HAND BOOK ON JUDICIAL MATTERS

Proforma-’B-1’of Annexure 1
For those applying for Sr Standing counsel
Name Qualification Whether Whether Knowledge Interpretational Flair for If a Jr./Sr. Total Marks
of the & Division practiced IT articles etc. of Tax ability/ Advocacy Counsel, obtained
candi- obtained at matter for pub- lished Laws Advocacy (overall) marks (Max. 100
date the degree the requisite in any Law (Max. 20 skill’s (Max. 25 for past Marks)
level period journal, Marks) pertaining to Marks) performance
LLM- 2 mark (Yes is Books Direct T axes and co-
M. Phil/Ph. mandatory published (Max. 20 ordination
D.- as minimum etc. Marks) with the field
3 marks eligibility) Max. 10 etc. (Max,
Academic However, Marks Marks in
record (marks additional scale of O
scored in marks for -10)
LLB): experience:
>70%- 7 No. of years:
marks >15 years- 5
>60%- 6 marks
marks 11-15 years
>50%- 5 - 4 marks
marks 5-10 years-
>40%- 2 3 marks
marks

Proforma-’B-2’of Annexure I
For those applying for Jr Standing counsel
Name Qualification Whether Whether Knowledge Interpretational Flair for If a Jr./Sr. Total
of & practiced articles of ability/ Advocacy Counsel, Marks
candi- Division IT matter etc. Tax Laws Advocacy skills (Max. marks for obtained
date obtained at the the requisite published in (Max. 20 (Max. 20 25 past out- (Max.
degree level period any Law Marks) Marks) Marks) put 100
LLM- 2 mark No of years journal, (Max, Marks)
M. Phil/Ph. > 10 published Marks in
D.- 3 years-5 etc. scale of
marks marks Max. 10 10)
Academic 5-10 years Marks
record - 4 marks
(marks <5 years- 3
scored in marks
LLB):
>70%- 7
marks
>60%- 6
marks
>50%- 5
marks
>40%- 2
marks

149
Overall Remarks for the quarter based on above:

Commissioner of Income tax

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 HAND BOOK ON JUDICIAL MATTERS

Proforma- ‘D’ of Annexure I

Annual performance report of the counsel for the Fin. Yr.

1. Name of the Region/Charge

2. Name of the Counsel

3. Category (Sr./Jr.)

4. Date of birth

5. Date of 1st engagement

6. Date of expiry of tenure

7. Ref. No, of CBDT’s sanction letter vide which last renewal was
granted.
8. Number of cases handled during the period under report Appeals Writs

9. Number of cases decided by the High Court (å) in favour of the Depart-
ment (b) against the Department

10. Number of cases handled before the IT AT/other Courts

11 Number of cases out of those in col. 10 above: decided in favour

of the Department against the Department

12. Whether prompt in applying for certified copy and furnishing the same
to the department

13. Quality of written opinion

14. Does the counsel take keen interest in his work and is generally alert and
responsive to the Department’s interest in litigation entrusted to him?
Comments should also be made on the quality of drafting/opin- ion etc.
Specific comments should be given about his promptness in, (a) In-
forming the department from time-to-time regarding hearing of cases,
supply of copies of judgments etc. (b) Taking steps for vaca- tion of stay

15. General assessment on overall performance

Chief Commissioner of Income-tax

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 Proforma –E of Annexure I
Monthly report to be submitted by the Counsel to CIT (J)/AddI. CIT (J) for the month
of………….
Name of the Counsel:

Sl.no Name of the Case CIT Charge/AO Status of the case Remarks
and Appeal No
concerned

Comments- if any.„,

Date/Place
(Signature)

Copy to:

CIT (concerned)

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 HAND BOOK ON JUDICIAL MATTERS

Annexure-II
SCHEDULE OF FEES AND ALLOWANCES AND TERMS OF
PAYMENT
The fees and allowances payable to Senior Standing Counsels are given hereunder:
1. For appearance in the High Court (subject to exceptions in para 9 & 10 below)

l.1. In respect of appeal under section 260A of the Income-tax Act or Civil
or Criminal Writ Petition under Articles 226 and 227 of the Constitution or
Civ- il or Criminal appeals or revision petition, for first substantial and
effective hearing at admission stage
Rs. 3,000
1.2. In respect of each subsequent substantial and effective hearing up to
admission stage Rs. 1,500

1.3. In respect of appeal admitted under section 260A of the Income-tax

Act or reference including application under section 256(2) of the Income-
tax Act or Civil or Criminal Writ Petition under Articles 226 and 227 of
the Consti- tution, on first substantial and effective hearing following the Rs. 6,600
completion of pleadings.
Rs- 2,400
1.4. In respect of each substantial and effective hearing, following the first
hearing
1.4.1. In respect non- effective hearing (subject to Para 11 .3 below)
Rs 500 subject
to maximum of
3 hearings
In respect of obtaining certificate of fitness under section 261 of the Act, Rs. 3000 (each
including drafting and typing of the petition application)
1.6. In respect of Civil Miscellaneous application, including drafting and Rs. 2400 (per
typing (other than those filed with the appeal memo) case)
2. For Drafting
2, l. For drafting of each appeal memo/writ petition/ counter affidavit or any Rs. 6,600 per
other pleading of similar nature involving original work (including drafting appeal/writ
of condonation petition/ notice of motion etc,)
2.2. For drafting each rejoinder/ written submission/any other pleading in Rs- 3,600
answer in case of identical affidavits, written statements, etc., -in connected
cases, one drafting fee will be payable in the main case and 1/6tb of the
drafting fee will be payable in each of the connected case
2.3. Written opinion: RS. 3600/ (per
case)
Other than what is referred in Para 7.6 of Annexure I)

3. For Conference

Conference fees (with Assessing officer or above) 1200/- per conference

not exceeding Rs.
3,600 per case

153
 A substantial and effective hearing is one in which either one or both the parties. involved in a
case are heard by the Court. {if the case is mentioned and adjourned or only directions are given
or only judgment is delivered by the Court, it would not constitute a substantial and effective
hearing.
The Junior Standing Counsel rendering assistance to the Sr. Standing Counsel shall be entitled
to 1/3rd of the amount specified against each item of works The Junior Standing Counsels
performing the functions of Senior Standing Counsels or arguing cases independently as per the
orders of CCIT shall be entitled to the full amount specified above against each item of work.

4. Retainership

The Standing counsel shall be entitled to a retainer fee at the following rates:

Senior Standing Counsels Rs. 20,000 p.m. (for Delhi and Mumbai)
Rs. 15,000 p.m. (for other stations)
Junior Standing Counsels Rs. 10,000 p.m. (for Delhi and Mumbai) Rs.
7,500 p.m. (for other stations)

No separate establishment charges including telephone, etc, shall be payable.

5. Clerkage

Clerkage at the rate of 10 per cent of the appearance fee and drafting fees shall be payable to the
counsel, subject to a maximum of Rs. 8,000/-. in a case or a batch of cases

6. Out of pocket expense

The amount required for Court fees at the time of filing a case and other miscellaneous expenses
including expenses for obtaining certified copies of judgement/order should be paid to the Counsel
in advance by the Chief Commissioner. An account of the expenses incurred shall be rendered by
the counsel to the Chief Commissioner while presenting the final bill.

7. For appearance before any other Court, ITAT, other statutory bodies, etc:
The Standing Counsel shall be entitled for fee etc. as under

a. At headquarters (the seat of High Court for which the counsel is engaged): Same as payable
for appearance before the High Court.

b. Out of headquarters: When the Counsel is required to go out of headquarters in connection

with any litigation matter, e.g., for conference with a Senior Counsel, Special Counsel or with the
Law Officer or for appearance in any Court/ITAT/Statutory Body, etc., outside the headquarters,
he will be entitled to a daily fee of Rs. 5, 100/- per day for the days of his absence from the
headquarters including the days of departure from, intervening holidays and arrival back at the
headquarters. However, no fee will be paid for the day of departure if he leaves headquarters after
Court hours and for the date or arrival if he arrives at the headquarters before the Court hours. The
daily fee will be in addition to the normal appearance fee prescribed at para 1 supra.

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 HAND BOOK ON JUDICIAL MATTERS

c. Travel/Hotel expenses: in addition to the daily fee, the Counsel will be entitled to travel
expenses for travel by air (economy class) or first class AC by train. Road mileage for the journey
from his headquarters to the Airport/railway station and vice versa and from the airport/railway
station to the place of his stay out of headquarters and vice versa will be paid at the rates admissible
to Class I officers of the Central Government having grade pay of Rs. 10,000/- in case of Sr.
Standing Counsels and Glade pay of Rs. 8,700/- in case of Jr. Standing Counsels. He will also be
paid a lump sum amount of Rs. 900/- as conveyance charges for performing local journey while
outside the headquarters, He will also be entitled to actual expenses for stay in hotel, subject to a
maximum for Rs. 5,000/- per day for Sr. Standing Counsels and Rs. 3,000/- per day for Jr. Standing
Counsels.

8. Appearance fee in special circumstance

The CCIT may entrust specific duties relating to the Departmental work in the High Court
for attending to duties which are not specifically covered in this instruction (such duties to be
specified) to any Standing Counsel on the panel. The fees for such specified work, however shall
not exceed Rs. 2,000/- per day.

9. Appearance fee in connected/covered cases

9.1. When more than one case involving identical questions/issues are heard together and
decided by the High Court, the counsel shall be paid full appearance fee in the main case and Rs.
1,000/- in each of the other connected cases.

9.2. Similarly, in covered eases (where the judgement in the relevant case is squarely based
upon earlier decision of the same High Court or of the Supreme Court) the counsel shall be paid
only Rs. 1,000/- per case as the appearance fee. However, in case the counsel has argued the
relevant case to the effect that the case was not a covered one and such arguments duly find a
mention in the judgement, the case will not be considered a covered one and the counsel shall be
entitled for full appearance fee.

10. Uncontested matters

A case shall be regarded as uncontested if the same is withdrawn by the plaintiff/appellant or

dismissed in limine or otherwise decided by the court exparte. In uncontested cases, the fee shall
be 1/3rd of the appearance fees as applicable to the stage of the case, otherwise payables but if such
a case is later on restored and decided in contest, the remaining 2/3rd of the fee will be payable.

11. General
11.1. The rates specified above are primarily applicable to income-tax cases but will apply,
mutatis mutandis, to cases relating to other direct taxes and any other matters assigned by the
department. In all cases effective appearance is necessary for the Counsel to claim fee,

11.2. No fee will be payable in cases where no legal work is required to be done. For examples
cases in which the interest of the department is to be watched pending instructions, the cases
involving transmission of records to the Supreme Court inspection of the Court record for
ascertaining the position of the case or other information needed etc.

11.3. No fees for adjournment - No fee will be payable to the Counsel if an advance notice

155
about the adjournment has been circulated or the case has been adjourned at his request due to the
reasons personal to him.

11.4. If the Counsel appears at the instance of the Union of India or for parties other than the
Union or India whose scales of fee are not inconsistent with that of the Union of India, he will be
entitled to only one set of fees.

11.5. When the Counsel does not argue the case himself but assists the Law Officer or any other
special Counsel, he will be entitled to the same fee as is payable to him as if the case has been
argued by him.

11.6. When cases argued before a Single Judge are referred to a Division Bench or to a Full
Bench, separate fee at the rates prescribed at Para I of this Annexure will be paid for appearance
before each Bench.

11.7. Late submission of certified copies of the judgment

11.7.1 20% of the appearance fees would be deducted if the application for certified
copy is not made within two working days, excluding the date of pronouncement of the
judgement.

11.7.2 Further, 20% of the appearance fees shall be deducted if certified copy of the
judgement is not handed over to the jurisdictional Commissioner/Director of Income-tax
within three working days of the judgement being ready for delivery. In case where the
jurisdictional Commissioner/Director of Income-tax is stationed at a different city/town
from the one where the High Court bench is located, the time limit for delivery of certified
copy of judgment would be, five working days of the judgment being ready for delivery.

Provided clause 11.7.2 shall not be enforced if the counsel intimates the Commissioner/
Director concerned or the officer nominated by him, of the conclusion of hearing giving
particulars of appeal and makes available to him an ordinary copy of the judgement as soon
as the same is available (but before the date of judgement being ready for delivery) along
with the copy of receipt of making application for certified copy within period stipulated at
11.7.1 above.

12. Procedure for submission and payment of bills to Standing Counsels

12.1. The Counsel should submit professional bills in pro forma ‘X’ of this annexure by the
10th of every Month:

12.1.1. Bills for drafting should be submitted in the month succeeding the month in
which the appeal etc. was filed,

12.1.2 Bills for appearance for admission and regular hearings as referred in Para I of
annexure Il should be submitted in the month succeeding the month in which relevant
orders/judgements are received.

12.2. Bill claiming retainer fee as referred in Para 4 of annexure Il should be submitted in the

156
 HAND BOOK ON JUDICIAL MATTERS

month succeeding the month of retainership.

12.3. Wherever Jr. Standing Counsel has assisted a Sr. Standing Counsel, a combined bill should
be submitted by the Counsels.

12.4. The bills shall be scrutinized within 30 days of receipt and deficiency or excess claim if
any shall be communicated to the counsel within a week of such scrutiny. The scrutiny of bills
should not be kept pending due to non-availability of funds,

12.5. After passage, the Bill should be arranged in seriatim of receipt, for payment.

12.6. The cheque should be sent to the counsel concerned giving particulars of bills covered by
the payment,

12.7. In order to resolve any issues pertaining to bills, the PCsIT/CslT should have periodical,
preferably quarterly meetings with the counsels

Proforma-’X’ of Annexure - II
Bill for claim of professional fees by Standing Counsels (casewise) to be
submitted to the PCIT/CIT concerned/CIT (J)
PRE-RECEIPTED

Name of the Counsels Senior Junior

1 CIT Charge
2 Case Title
3 Asst. Yr. Involved
4 ITA No./WT No. etc.

in case Counsel has assisted the Senior Counsel in z case, both the names should be mentioned and
combined bill to be submitted

PART A (Bill for Drafting), as applicable

(Amount in Rs.)

Senior Junior

1 Appeal memo u/s 260A

2 Writ petition

3 Counter affidavit or any other pleading of similar nature

involving original work

4 Rejoinder/written submission or any other pleading in answer

5 Written opinion
Total

157
 PART B (Bill for appearance etc.), as applicable
(Amount in Rs.)

Senior Junior
1 Admission stage (Whether Connected or Covered case- Yes / No
2 First substantial and effective hearing after admission (Whether Connected or
Covered case- Yes / No)
3 Subsequent substantial and effective hearing (Whether Connected or Covered
case- Yes / No
4 Certificate of fitness (Para of annexure II)
5 Civil Miscellaneous application (Para 1.5 of annexure II)
6 Date of Judgement
7 Date of making application for certified copies
8 Deduct 20% of (1)+(2)+(3) if date at (7) is more than 2 days from (6), excluding (-) (-)
the date of judgement
9 Date of judgement ready for deliver
10 Date of furnishing ordinary copy to the CIT concerned/CIT Judicial (if
applicable)
11 Date of furnishing certified copy to the CIT concerned/CIT Judicial
12 Deduct 20% of (1)+(2)+(3) if date at (11) is more than 3 (5 for outstation) days from (-) (-)
(9), excluding the date or order ready for delivery. (Not applicable if the counsel
intimates the CIT/DIT concerned of the conclusion of hearing giving particulars
of appeal and makes available to him an ordinary copy of the judgement as soon as
the same is available (but before the date of certified copy being ready for delivery)
along with the copy of receipt of making application for certified copy within
period stipulated at Para 11.7.1 of annexure II.
13 Conference fees
14 Clerkage
15 Out of pocket expenses
16 For appearance at any other Court(ITAT/Statutory bodies
(as per Para 7 of annexure Il)
17 Appearance fee in special circumstances (as per Para 8 of annexure I.I
Total
Certified that the above information is correct and in accordance with the terms of engagement.
The above claims have not been made earlier,

Revenue
Stamp

Received Payment
Signature and Name
Signature and Name of Jr. Standing Counsel
of Sr. Standing Counsel Mobile/Tel. No.
Mobile/Te1. No.

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 HAND BOOK ON JUDICIAL MATTERS

For office use only

Deduction as applicable Senior Junior

1 Connected/Covered cases (as per Para 9

2 Uncontested cases (as per Para 10

3 Late submission of certified copies

3a As per Para 11.7,1 of Annexure II

3b As per Para 113.2 of Annexure II

4 Others (specify`)

5 Total deduction

Total Bill

Senior St. Counsel Junior St. Counsel

Part A

Total Amount claimed

Deductions, if any (for office use)

Amount assed for payment ( for office use)

The counsel shall be intimated of the deductions made before payment of the bill.

Signature and Name of the D.D.O.

159
ANNEXURE B4 : CBDT LETTER NO. F. NO. 278/M-23/2021-ITJ
DATED 9TH JUNE, 2021 - for engagement of Additional Solicitor
General(ASG).
F.No.278/M-23/2021-ITJ
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Direct Taxes
ITJ Section
Room No.12, 5th Floor,
Jeevan Vihar Building,
Parliament Street, New Delhi
Dated the 9th June, 2021

To,
All Principal Chief Commissioners of Income Tax,
Sub: - Engagement of Additional Solicitor General (ASG) to defend matters on behalf of
CBDT/Department - Clarification - reg.

Madam/Sir,

1. The CBDT has been receiving proposals for the engagement of ASG as Special Counsel
for representing the Department in important cases before various High Courts as per
Instruction No. 3/2008. In view of the notification dated 01.10.2015 of Ministry of
Law & Justice (Department of Legal Affairs), it is clarified that the proposals for the
engagement of ASG to defend matters on behalf of CBDT/Department in a Court
within her or his jurisdiction on normal terms and conditions as specified in Ministry
of Law & Justice’s Notification dated 01.10.2015 (copy enclosed) are not required to
be sent to the Board for approval.
2. The concerned Pr. CCIT/CCIT may appoint ASG directly under intimation to the
Board provided that she/he is satisfied that the following conditions are met:

a. Important/complex question(s) of substantial law having wide ramification(s) is/

are involved, or
b. any statutory provision is under challenge.

3. This issues with the approval of Member (A&J), CBDT.

Yours faithfully,
Encl: as above.

(Smriti Bharadwaj)
Joint Commissioner of Income Tax (OSD), CBDT

Copy to: Data Base Cell with a request to upload on “https://www.irsofficersonline.gov.in”.

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 HAND BOOK ON JUDICIAL MATTERS

ANNEXURE B5: THE CBDT LETTER NO. F. NO. 278/MISC/M-23/2021-ITJ

DATED 18TH AUGUST, 2021 - Revised Guidelines – Appointment of Special Counsels
to represent Income Tax Department before Courts and Tribunals

F. No.278/M-23/2021-lTJ
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(Audit & JudiciaI Division)

Dated the 18 August, 2021

To
The Principal Chief Commissioners of Income-Tax,
The Principal Directors General of Income Tax and
The Directors General of Income Tax (Investigation)

Respected Madam/Sir,

Subject:- Appointment of Special Counsels to represent Income Tax Department before Courts
and Tribunals; Revised Guidelines.

1. In order to streamline the procedure for engagement of Special Counsels and to bring
about uniformity in the proposals being submitted to the Central Board of Direct
Taxes; in supersession of the Instruction No. 3/2008 dated 25.03.2008 and letters and
clarifications issued on the subject, the revised guidelines are as under:-

2. As the Standing Counsels are empanelled through a rigorous selection process involving
the levels of the Pr. Chief Commissioner of Income-tax, Central Board of Direct Taxes,
Minister of State (Finance) and concurrence of Ministry of Law & Justice, as far as
possible Standing Counsels should be engaged to represent the cases before Courts
and Tribunals. Request should be made for appointment of Special Counsels only in
exceptional circumstances.

3. The proposal should be submitted along with duly filled in Proforma-A and Proforma-B
of these guidelines.

4. The PCCIT/CCIT/DGIT/PCIT/PDIT/CIT/DIT recommending the proposal should

ensure that the Counsel being recommended for engagement as Special Counsel has
exceptional expertise and experience in handling the nature of the issues in dispute.

5. The Proposal must necessarily be sent only with the approval of the Pr. CCIT of the
region.

161
 6. The proposal must be sent well in advance, giving adequate time for processing the
same, as the proposal for appointment of a Special Counsel is to be approved by the
Minister of State (Finance) with concurrence of the Ministry of Law & Justice.

7. No case should be assigned to any Counsel other than a Standing Counsel. The cases
may be assigned to the Special Counsel only after the sanction order of appointment is
issued by the Judicial Section of Central Board of Direct Taxes.

8. These guidelines are being issued with the approval of the Central Board of Direct
Taxes: Chairman & All the Members.

9. These guidelines may kindly be brought to the knowledge of all the officers in your
region.

With regards,

Yours sincerely,

(ANKUR GOYAL)
Under Secretary to Government of India
Room No. 12, Jeevan Vihar Building,
Sansad Marg, New Delhi - 110001
Enclosed: Proforma-A & B

Copy to:

a. PS to MoS(F)/PS to Revenue Secretary

b. The Chairman, and Members, CBDT
c. JCIT, Data Base Cell for uploading on irsofficersonline.gov.in
d. Guard File

F. No.278/M-23/2021-lTJ

162
 HAND BOOK ON JUDICIAL MATTERS

PROFORMA - A

FOR ENGAGEMENT OF SPECIAL COUNSEL

1 Name of case

2. PAN
3. Assessment year(s)
4. Appeal No./Case No./WP No.
5. Appeal/Writ/SLP by Department (D) or Assessee (A)
6. Court/Tribunal where matter is to be contested

7. Issue(s) involved in brief, (Separate annexure may be attached, as deemed fit)

Reason(s) as to why a Special Counsel is required to be appointed

8. List of current Standing Counsels or Special Public Prosecutor (SPP)
empanelled by the Department
Reason for not appointing Standing Counsel/SPP from the empanelled list

Name and address of the Special Counsel

(ii) Written consent of the Special Counsel and her/his availability to represent Yes/No
the Department’s case (Consent letter to be enclosed)

(iii) Fee of engagement of the Special Counsel for:

(a)Appearance
(b)Conference
(c)Opinion
(d) Vetting of written submissions
(e) Others, if any

(iv) Bio-data highlighting the professional excellence of the Counsel enclosed Yes/No
(v) Performance of Counsel as Special Counsel for the Department in last 3 Yes/No
Financial Years in Proforma-B enclosed

10. Next scheduled date of hearing before the Court/Tribunal

11 Any other information

Name and Signature of CCIT/DGIT/PCIT/PDIT/CIT/DIT

(Recommending Officer) Date:

Name and Signature of Pr. CCIT, ........ Date:

163
 F. No.278/M-23/2021-lTJ

PROFORMA-B
PERFORMANCE OF THE COUNSEL AS SPECIAL COUNSEL ON BEHALF OF
THE DEPARTMENT IN LAST THREE FINANCIAL YEARS

Number of Percentage of
Number of Number of
Cases Success
Cases decided Cases decided Number of
S.No/ F.Y. Assigned/ (Favour-100%,
in favour of against Cases setaside
No. of cases against-O%,
Revenue Revenue
decided Set-aside-50%

A B C D E F

1.

2.

3.

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 HAND BOOK ON JUDICIAL MATTERS

ANNEXURE B6: CONTACT LIST OF COUNSELS Allocated Pr. CCIT,

Mumbai Region as dated 01.11.2023.

Contact List of Counsels as on 01.11.2023

Sr. No. Junior Standing Counsels Mobile No.

Ms. Shilpa Goel

8452097640
A-63, Mamta Apartments, Appasaheb Marathe Marg,
1 [email protected]
Prabhadevi, Mumbai-400025

Ms. Sneha Prabhu

9819025885
B-1602, Sukhada Building, Sir Pochkhanawala Road,
2 [email protected]
Worli Sea Face, Mumbai-400018

Shri Vipul Arun Bajpayee

9967345924
Off.-09,1st Floor Om Kripa Apt,
3 [email protected]
New Station Road Kalyan (West) 421301

Ms. Sangeeta Yadav

60-D, 4th Floor, Bhupen Chamber, Dalal Street, Fort, 9699663810 sy1276711@gmail.
4
Mumbai-400001 com

Ms. Mohinee Prakash Chougule

8452027029
Off. No.3, Doshi Building Com-pound, Sunderbaugh
5 mohineecho u- gule1989@gma
Lane, Kurla (W), Mumbai- 400070
il.com

Ms. Samiksha Kanani

KK Chamber, Ground Floor, Sir PT Marg, Behind 9833003057 samik-shashah86@
6
ICICI Bank, Off D N Road, Fort, Mumbai-400001 gmail.com samikshakanani@
gmail.com

Ms. Swapna Gokhale

Office- CAT Bar Association, 3rd Floor, Prescott Road, 9220793799
7 Fort, Mumbai-400001. advswapnago-khale@ gmail.co
Resi—202, Rama-Laxmi CHS, Off. Gokhale Road, m
Mulund (East), Mumbai 400 081.

Ms. Anuradha A. Mane 9323802255

Building no. 125, Shree Dattakrupa CHS, B/603, Nehru adv.anuradha.mane@ gmail.
8
Nagar, near Ganesh Hall, Kurla West, Mumbai -400024 com

165
9 Shri Siddharth S. Chandrashekhar 9820415067
1st floor, ‘A’ Block, Amarchand Mansion, Madame [email protected]
Cama Road, Mumbai-400001

10 Shri Pritish Chatterjee 8600867702 adv.pritishchatter-

Sea Glimpse Apartment, 1st Floor, Petro’s jee@gmail.
Guest House, Colaba, Mumbai-400001 com

11 Shri Ruju R. Thakker 9699055550

79, Chamber No. 9, N M Road, advrujuthak-ker@ gmail.com
Fort, Mumbai-400001

12 Ms. Maya Majumdar 9022228611 9433175030 maya.

Jeevan Vihar Building, Room No. 4, Ground Floor, 75, [email protected]
Mumbai Samachar Marg, Fort, Mumbai-400001

13 Shri Mahesh Vinod Rajpopat 9870918709

Office No.1, Neelkunj, Near Asha Hospital, Daftary maheshrajpopat18@ gmail.co m
Road, Malad(East), Mumbai-400097

14 Jay Kamal Vora 9920988484

A-802, Vrindavan, Rambaug lane, off SV Road,
advocatejayvora@ gmail.com
Borivali West, Mumbai-400092

15 Eshaan Saroop 8128231269

Bungalow No. 6(Ground Floor), Customs Quarters, [email protected]
Adenwala Road, Five Gardens, Matunga East,
Mumbai-400019
16 Dhananjay Balkrishna Deshmukh 9869182800
5, Apeejay House, Ground Floor, 130, Mumbai [email protected]
Samachar Marg, Fort, Mumbai-400023

17 Amar Shyamprasad Mishra 306, Vardhman Chambers, 9821029453

17-G, Cawasji Patel Street, Fort, Mumbai-400001 9702277799
[email protected]

18 Netturi Chinna Ranganayakulu 9820177317

77, Nagindas Master Road, Prakash Chamber, TVS-3, [email protected]
2nd Floor, Fort, Mumbai-400023

19 Hussain Ishak Dholkawala 8097224512

Lentin Chambers, Cabin No. 10, Gr. Floor, [email protected]
Casablanca Trade Place Pvt. Ltd. Shop No. 4, Next
to BSE, Kala Ghoda, Fort, Mumbai-400001

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 HAND BOOK ON JUDICIAL MATTERS

20 Mayank Joshi 9867307983

Office No. 207, Arjun Centre, BS Devashi Marg, [email protected]
Govandi Stn. Road, Govandi East, Mumbai-400088

21 Prathmesh Prakash Bhosle 9619998386

C/o. MNSQ Legal, 4th floor, Building No. 5, [email protected]
Rajabahadur Compound, Fort, Mumbai-400001

22 Dhanalakshmi Sankaranarayanan Krish-naiyer 1407, 9833185363

Garden View CHS, Royal Palms Estate, Goregaon East, [email protected]
Mumbai-400065
23 Mr. Deval K. Anja 9930393335
701/C, Vrindavan, Vrajbhoomi Complex, Link road, [email protected]
Kandivali West, Mumbai-400067

24 Devendra Babulal Harnesha 8767608001

123, C Shanti Bhavan, 2nd floor, Office No. 11, 7977109511
V.P. Road, Girgaon, Mumbai-400004 [email protected]

Sr. No. Senior Standing Counsel Mobile No.

1 Shri P.C. Chhotaray Tel. Nos. 28577549 (R/O) &

B/903, Gundecha Hills, Near S.M. Shetty School, 9869407549(M) pcchhotaray@ya-
Chandivali Road, Powai, Mumbai- 400 072 hoo.in

2 Shri Suresh Kumar Tel. Nos. 22984902 (O) &

Modi House, 4th floor, Bora Masjid Street, Near Old 9323972436 (M) skthakur2@ya-
Handloom House, Fort, Mumbai- 400 001. hoo.com

3 Shri Akhileshwar Sharma Tel No. 22837216,

Office: 1) 4/25, Kamal Mansion, 1st Floor, V.S. H. 22850284 (O) 26846077
Complex, Arthur Bunder Road, Near Radio Club, (Resi.)
Colaba, Mumbai-400005. 9619444162 akhil2406@gmail.
2) Unit No. 48, 1st Floor, Grand Building Annexe, com
Strand Road, Colaba, Mumbai 400005.

4 Shri Nirmal Chandra Mohanty 9004685340 mohantynirmal@ya-

Flat No. 907/B, Adityavardhan Bldg, 186-B, Saki Vihar hoo.co.i n
Road, Andheri East, Mumbai-400 072

5 Ms. Sushma Nagaraj 9886834499

218, DBS Business Center, 213, Raheja Chambers, [email protected]
2nd Floor, Free Press Journal Road, Nariman
Point, Mumbai-400021

167
6 Shri Manoj Laxman Shirsat 9769847670
Address 1:- Room No.7, First Floor, Western [email protected]
India House, Sir P.M. Road, Fort, Mumbai-
400001
Address 2:- 501, Hamam House, 36,
Hamam Street (Ambalal Dhoshi Marg), Fort,
Mumbai-400023

7 Shri Subir Kumar 9769441090

No. 155,1 5th floor, Maker Chamber- III, [email protected]
Nariman Point, Mumbai- 400021

8 Shri Devvert Singh 9930999409

22/43, Raja Bahadur Compound, Tamarind [email protected]
Lane, Above Garden Jolly Restaurant, Fort,
Mumbai-400001

9 Shri Yogeshwar S. Bhate 9920473770 9869073770

Om Dnyanesh C.H.S. Ltd., Flat no.-5, [email protected]
Ground Floor, S. G. Barve Marg, Kurla(W),
Mumbai-400070

10 Arjun Gupta 9820070060

107, Jolly Bhavan No. 1, 10, New marine [email protected]
Lines,Mumbai-400020

11 Ms. Prachi Navneet Wazalwar 9930112354

308, Jolly Bhavan No. 1, 10, New Marine Lines, [email protected]
Mumbai-400020

12 Yashodeep Pradeep Deshmukh 7738520325/8080519024

Office No. 39A, ground floor, Readymony [email protected]
Mansion,
Teekay Shopping Centre, Next to Akbarallys,
Veer Nariman Marg, fort, Mumbai-400001
13 Mr. Vikas T. Khanchandani 9967879122
A-604, Garden Estates, Off. Link Road, Laxmi [email protected] om
Nagar, Goregaon West, Mumbai-400104

15 Pranil K. Sonawane 9619646233

106, Yusuf Building, 1st floor, Opp. Zara Store, [email protected]
Hutatma Chowk, Fort, Mumbai-400001

168
 HAND BOOK ON JUDICIAL MATTERS

16 Mrs. Anamika Malhotra 9820698770

501, Dosti Florentine, Dosti Acres, wadala east, [email protected] n
Mumbai-400037

17 Mamta Ramchandra Omle 9869334968

B-37, A-402, Surbhi, RMMS, Gokuldham, [email protected]
Goregaon
East, Mumbai-400063

18 P. A. Narayanan 9820279948
C-1403, Odyessey, Bhakti Park, Wadala east, [email protected]
Mumbai-400037

19 Ravi Subash Rattesar 9324404854

Office No. 23, ground floor, Plot No. 43, [email protected]
Raja Bahadur Compound, Opp. Garden Jolly
Restaurant,
Tamarind Lane, Fort, Mumbai-400001

20 Mrs. Shehnaz (Sheroo) Vispy Bharucha Nee 9821332584 /9820225748

Sheroo P [email protected]
Daruwalla
Jewellers Apartments, Flat No. 1, 56 pedder road,
Mez floor, Mumbai-400026

21 Dinesh Ramesh Gulabani 9823056635 /9765007976

Office No. 5A/B, 2nd floor, Kamanwalla [email protected]
Chambers PM road, Near Horniman Circle, fort,
Mumbai- 400001

22 Jasbir Singh Saluja 9819466208

1, Krishna Niwas, ground floor, bhawani Shankar [email protected]
road, dadar west, Mumbai-400028

169
ANNEXURE B7 : [F. No. 272/ M-26/2015(ITJ)] DATED 07.12.2018 -Non-
removal/ delay in removal of defects of pending appeals before Hon’ble High
Courts
URGENT
F. No. 272/ M-26/2015(ITJ)
Government of India
Ministry of Finance
Department of Revenue
Central Board Direct Taxes
Audit & Judicial Division

New Delhi, 7th December, 2018 To

All Principal Chief Commissioners of Income Tax,

Madam/ Sir,

Sub: Non-removal/ delay in removal of defects of pending appeals before Hon’ble High
Courts — reg.

Kindly refer to the above

2. Non-removal/ delay in removal of defects in pending appeals before the Hon’ble High
Courts is a matter of great concern for the Board, In many cases, Departmental appeals pending
before High Courts have been dismissed due to non-removal/ delay in removing of defects as
pointed out by the Registry of the High Court, The Hon’ble Supreme Court has also started
taking serious view of the delay in filing of the SLPs. In some recent case where there was
inordinate delay in removing objections at the level of High Courts, Hon’ble Supreme court
has directed that officers responsible who failed to remove the objections must be identified &
their names be disclosed in affidavits.

3. In this backdrop I am directed to inform the following:

a. PCIT/CIT is personally responsible as per Instruction No.7 of 2011 to ensure proper

filing of appeals in High Courts & consequential w up action, Proper filing of
appeals implies that defects / office objections raised by High Court’s Registry, if
any, should be promptly removed within 7 days, to ensure that the memorandum of
appeal is accepted by Court Registry & it gets numbered & listed for hearing before
the High court, Any lapse in this regard will be viewed seriously.

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 HAND BOOK ON JUDICIAL MATTERS

b. High Court Cell Shall take daily updates w, appeals filed on any day & check for
any defects/ office objections raised by the Court’s Registry. If objections are
raised, it shall procure the copy of objections from Standing counsel or the Court’s
Registry and inform the concerned PCIT/CIT in writing to address the defects/
office objections and get then removed within 7 days. High Court Cell shall keep a
follow up until the defects/ office objections are removed & matter is listed before
High Court,

c. The PCTT/CTT shall coordinate with standing counsel and shall ensure that all
defects are removed in time.

4. It may be brought to the notice of all officers in your region,

This issues with the approval of Member (A&J)

Abhishek Gautam,
DCIT (OSD), ITJ-1, CBDT
Tel 23741832

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ANNEXURE C1 : INSTRUCTION NO.7/2011[ F.No. 279/MISC/M-
42/2011-ITJ] DATED 24.05.2011.
Section 260A of the Income Tax Act, 1961 – High Court – Appeal to – Instructions regarding
standard operating procedure on filing of appeals to High Court under section 260A and related
matters.

INSTRUCTION NO 7 /2011 [F.NO. 279/MISC./M-42/2011-ITJ], DATED 24-5-2011

1. The Government has formulated the National Litigation Policy 2010, for conduct of litigation on
its behalf. The policy declares:
“Government must cease to be a compulsive litigant. The philosophy that matters should
be left to the courts for ultimate decision has to be discarded. The easy approach, ‘let the court
decide’, must be eschewed and condemned.”

2. In furtherance of the above stated policy and to achieve the ‘zero delay regime’ in matters of filing
appeals and in suppression of the existing Instructions on the subject of filing of appeals to High Court,
in general, and Instruction No. 1038 dated 3-2-1977; Instruction No. 1777 dated 4-11-1987; Instruction
No. 1957 dated 22-12-1998; Letter Dy No. 111 /Ds (J)/2004-ITJ dated 25-3-2004; Letter No.
272/77/2007- ITJ dated 24-9-2008; Letter No. 279/Misc.l42/2008-ITJ(Pt) dated 23-10-2008; Letter
No. 279/ Misc/142/2008 dated 19-11-2008 and Letter No. 279/Misc/M-29/2010-ITJ dated 31-8-2010,
in particular, the following Instructions are issued herewith for compliance by all concerned:

1. Responsibility for Filing of Appeal to High Court

Subject to the Instructions for the time being in force on the monetary limits for filing appeals issued
by CBDT under section 268A, the jurisdictional CCIT shall be the authority to decide whether to contest
an order of the ITAT, in the light of the facts and circumstances of a particular case and the statutory
provisions. He shall take a view in the matter after taking into consideration the recommendations of the
authorities below. Once the CCIT communicates his decision to contest a particular order of ITAT, it shall
be the responsibility of the CIT to ensure timely and proper filing of appeal in the High Court and
consequential follow up actions.

2. Time Lines for Filing of Appeals in the High Court under section 260A of the Act

Time lines indicating clearly the responsibilities of each level involved in the process of filing
appeal to High Court have been laid down in Annexure-I to this instruction for strict adherence
by all concerned.

3. Appeal Effect and Scrutiny Report:

i. On receipt of the order of the ITAT, the Assessing Officer (Assessing Officer) shall
ensure that appeal effect is given timely and properly. The Range Head and the CIT
shall monitor timely appeal effect in all the orders of the ITAT.

ii. With a view to provide relevant inputs to the decision making authority, a format for
scrutiny report is prescribed herewith at Annexure-II, which envisages basic record
based information to be filled-in by the Assessing Officer and inferential analysis

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 HAND BOOK ON JUDICIAL MATTERS

beginning at the level of the Range Head. The parts to be filled-in by the Assessing
Officer and Range Head have been specified. However, the CIT may, in his discretion,
allow the Assessing Officer to fill up the sections meant for Range Head or vice versa,
if the situation so demands, to avoid delay.

iii. In respect of appeals decided in favour of revenue, the Assessing Officer shall submit
only Part I of the proforma in Annex II to the CIT through Range Head and there will
be no need to fill in other parts of the proforma in such cases.

iv. Appeal effect should be particularly monitored by the CIT in the cases in which the
ITAT has decided certain issues in favour of the assessee and set-aside/ remanded back
other issues to the Assessing Officer. The set-aside issues must be decided on priority.

4. Quality of Appeals:

i. An appeal to the High Court or the Supreme Court can be filed only on
‘Substantial Questions of Law’. The CCsIT/ CsIT have to bestow their personal
attention on this issue while taking decision to file appeal under section 260A of
the Act. The Substantial Questions of Law arising out of the order of ITAT must
be clearly identified and suggested draft question of law should be sent to the
Standing Counsels for their consideration

ii. Although the expression ‘substantial question of law’ has not been defined
anywhere in the statute, the Supreme Court in the case of Sir Chunilal Mehta
& Sons v. Century Spinning & Mfg. Co. Ltd. AIR 1962 SC 1314 (applied by
the Apex Court in M Janardhana Rao v. JCIT 273 ITR 50, has laid down the
following tests to determine whether a ‘substantial question of law’ is involved:

a. Whether the issue directly or indirectly affects substantial rights of the parties?
b. Whether the question is of general public importance?
c. Whether it is an open question in the sense that the issue has not been settled by
pronouncement of Supreme Court?
d. Whether the issue is not free from difficulty?
e. Whether it calls for a discussion for alternative views?

iii. Perversity of facts also constitutes ‘Substantial Question of Law’ as it falls in (d)
and (e) above. Hon’ble Supreme Court in Sudarshan Silk & Sarees v. CIT 300 ITR
205 has laid down the attributes of perversity by holding that an order or finding
is perverse on facts if it falls under any of the following categories:

a. The finding is without any evidence.

b. The finding is contrary to the evidence.
c. There is no direct nexus between the conclusion of fact and primary fact upon which
that conclusion is based?
d. When an authority draws a conclusion which cannot be drawn by any reasonable person
or authority on the material and facts placed before it.

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5. Proper Judicial Record Management System:

i. A proper judicial record management system is essential for meaningful conduct of

litigation. The CIT has to, inter alia, ensure that once appeal to ITAT is authorized
against the order of CIT(A), a separate judicial folder for the assessee for a particular
year is maintained in his office. Among other things, the folder should have a copy of
relevant assessment order, the remand report of the Assessing Officer on the order of
the CIT(A), if any, and the scrutiny report submitted by the authorities below.

ii. This folder should be retrieved as soon as the order of ITAT in the case is received. The
scrutiny report on the order of the ITAT may be processed through this folder (where
other relevant papers including the scrutiny report while filing appeal to ITAT should
be available). If the appeal to High Court is filed under section 260A, the relevant
papers (scrutiny report, memo of appeal etc) should also be linked to the same folder.

iii. These judicial folders should be easily retrievable once the judgment of the High
Court in the case is received, so that the decision to file SLP is taken without making
reference to the Assessing Officer / Range Head and proposal to file SLP is processed
in the office of the CIT timely.

iv. Likewise, a separate judicial folder should be maintained in case of assessee’s

appeal under section 260A / writ petitions filed in High Court, which should contain
relevant documents including copy of counter & rejoinder affidavits filed in the Court
proceedings.

v. The CIT should evolve a system through which a digital copy of relevant documents
such as Appeal Memo and its enclosures (assessment order, CIT(A)’s order, ITAT
order etc.) are retained for use at the time of sending SLP proposal in the case, if the
need arises.

6. Preparation of Memorandum of Appeals / Papers etc.

The CIT shall evolve a system in his charge to ensure that:

i. There is proper vetting of Memorandum of Appeals as regards relevant facts therein before
the appeal is actually filed;
ii. Necessary particulars including the correct PAN and CIT charge is mentioned;
iii. All annexures including copies of orders of authorities below are properly typed as per
High Court Rules to avoid defect/office objections.
iv. In case, any document like agreement, depositions etc. crucial to the issue involved and
considered by lower authorities, a copy of the same must be referred to at relevant place
in appeal memo and its copy annexed thereto.

An illustrative list of precautions to be taken to avoid defective appeals/objections being raised in

filing appeals to High Court and guidelines for typing of appeal papers etc. are enclosed as Annexure-
III to this Instruction. However, the Standing Counsels representing the Department’s case may be
further consulted on procedural aspects, wherever considered necessary.
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 HAND BOOK ON JUDICIAL MATTERS

7. Filing of Appeal and Subsequent Monitoring

The CIT should put in place proper mechanism with defined responsibility of different levels of
officials to ensure that:
i. The appeal is filed in the registry of High Court within prescribed time limit as in
Annexure-I.
ii. Diary Number / Lodging Number and ITA Number allotted by the registry is obtained
and recorded in judicial folder in CIT’s office as mentioned in check list / proforma for
scrutiny report on ITAT order at Annexure-II.
iii. In case, the registry of the High court notifies any defect or office objection, immediate
steps are taken to remove the same with the assistance of the filing Counsel and
compliance is reported to him.
iv. One set of appeal memo is sent to the Assessing Officer for linking the same with the
relevant assessment record.
v. In case, the assessee files counter affidavit, the appearing counsel makes available the
same to the CIT/Assessing Officer to file Rejoinder affidavit to rebut the contention of
the assessee.
vi. The appeals are followed up and the Department is effectively represented at every
hearing/stage.
vii. Proper coordination with the appearing counsel is maintained at every stage.
viii. The details and information called for by the High Court/ appearing counsels should be
furnished (in quadruplicate) at the earliest and, in any case at least three days before the
date fixed for hearing before the High Court.

8. Appeal/Writ Petition Filed by the Assessee.

As soon as the memo of appeal / writ petition filed by the assessee is received, a file should be opened
in the office of CIT and assigned a proper identification number incorporating the ITA No. / WP No.
allotted by the High Court. Factual comments on the memo of appeal / writ petition and judicial precedents
in support of the Revenue’s stand should be forwarded by the CIT to the Departmental Counsel for
drafting counter-affidavit. The CIT should ensure that the counter-affidavit is filed within time allowed
by the Court and further follow up actions taken in consultation with the counsel.

9. Power to defend Union of India, Ministry of Finance, Secretary (Revenue),

Chairman CBDT etc. in cases before High Court

All the cases before High Court, pertaining to Direct Taxes, wherein Union of India, Ministry of
Finance, Secretary (Revenue), Chairman CBDT, or any of these figure as respondents, should be defended
by the CCIT/ DGIT concerned. Powers may be delegated to appropriate officers nominated for the purpose
stated above.

The Board may be approached immediately for guidance/ Instructions in case any difficulty is
experienced in exercising these powers. In Writ matters against orders under section 119(2) of the IT
Act, 1961 etc, appropriate instructions may be obtained from the concerned division of the Board
under intimation to ITJ section.

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10. Compliance of High Court Directions

The CIT shall personally ensure compliance of directions of the High Court like Dasti service,
filing of counter or rejoinder affidavit or other specific directions within timeframe to avoid adverse
observations.

There should be close co-ordination between field officers and Standing Counsels in the High
Court so that directions are communicated in time and proper compliance is made to the satisfaction
of the Court.

11. Judgments of High Court containing strictures etc.

Judgments of the High Court containing strictures or which are contrary to Board’s orders,
notifications, instructions, circulars etc. shall be brought to the notice of the Board (concerned
division) immediately by the CCIT/DGIT under intimation to ITJ section of the Board.

12. Assistance to Departmental Counsels

The CIT should ensure that whenever the Departmental Counsel seeks Instructions / clarifications
in a case, the same are attended to by the officers concerned promptly. The counsel should be briefed
properly to strengthen Revenue’s case. The CIT should personally involve himself in cases involving
intricate issues of facts / law having wide ramifications or involving high revenue stake.

A copy of the scrutiny report for filing appeal to High Court should invariably be made available
to the appearing counsel for his assistance in preparation of the case and arguments.

13. Monitoring Mechanism:

i. The CCIT/ CIT shall ensure due adherence to this instruction. In order to facilitate
monitoring, a Register shall be maintained in the office of CIT as per the format
prescribed at Annexure-IV to this instruction.

ii. Quarterly Report of appeals filed in the High Court as prescribed at Annexure-V
to this Instruction shall be furnished by the CIT to the CCIT (CCA) through his
controlling CCIT by the 15th of the month following each quarter. The CCIT
(CCA) in turn shall compile the report and send to the DGIT (L&R) at DELHI_
DGIT- L&[email protected] in digital form by E-mail before end of the
month following each quarter. The DGIT (L&R) shall put up an analysis of such
reports to the Member (A&J) with his comments.

14. This Instruction shall apply in all the appeals being filed in High Courts and matters related
thereto with effect from 1-6-2011.

Note: Reference to the CCIT/DIT in this Instruction includes DGIT/DIT as the case may be

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 HAND BOOK ON JUDICIAL MATTERS

Annexure-I

TIMELINES FOR FILING APPEAL TO HIGH COURT

Sl. Stages No. of days Total Time

No.

1 Receipt of ITAT order in the office of CIT 0 day 0 day

2 Entry in relevant register in the office of CIT & linking with 1 day 1 day
old appeal folder of the case from where appeal to ITAT
was authorized

3 Sending the order to Assessing Officer for necessary 2 days 3 days

action along with a copy to Range head

4 Submission of scrutiny report in prescribed proforma 30 days 33 days

by Assessing Officer to Range head after giving appeal
effect.*

5 Submission of scrutiny Report by Range head to CIT 15 days 48 days

Decision making by the CIT including consultation

6 with the Standing counsel, if needed & submission to 20 days 68 days
CCIT

7 Decision of the CCIT on recommendations of CIT 7 days 75 days

8 Sending appeal folder to the standing counsel for drafting 2 days 77 days
appeal memo by CIT

9 Drafting of Appeal memorandum by the counsel 20 days 97 days

10 Obtaining Appeal Memorandum from Counsel, Vetting, 15days 112 days

preparation of sets with annexures in the o/o CIT and
sending to the standing counsel for filing

11 Actual filing in the HC registry 3 days 115 days

12 Intimation of Diary/ Lodging No to the O/o CIT/ CIT(J) / 3 days 118 days
HC cell
*The CIT shall monitor separately the appeal effect in cases where some issues have been set-
aside/remanded back by ITAT to the Assessing Officer.

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Annexure - II Proforma for ‘Scrutiny Report’ on ITAT’s order
Limitation to file appeal under section 260A expires on:..................................(Parts 1 to 4 are
to be filled-in by the Assessing Officer and 5 to 6 by Range Head. However the CIT may in his
discretion, allow items in part 5 & 6 to be filled-in by Assessing Officer instead of Range Head if
the circumstances so demand)

TO BE FILLED IN ALL THE CASES OF ORDERS OF ITAT 1. Particulars from the order
under scrutiny

S. No. Points Particulars

i Name and address of the assessee
ii PAN
iii Assessment Year
iv ITA No. and date of the order
v Date of receipt of the order in the office of CIT

vi Who was the Appellant (Please tick the applicable) Department or

Assessee or
Both in cross appeal/ cross objections

vii Date of giving appeal effect

viii Overall Tax effect of the order

TO BE FILLED IN ONLY IN THE CASES OF ORDERS OF ITATADVERSE TO REVENUE

2. Information relevant to decision making for filing further appeal by the CIT, in whichever
cases applicable

i Whether it is combined order for more than one assessment years Yes /No
ii If yes specify assessment years involved and identify specific issues related to different
assessment years for filing separate appeals. Use Annexure, if required.

iii Whether it is combined order for more than one assessee Yes/No
iv If yes, whether jurisdiction of all assessees falls in the same Range? Yes/No
v If reply to (iv) above is no, identify the Assessing Officer/Range/CIT having jurisdiction
over other assessees for communication of stand taken on com- mon issues?

vi If the proceeding of order under scrutiny was dependent on some other proceedings
(say order under section 263/set aside order /Registration under section 12A/Approval
etc), specify the present appellate status of the other proceedings along with ITA No./
W.P. No. etc.

Details of issues on which relief allowed by ITAT

i For each issue on which relief is allowed by the ITAT specify (a)
:-

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 HAND BOOK ON JUDICIAL MATTERS

• Issue involved before ITAT

• Relevant page / para No. of (b)

(i) assessment order,

(ii) CIT(A)’s order and

(iii) ITAT’s order

(issues involved to be mentioned in brief, for (c)

illustration - disallowance of interest for interest
free loan given; repair expenses treated as
capital; accrual of interest income on Bonds,
deduction under section 80IB etc)
ii Tax effect in respect of each issue on which relief is allowed by ITAT: (a)…… (b) (c)……

iii Whether any factual finding given by ITAT is contrary to material on record? If
yes, specify in detail indicating specific para of order under scrutiny & material
on record contradicting such a finding.

iv Whether similar issue involved in the case of assessee in earlier year? If yes, then
mention the year and present status of appeal.

v If same issue is involved in subsequent years in the case of assessee,

stand taken by the Assessing Officer/status of appeal, if any.

vi Has ITAT relied upon any judicial decision? If yes, has a copy Yes/No/Not

been annexed or citation given in case of reported decisions? (Note: Whether the applicable
relied upon decision has been challenged in further ap- peal? If so, the present
status may be given.)

vii Whether the issue arises out of audit objection? Y/N

viii If yes, whether audit objection is included in Draft Para? Also state whether Audit
objection has been accepted by the department or not.

ix Is any prosecution proceeding pending or contemplated in the case on the issue

on which the appeal is sought to be filed?

Item (iv) is extremely important, if applicable, (the involvement of issue in earlier year may
already be indicated in assessment order or CIT(A) / ITAT order)

179
General
i If aggregate tax effect in 3(ii) above is below the limit prescribed for filing of appeal
in CBDT Instruction No. 3/2011? Whether the case falls in any of the exception
laid down in the said Instruction? If so, specify clause No.

ii Due date for submission of report to Range head (33 days from the date of receipt
of ITAT order in CIT office)
Submitted to the Addl./Jt. CIT, Range-……………,… for kind consideration
& further action.

The assessment records in volumes are also sent herewith.

Date: Signature
Place: Name & Designation of the A.O.

Scrutiny report on ITAT order to be prepared by Range Head

A. If the tax effect in 4(i) above is below prescribed limit and case does not fall in any exception of
Instruction No. 3/2011, detailed scrutiny may not be taken up and only general recommendation
as to whether decision of ITAT is prima facie acceptable on merits or not, may be given.
B. In cases other than at ‘A’ above, the Range head will cover following points, as may be
applicable, on each issue where relief is allowed by ITAT, in his scrutiny report in a separate
Annexure.
i • Description of issue involved in brief,
• Basis of addition/ disallowance made,
• Reasons for grant of relief. Reasons for grant of relief.
ii Whether issue involves finding of fact only?
iii If yes, whether the finding of fact is inconsistent with material
on record, rendering the order of ITAT perverse?
iv If (iii) above is yes, explain which parameters of perversity are
satisfied and how?
v If (iii) above is no, whether the decision of ITAT is acceptable
or a miscellaneous application /Petition (MA/ MP) needs to be
filed for correction of mistakes apparent from record?

vi Whether any ‘Substantial Question of Law’ (SQL) arises from

the order of ITAT?
vii If yes, ‘Substantial Question of Law’ proposed to be referred to
High Court, to be drafted by the Range head for assistance of CIT

viii Are judicial precedents available in support of the question

framed? Mention citation.

Final Summary of report

Appeal is recommended on issues No. ……., ……., & …….,

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 HAND BOOK ON JUDICIAL MATTERS

Aggregate tax effect on issues on which appeal is recommended

Due date for submission of report in CIT office

(48 days from the date of receipt of ITAT order in CIT office)

Submitted to the CIT,………….., ………………for kind consideration & further action.

7. Recommendation of the CIT on the scrutiny report:

A. Issue wise recommendation of the CIT, as to whether decision of ITAT is acceptable

or not, may be recorded with reasons:
Issue (a)
Issue (b) ……………….. and so on
Aggregate tax effect on issues proposed to be contested in the High-
Court
If tax effect is below prescribed limit, and appeal is recommended in
view of the exceptions in Instruction No. 3 of 2011 dated 9-2-2011,
specify clause No.

B. Substantial Question of Law’ to be proposed to High Court, is to be framed in respect

of the issues not accepted by CIT.
C. In case of a consolidated order of ITAT involving more than one asessees falling under
jurisdiction of different CsIT, the CIT shall communicate the stand taken on common
issues to the CIT having jurisdiction over other cases.

Date: Signature of the Range head

Place: Name & Designation

8. Decision of the CCIT on the recommendation of CIT:

The CCIT shall take final decision as regards filing of appeal to High Court under section 260A
of the IT Act.
i. The CCIT may approve or modify the ‘Substantial Question of Law’ proposed by the
CIT or accept the order of High Court giving reasons.
ii. In case where CIT has not recommended filing of appeal and the CCIT is not in agreement
with the CIT, he may record reasons for differing with the CIT and direct filing of
appeal after drafting / indicating the ‘Substantial Question of Law’ involved.

Note: While taking decision on filing of appeal where item (7)C above is applicable, the CCIT
shall take steps to resolve the conflict, if any, in the stand taken by different CsIT on common issues

Date: Signature
Place: Name & Designation

181
9. Categorization of the final decision of the CCIT (to be recorded by CIT):

A. The appeal is not to be filed

i. As the order is acceptable on merits, or
ii. Even though the decision is not acceptable, appeal is not being filed only on the consideration
that the tax effect is less than the monetary limit specified in CBDT Instruction No. 3 of 2011,

B. Appeal is to be filed on the ‘Substantial Question of Law’ framed above

i. As the order is not acceptable on merits and ‘Substantial Question of Law’ arise, or
ii. Though tax effect is below the prescribed limit, the case falls in exceptions (to be specified)
of the Instruction No. 3 of 2011.

Date: Signature
Place: Name & Designation

10. Actual Filing of appeal:

The CIT shall ensure that further steps for filing of appeal are taken so as to meet the limits as
indicated in the time line. After filing of appeal the following details shall be recorded:

Diary No. / Lodging No.:.............................................dated:

ITA No.: …………………. of ………………….

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 HAND BOOK ON JUDICIAL MATTERS

Annexure - III ILLUSTRATIVE LIST OF PRECAUTIONS TO BE TAKEN TO AVOID

DEFECTIVE APPEALS/OBJECTIONS BEING RAISED IN FILING THE APPEALS
BEFORE THE HIGH COURT Dates:-
i. The dates should be written correctly and no blanks should be left.
ii. The relevant assessment year, dates of appellate orders along with ITA No. and the
date of its receipt in the CIT’s office should be mentioned.
iii. The date of order should be mentioned on the concerned exhibits.
iv. The dates of orders in the index, in averment of appeal and in exhibits should not
mismatch.

Exhibits:-
i. All exhibits should be marked in the margin on the left side in the Memo of Appeal,
whenever an exhibit is introduced.
ii. All exhibits should be marked separately in the index along with dates.
iii. The exhibits should be clear and copies attached should be legible.
iv. Certified true copies of exhibits should bear the signature of the person making the
averment of the correctness of the appeal filed.
v. There should be no mistake in typing and a comparison should be made of the typed
copy with the original before filing.

Time-barred appeals:-

i. If appeals are time barred by limitation, an application for condonation of delay along
with the affidavit explaining the delay should be attached.
ii. In cases of extraordinary delay, a detailed affidavit explaining each day of delay should
be attached.

Appeal title:-
i. The Appeal title should show specific CIT charge and place for example CIT-III Chennai
or CIT-XII Delhi or DIT (Exemption), Ahmedabad or CIT(C)-II, Mumbai etc.
ii. The ITA number, that is, the appeal number given by the Appellate Tribunal should be
correctly mentioned in appeal title in the memo of appeal.
iii. The relevant section under which appeal is filed should be mentioned in the title.

Numbering of pages:-

i. The pages should be correctly numbered and no blanks should be left either in the
pages or in the index.
ii. All pages should be initialled.

Note of appearance:-

i. The note of appearance must be dated by the counsel (the lawyer who files the

183
 Vakalatnama)Flagging of relevant papers:-

i. The proforma, synopsis, prayers, impugned orders and exhibits should be duly flagged.

ii. The prayer clause must be flagged.

Other details:-
i. The synopsis should be complete and should contain a list of case laws relied upon.
ii. Details of disputed claim must be given in rupees.
iii. Valuation clause for Court fee payment to be written.
iv. Denomination of Court fee stamps to be given.
v. Confirmation of Court fee payment should be made.
vi. The original set should be carefully prepared and no part of duplicate sets should come
into or be made a part of original sets.
vii. The paras in the appeal memo must be correctly numbered

GUIDELINES FOR TYPING AND PREPARATION OF APPLICATION U/S 260A

i. Typing should be in double space throughout on full-scape paper. One and a half space
may be used, but single space typing is forbidden.
ii. A margin of two inches on the left and right side of the paper and at least one inch on
the top and bottom of paper should be left.
iii. The pleadings to be filed in the High Court are stitched on the left side and proper
space should be left for stitching, so that the typed matter should not get hidden inside
the stitches.
iv. All the blanks regarding dates, names etc. should be filled in after minutely checking
up the matter. No blanks should be left.
v. The signing officer should write at the end of each Exhibit- “True Copy” and put his
signature and name below it.
vi. In all the exhibits, on the first page, the exhibit number should be written in good
handwriting on the top right hand corner.
vii. In the body of the petition when an exhibit is first introduced, a clarification must
follow as to what it is - e.g. “ hereto annexed and marked as ‘Exhibit - A’ being a
copy of the order of the Assessing Officer………..”. Therefore, the words “Exhibit -
A” should be written on the left hand margin. At the end of each exhibit, the date of
passing of the order (of the relevant exhibit) should be written.
viii. The signing officer should sign both sets of papers which are meant for judges.
ix. The High Court rules require advance service of appeal/Writ petition, reply affidavit,
counter affidavit, rejoinder etc. and attachment of proof of service. The proof of service
is to be attached with the original set.

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 HAND BOOK ON JUDICIAL MATTERS

x. Certified true copy of the impugned order should be attached with the original set.
In case of common order disposing off a number of appeals, a separate application
seeking permission of the court for not filing the original copy of ITAT order should
be moved.
xi. Court fees stamps should be affixed on the right top corner and not in the margin.
xii. Any cuts or erasures on the application should be initialled by the Signing Officer in
the presence of the Court Officer while filing the appeal.
xiii. Each and every section of the application should be duly flagged..

Annexure - IV Format for Register to be maintained in office of CIT

Sr. Name of A.Y. Date ITA Result Date of Date of Date Date Diary/ Delay
No Assessee PAN of No. of receipt limitation of of lodging in
order appeal of order giving filing No. of filing of
of in CIT appeal of appeal appeal
ITAT office effect appeal filed (in
number
of
days)

Annexure - V QUARTERLY REPORT ON APPEALS TO HIGH COURT

CCIT (CCA) Region : ………………………………..

Quarter & the year for which details are furnished : ………………………………..

Appeals before High Courts:

Total no. of appeals filed before High Court during the Quarter as per
Format-I Annexed.
No. of appeals filed within statutory time limit

No. of appeals filed with delay beyond 30 days as per Format-II An-
nexed.

185
Format-I: Particulars of appeals filed during the quarter ending ……………

Sr. Name of A.Y. Date of Question Tax Provision of CCIT CIT

No. assessee order of ITA of law effect. the Income tax Region Charge
Tribunal No. raised (Rs. in Act involved
lakhs)

Format-II: Particulars of delayed appeals filed during the quarter ending …………

Sr. Name of No. of Tax effect CCIT CIT Name Reasons Action
days of involved. (Rs. Region of the of Delay taken
No. assessee in lakhs) Charge CIT
delay

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 HAND BOOK ON JUDICIAL MATTERS

ANNEXURE C2 : F.NO, CIT(NaFAC)-1/58/2021-22/333 DATED 26.07.2021.

Standard Operating Procedure (SOP) for handling Writ Petitions where assessment is made under
the Faceless Assessment Scheme 2019 (FAS,19)/section 144B of the IT Act, 1961(the Act) and or
penalty is passed under Faceless Penalty Scheme(FPS), 2021, where NaFAC/CBDT is one of the
respondents.

National Faceless Assessment Centre, Delhi

2nd Floor, Eramp
Delhi-110003
Jawaharlal Nehru Stadium, Delhi-110003
Dt.26.07.2021

To,

All Principal Chief Commissioners of Income-tax

Sub:- Standard Operating Procedure (SOP) for handling writ petitions where assessment is made
under the Faceless Assessment Scheme 2019 ( FA S ’ 19)/section 144B of the I T Act, 1961(the
Act) and or penalty is passed under Faceless Penalty Scheme (FPS), 2021, where NaFAC/CBDT
is one of the respondents-Reg.

Madam/Sir,

1. The Central Board of Direct Taxes (CBDT)has issued detailed guidelines for the
implementation of FAS 2019 dated 14.08.2020 vide F. No. 173/165/2020-ITA-I which
inter-alia mandate that the field formations of jurisdictional charges outside t h e
National Faceless Assessment Centre (NaFAC)/ Regional Faceless Assessment
Centers ( R e F A C s ) hierarchy shall perform the j u d i c i a l functions including
defending w r i t petitions.

2. The FAS 2019 has been incorporated into the Act vide the Taxation and Other Laws
(Relaxation and Amendment of Certain Provisions) Act, 2020 as section 144B of the
Act with effect from 01.04.2021. In pursuance to the said amendment, the CBDT had
passed order u/s 119 of the Act dated 31.03.2021 enabling all orders, circulars,
instructions, guidelines and communications issued in order to implement the Scheme
henceforth mutatis mutandis be applicable to the Faceless Assessment u/s 144B of the
Act. Hence, in pursuance of the above two administrative directions, all judicial
functions including defending writ petitions shall be performed by the jurisdictional
Income tax Authorities, considering the original jurisdiction lies with the Jurisdictional
Assessing Officer (JAO) with concurrent jurisdiction being vested in the Na FAC
under sub-section (5) of section 120 of the Act for the limited purpose of assessment.

187
 3. It is being observed that NaFAC is one of the respondents in most of the writs,
because all orders under FAS 2019 or u/s 144B of the Act are issued from NaFAC.
As such NaFAC has no primary role in defending the writ except in case where the
scheme itself is challenged or a wider policy issue is involved. Hence, for this
purpose, in each such case, the NaFAC shall authorize the Pr. CIT (Jurisdictional)
as the authority to defend the case before the Hon’ble HighCourts.

4. Further, the C13DT lays down the following SOP on the above subject for clarity
and step-by-step guide on the matter:-

A. SOP for PCIT jurisdictional Charge being Nodal Coo rdinating Authority for
defending writ petitions arising from the assessment/ penalty proceedings pending before
NaFAC:

PCIT (Jurisdictional) has to handle the writ petition matters with assistance from office of the Pr.
CCIT, CIT (Judicial) of the Region and PCIT (ReFAC) (AU) concerned. In such situation, inputs
and parawise comments shall be provided by PCIT (ReFAC) (AU) as the case records during the
pendency of proceedings before NaFAC will not be visible to the POT (Jurisdictional). In such
cases:-

1. Information about f i l ing of a WP before the Jurisdictional High Court shall be forwarded
by CIT (Judicial) or PM (Jurisdictional) to CIT (NaFAC)-3, New Delhi as soon as possible
and without any delay and on identification, the writ petition will be referred to the PCIT
(ReFAC)(AU) concerned.

2. On receipt of the information from concerned Pr. CCIT (Jurisdictional)/High Court Cell/
Website of the High Court/ any other source, the CIT (NaFAC)-3, New Delhi would
request ITBA for identification of the PCIT (ReFAC) (AU) involved immediately without
any delay and on identification, the writ petition will be referred to PCIT(ReFAC)(AU)
concerned.

3. The PCIT (ReFAC) (AU) shall examine the Writ Petition in the context of facts of the
case and applicable law. The PCIT (ReFAC) (AU) can view all the case records including
case history noting through the status monitor.

4. The PCIT (ReFAC) (AU) shall examine the petition of the petitioner and record parawise
comments with reference to the issues involved in the writ petition and cross verify it
with the information available on record for the case on ITBA. On any technical issue/
process, if required, the PCIT (ReFAC) (AU) may seek clarification/information from
CIT ITBA.

5. Parawise comments so received from PCIT (ReFAC) (AU) shall be forwarded to the PCIT
(Jurisdictional) and office of Pr. CCIT with the request to take necessary measures to
defend the case before the Hon’ble High Court.

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 HAND BOOK ON JUDICIAL MATTERS

6. The POT (ReFAC) (AU) would make a reference for seeking specific comments to the
NaFAC in the following circumstances:

i. Any provision related to FAS 2019 or section 144B of the Act is challenged in the
writ or during the course of arguments.
ii. Specific inputs are required on any policy issue.

Such reference to NaFAC for comments shall be in the prescribed format as per Annexure-A
and should include parawise comments of the PCIT (Jurisdictional) / PCIT (ReFAC) (AU)
on the writ petition supported with necessary documents such as writ petition, assessment
order, case history noting etc.

7. Reference to NaFAC on specific policy issues and on specific provisions of FAS, 2019 /
section 144 B of the Act challenged, shall be made in exceptional circumstance srequiring
specific advice on policy matters and not on the issues related to facts of the case. This
should ideally be done within 5 days of receipt of the Writ petition in the 0/o PCIT
(Jurisdictional) or immediately if the writ is coming up earlier.

8. The practice of seeking general comments/directions from NaFAC must be avoi ded.

9. The PCIT ( Jurisdictional ) shall be authorized by Na FAC to defend the case, give directions
regarding the arguments and decide on the stand to be taken before the Hon’ ble higher
courts. The parawise comments/inputs/instructions to counsel (if required) shall be
provided by PCIT (ReFAC) (AU) to PCIT (Jurisdictional) in such c ases.

10. Till the utility for communication between PCIT (Jurisdictional) and PCIT (Re FAC) (AU)
is made functional, the coordination between both the officers shall be done through office
of CIT (NaFAC)-3, New Delhi. E- mail ids of the officers of C IT ( 3 ) , NaFAC are given
at the end of this SOP.

B. SOP for PCIT (Jurisdictional) Charge being Nodal Coordinating Authority f o rdefending
writ petitions arising from the assessment / penalt y o rder s completed by NaFAC :

1. On receipt of the Writ Petition, the PCIT (Jurisdictional) shall examine the Writ
Petition in the co n text of facts o f the case and applicable law. The JA0 can view all
the case records including ‘case history notings’ through the status monitor and furnish
its comments considerin g all the fact s and legal issues involved.

2. The POT (Jurisdictional) shalle xamine the petition of the taxp ayer and record parawise
comments with reference to the issue involved in the writ petition and cross verify it
with the information for the case available on record in ITBA. On any technical issue/
process, if required, the PCIT (Jurisdictional) may seek clarification/information from
CIT ITBA.

3. If the facts so warrant, the PCIT (Jurisdictional) may seek the comments of the PCIT
(ReFAC) (AU) under whose Jurisdiction the assessment order had been passed. The
PCIT (Jurisdictional) shall record reasons in writing and make reference for unmasking
of the AU concerned to the NaFAC (on email <[email protected]>

189
 with a copy marked to Addl.CIT-3(1) NaFAC<[email protected]/
in>) & DCIT 3(2) (2)NaFAC<[email protected]>). After
unmasking, the PCIT (Jurisdictional) and PCIT (ReFAC) (AU) may coordinate
amongst themselves through email/faceless communication facility in ITBA as and
when available

4. The PCIT (Jurisdictional) will make refer en cefor seeking sp ecific comments to the
NaFAC in the following circumstance:

i. Any provision related to FAS 2019 or section 144B of the Act or FPS, 2021 is
challenged in the writ or during the course of arguments.

ii. Specific inputs are required on any policy issue.

Such references to NaFAC are to be handled in the same manner as mentioned in para (A)(6).
These references to NaFAC on specific policy issues and on specific provisions of FAS, 2019 or
section 14413 of the Act or FPS 2021, challenged shall be in exceptional circumstances requiring
specific advice on policy matters and not on the issues related to facts of the case. This action
should ideally be done within 5 days of receipt of the writ in the O/o PCIT (Jurisdictional) or
immediately if the writ is coming up earlier.

Again, the practice of seeking general comments/directions from NaFAC is to be avoided.

5. A number of writs have been filed because of apparent violation of principles of natural
justice. In many such cases, the High Courts have setaside the cases back to the file of
the Assessing Officer for giving a fresh opportunity and for taking into consideration
the submissions of the a ssesse. When such an order is received in any case, the PCIT
(Jurisdictional) will direct the JAO to immed iately create a set aside proc eedings in ITBA.
After creating of the proceedings, the ITB A may be requested to reallocate the case to FAO.
6. In case of unfavorable order of Ho’ble High Court, the decision on filing of appeal or stay
application before division bench if the order is of single bench or filing of SLP or otherwise
shall be taken by the Pr. CIT ( Jurisdictional) in acc ordan ce with existing guidelines issued
by Pr. DGIT9 L&R ) and CBDT f rom time to time.
7. If unfavorable order of Hon’ ble High Court received in a case where proceedings are
pending b efore NaFAC , inputs and comments of Pr. CIT (ReFA C)(AU) shall be obtained
by PCIT (Jurisdictional) for taking a decision on acceptability or otherwise of the order.

C. SOP for Standing Counsels and CIT (Judicial) of the relevant jurisdiction:
1. The standing counsels or the O/o CIT (Judicial) shall seek comments/directions from
the concerned PCIT (Jurisdictional) only. They shall not refer the writ petition directly to
NaFAC.

2. During the course of defending a writ petition, if certain directions/comments are

required from the NaFAC, the request for the same shall be made by the concerned PCIT
(jurisdictional) as per SOP Para B.4 and not directly by the standing counsel. The standing
counsel shall make a request to the concerned PCIT (Jurisdictional) for the same.

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 HAND BOOK ON JUDICIAL MATTERS

D. SOP for PCIT (ReFAC) (AU) concerned:

1. On receipt of request for giving comments on the writ, the PCIT (ReFAC) (AU) shall ensure
that the AU concerned examines the petition of the taxpayer with reference to the issue
involved in the writ. The AU shall cross verify and record parawise comments with the
information available with the office concerned, within a time limit specified for this purpose.
2. The Pr. CIT (ReFAC)(AU) will supervise and monitor the process of framing parawise
comments in accordance with FAC, 2019 / section 144B of the Act or FPS, 2021 and the
orders, circulars and notifications issued thereunder. The parawise comments will be
approved by Pr. CIT (ReFAC)(AU) and CCIT (ReFAC) and before they are sent to PCIT
(Jurisdictional).
3. PCIT (ReFAC) (AU) concerned may coordinate with PCIT (Jurisdictional) themselves
email/faceless communication facility in 1TBA as and when available. This action should
ideally be completed within 5 days of receipt of the writ in the 0/o PCIT (ReFAC) (AU).

E.SOP for NaFAC:

1. On receipt of a writ petition directly from the petitioner or the Standing Counsel or the High
Court or the CIT (Judicial) concerned, a copy shall be forwarded to the PCIT Jurisdictional),
in case, proceedings are completed and to PCIT (ReFAC) (AU) where proceedings are
pending [with copy to PCIT (jurisdictional)b within 5 days of receipt for necessary action as
per Para A. In view of CBDT communication vide F. No. 1730 65/2020-1TA-I dated 14-08-
2020 the NaFAC shall authorize the PC1T ( Jurisdictional) as the Authority to defend the case
before the Hon’ble High Courts.

2. On receipt of request from PCIT(Jurisdictional) for unmasking of AU, the Na FAC shall
forward the request to the Directorate of Systems for unmasking of the AU concerned and
provide such details of the PCIT (ReFAC) (AU) concerned to the PCIT (jurisdictional).

3. On receipt of request from the PCIT (Jurisdictional) for specific inputs on policy matters or
provisions related to FAS 2019/section 144 of the Act or FPS, 2021 being challenged, the
NaFAC shall:-

- Examine whether the request is accompanied by terms of reference for seeking comments
of NaFAC as per prescribed template. Prescribed template is enclosed as Annexure - A.

- Analyse the writ petition and respond on broad policy issues. If required, NaFAC may refer
the petition to the CBDT and Directorate of Legal and Research and obtain comments
from the relevant division before sending a response to the PCIT (Jurisdictional).

F. SOP for CIT ( ITBA), Directorate of Systems:

1. On receipt of request for unmasking of the AU from NaFAC, the ITBA team shall give the
details of PCIT (ReFAC) (AU) concerned.

If the modification to returned income is done by the new AU after modification suggestions
reported by the Review Unit, details of both the AUs (original and new) shall be provided.

191
 2. A number of writs have been filed because of apparent violation of principles of natural justice.
In many such cases, the High Courts have set aside the cases back to the file of the Assessing
Officer for giving a fresh opportunity and taking into consideration the submissions of the
assessee. On receipt of such set aside request as per para B.5 from the PM (Jurisdictional), the
ITBA shall ensure that:

3. The work item shall be transferred automatically to the same ReFAC inwhich the case was
originally assessed for the completion of the same. If the modification to returned income is
done by the new AU after modification suggestions reported by the Review Unit, the work item
shall be transferred automatically to the original ReFAC AU in which the case was originally
allocated at the first instance for the completion of the same.

The work item is to be completed by the ReFAC AU concerned.

4. This SOP may be brought to the notice of all Pr.CsIT and other field officers for necessary
action.

This issues with the approval of Central Board of Direct Taxes (CBDT).

(Jaishree Sharma)
Addl. Commissioner of Income-tax (NaFAC)-1 (1),
New Delhi

Copy forwarded to:-

i. Chairman, CBDT and all Members, CBDT.

ii. Pr. DGIT(Systems), New Delhi.

iii. ADG (Systems)-4, New Delhi, for placing on the website: Incometaxindia.gov.in.

iv. Addl. CIT, Data base Cell for uploading on “https://www.irsofficersonline.gov.in”.

Addl. Commissioner of Income-tax (NaFAC)-1 (1),

New DelhiAC).- (1)
New DelhI

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 HAND BOOK ON JUDICIAL MATTERS

ANNEXURE C3: F.NO.NaFAC/Dehli/CIT-3/2022-23/339/76 DATED 01.08.2022

Standard Operating Procedure (SOP) for handling Writ Petitions against Assessment Proceedings
conducted under section 144B of the IT Act, 1961 or Penalty Proceedings under Faceless Penalty
Scheme(FPS), 2021.

Government of India
Ministry of Finance
Central Board of Direct Taxes
National Faceless Assessment Centre
New Delhi

Dated: 01.08.2022

Subject: Standard Operating Procedure (SOP) for handling Writ Petitions against  Assessment
Proceedings conducted under Section 14413 of the Income Tax Act, 1961  or Penalty Proceedings under
FPS 2021

As per the guidelines issued by the CBDT for implementation of the Faceless Assessment Scheme
2019, dated 14/08/2020 (issued vide F. No. 173/165/2020-ITA-I), the responsibility for defending
writ petitions has been assigned to jurisdictional hierarchy. Hence, all judicial functions including
defending the interest of revenue, on behalf of all respondents, is to be discharged by the concerned
Jurisdictional PCIT, under the concerned PCCIT(CCA).

To facilitate exchange of inputs between jurisdictional and faceless charges and also for seeking
comments of the CBDT and NaFAC on policy matters involving Faceless Assessment and/or
Faceless Penalty Scheme (FPS), Principal Chief Commissioner of Income Tax, National Faceless
Assessment Centre, with the prior approval of the Central Board of Direct Taxes, New Delhi, lays
down the following SOP for handling Writ Petitions challenging ongoing/completed assessment/
penalty proceedings under Faceless Assessment Scheme/Section 144B/Faceless Penalty Scheme.
This SOP is in supersession of the earlier SOP dated 26.07.2021 bearing F.No.
CIT(NaFAC)-1/58/2021-22/333 and is applicable with immediate effect.

A. Nature of Writ Petition (WP)

A.1. Writ Petitions challenging assessment/penalty proceedings may pertain to:
A.1.1 Completed assessment/penalty proceedings;
A.1.2 Ongoing assessment/penalty proceedings.

B. Procedure for handling WP against completed assessment/penalty cases

B.1. It shall be the responsibility of the concerned jurisdictional PCIT to handle WP against
completed assessment/ penalty cases. This includes:

a. Uploading/ attaching Writ Petition in Insight, using VRU functionality;

193
 b. Preparation of affidavit/ counter affidavit/ para wise comments;

c. Timely filing before the High Court;

d. Briefing the Standing Counsel;

e. Maintaining details of proceedings;

f. Ensuring appearance on the date of hearing;

g. Obtaining copy of High Court order;

h. Uploading /attaching interim orders / final order/ other judicial correspondences

in Insight, using VRU functionality;

i. Complying with or enabling implementation of the directions of the High Court,

as the case may be, including creation of a new/set aside work-item and request
to NaFAC for assignment of case to AU, and uploading order of stay/ vacation
of stay order against pending penalty work-item in ITBA;

j. Taking decision on acceptance of the order or filing SLP in the Supreme Court
or filing Review Petition in the High Court.

B.2 Upon receipt of WP, the Jurisdictional Assessing officer (JAO), under the direction of the
jurisdictional PCIT, shall take following actions:

B.2.1. Prepare affidavit /counter affidavit/para-wise comments on the basis of information

available in Case History Noting, accessed through Status Monitor functionality of ITBA.

B.2.2. Comments may be obtained by JAO from the Directorate of Systems, if system/ technical
issues are under challenge and the same is not discernible from the Case History Noting.
B.2.3. Comments may be obtained by JAO from NaFAC only when:

B.2.3.1. SOP for assessment/ penalty issued by NaFAC, is under challenge;

B.2.3.2. Interpretation or constitutionality of Faceless Assessment Scheme, 2019; Section

144B; Faceless Penalty Scheme, 2021; Faceless Penalty (Amendment) Scheme, 2022 and/
or Notification/Instruction, issued by the CBDT in respect thereto, is under challenge.
B.2.4. Communication with NaFAC, seeking comments as per Para B.2.3 shall be made
through the following emails:

[email protected];
[email protected];
[email protected];
[email protected],in
B.2.5. No request for unmasking the AU/PU shall be made to NaFAC, except where the Court seeks
personal affidavit/ attendance or personal compliance, of the officers of the AU/PU;

194
 HAND BOOK ON JUDICIAL MATTERS

B.2.6. Request for unmasking the AU/PU shall be made to NaFAC, through emails referred in Para
B.2.4, citing the reasons for unmasking;

B.2.7. Where unmasking is done, upon receipt of particulars of the AU/PU:

B.2.7.1. JA0 shall correspond directly with the AU/PU, with copy to NaFAC for information on
the emails as per Para B.2.4.

B.2.7.2. AU/PU shall provide the requisite details with the approval of the PCIT of the AU/PU;

B.2.7.3. AU/PU shall use the designation based e-mail to respond directly to JAO, with copy to
NaFAC for information on the emails as per Para B.2.4;

B.2.8. Upon receipt of inputs from AU and Directorate of Systems/NaFAC/CBDT, as the case may be,
JAO shall prepare affidavit/counter affidavit/ para-wise comments.

C. Procedure for handling WP against pending or ongoing assessment/penalty cases

C.1. It shall be the responsibility of the concerned jurisdictional PCIT to handle WP against
pending or ongoing assessment/ penalty cases. This includes:

a. Uploading the Writ Petition immediately on the ITBA, using the common function module;

b. Preparation of affidavit, counter affidavit, para-wise comments with the inputs /para-wise
comments, provided by the AU;

c. Timely filing before the High Court;

d. Briefing the Standing Counsel;

e. Maintaining details of proceedings;

f. Ensuring appearance on the date of hearing;

g. Obtaining copy of High Court order;

h. Uploading the High Court interim order/order on the ITBA immediately, using the common
function module;

i. Complying with or enabling implementation of the directions of the High Court, including
communication to NaFAC immediately about stay/vacation of stay order;

j. Taking decision on acceptance of the order or filing SLP in the Supreme Court or filing Review
Petition in the High Court.

C.2. Upon receipt of WP, the Jurisdictional Assessing officer (JAO), under the direction of the
jurisdictional PCIT, shall take following actions:

195
C.2.1. Request for unmasking shall be made to NaFAC, through the following emails:

[email protected]

[email protected];

[email protected];

[email protected]

C.2.2. Unmasking shall be limited to the PCIT of the AU/PU.

C.2.3. Where unmasking is done, upon receipt of particulars of PCIT of the AU/PU:

C.2.3.1. JAO shall correspond through his PCIT with the PCIT of the AU/ PU with copy to
NaFAC for information on the emails as per Para C.2.1;

C.2.3.2. PCIT of the AU/PU shall provide the requisite details without mentioning the specific
AU/PU details;

C.2.3.3. PCIT of AU/PU shall use the designation based e-mail to respond directly to PCIT of
JAO with copy to NaFAC for information on the emails as per Para C.2.1.

C.2.4. Comments may be obtained by JAO from the Directorate of Systems, if system/ technical
issues are under challenge.

C.2.5. Comments may be obtained by JAO from NaFAC when:

C.2.5.1. SOP for assessment/ penalty issued by NaFAC, is under challenge;

C.2.5.2. Interpretation or constitutionality of Faceless Assessment Scheme, 2019; Section

1448; Faceless Penalty Scheme, 2021; Faceless Penalty (Amendment) Scheme, 2022 and/
or Notification/Instruction, issued by the CBDT in respect thereto, is under challenge.

C.2.6. Upon receipt of inputs from PCIT of AU/PU and Directorate of Systems/ NaFAC/ CBDT,
as the case may be, JAO shall prepare affidavit/ counter affidavit/ parawise comments.

This issues with the approval of Central Board of Direct Taxes.

(Puja Jindal)
Commissioner of Income Tax -3, NaFAC
New Delhi

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 HAND BOOK ON JUDICIAL MATTERS

Copy to:

1. Chairman and all Members of the CBDT.

2. Al! Pr. Chief Commissioners of Income Tax with a request to bring to the attention of all
officers under their charge.

3. DG (Systems), New Delhi.

4. All CIT (Judicial)

5. CIT (NaFAC) —1,2 & 4

6. Data Base Cell, with the request for uploading on “https://www.irsofficersonline.gov.in”.

(Puja Jindal)
Commissioner of Income Tax -3, NaFAC
New Delhi

197
ANNEXURE: D1: CIRCULAR NO.24/2019 [F. No. 285/08/2014- IT(INV.
V)/349] DATED 09-09-2019.
Procedure for identification and processing of cases for prosecution under Direct Tax Laws-reg.
Circular No. 24 /2019

F.No.285/08/2014-IT (lnv. V)/349

Government of India
Ministry of Finance Department of Revenue
(Central Board of Direct Taxes)

Room No. 515, 5th Floor, C-Block,

Dr. Shyama Prasad Mukherjee Civic Centre, Minto Road, New Delhi -110002.
Dated: 09.09.2019

Subject: Procedure for identification and processing of cases for prosecution under Direct Tax
Laws-reg.

1. The Central Board of Direct Taxes has been issuing guidelines from time to time for streamlining
the procedure of identifying and examining the cases for initiating prosecution for offences
under Direct Tax Laws. With a view to achieve the objective behind enactment of Chapter
XXII of the Income-tax Act, 1961 (the Act), and to remove any doubts on the intent to address
serious cases effectively, this circular is issued.
2. Prosecution is a criminal proceeding. Therefore, based upon evidence gathered, offence and
crime as defined in the relevant provision of the Act, the offence has to be proved beyond
reasonable doubt. To ensure that only deserving cases get prosecuted the Central Board of
Direct Taxes in exercise of powers under section 119 of the Act lays down the following criteria
for launching prosecution in respect of the following categories of offences.

i. Offences u/s 276B: Failure to pay tax to the credit of Central Government under
Chapter XII-D or XVII-B.
Cases where non-payment of tax deducted at source is Rs. 25/- Lakhs or below, and the
delay in deposit is less than 60 days from the due date, shall not be processed for
prosecution in normal circumstances. In case of exceptional cases like, habitual defaulters,
based on particular facts and circumstances of each case, prosecution may be initiated
only with the previous administrative approval of the Collegium of two CCIT/DGIT rank
officers as mentioned in Para 3.

ii. Offences u/s 276BB: Failure to pay the tax collected at source.
Same approach as in Para 2.1 above.

iii. Offences u/s 276C(l): Wilful attempt to evade tax, etc.

Cases where the amount sought to be evaded or tax on under-reported income is Rs.25
Lakhs or below, shall not be processed for prosecution except with the previous
administrative approval of the Collegium of two CCIT/DGIT rank officers as
mentioned in Para3.

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 HAND BOOK ON JUDICIAL MATTERS

Further, prosecution under this section shall be launched only after the confirmation of
the order imposing penalty by the Income Tax Appellate Tribunal.

iv. Offences u/s 276CC: Failure to furnish returns of income.

Cases where the amount of tax, which would have been evaded if the failure had not
been discovered, is Rs. 25 Lakhs or below, shall not be processed for prosecution
except with the previous administrative approval of the Collegium of two CCIT/DGIT
rank officers as mentioned in Para 3.

3. For the purposes of this Circular, the constitution of the Collegium of two CCIT/DGIT rank
officers would mean the following-
As per section 279(1) of the Act, the sanctioning authority for offences under Chapter XXII is
the Principal Commissioner or Commissioner or Commissioner (Appeals) or the appropriate
authority. For proper examination of facts and circumstances of a case, and to ensure that only
deserving cases below the threshold limit as prescribed in Annexure get selected for filing of
prosecution complaint, such sanctioning authority shall seek the prior administrative approval of a
collegium of two CCIT/DGIT rank officers, including the CCIT/DGIT in whose jt1risdiction the
case lies. The Principal CCIT(CCA) concerned may issue directions for pairing of CCslT/DGIT
for this purpose. In case of disagreement between the two CCIT/DGIT rank officers of the
collegium, the matter will be referred to the Principal CCIT(CCA) whose decision will be final. In
the event the Pr.CCIT(CCA) is one of the two officers of the collegium, in case of a disagreement
the decision of the Pr.CCIT(CCA) will be final.
4. The list of prosecutable offences under the Act specifying the approving authority is annexed
herewith.
5. This Circular shall come into effect immediately and shall apply to all the pending cases where
complaint is yet to be filed.
6. Hind version shall follow.

Encl: As above
(Mamta Bansal)
Director to the Government of lndia

Copy to:

1. P. S. to Finance Minister
2. P.S. to Revenue Secretary
3. The Chairman and all the Members, CBDT
4. All the Pr. Chief Commissioners/Chief Commissioners /Pr. Director Generals/ Director
Generals of lncome-tax
5. All the officers of the rank of Joint Secretary/CIT and above in the CBDT
6. CIT (Media and Technical Policy), CBDT
7. ADG (Systems)-4/ Web Manager for placing it on www.incometaxindia.gov.in
8. Addl. ClT, Data Base Cell- for placing it on www.irsofficersonline.gov.in
9. The Guard File

199
Director to the Government of India

Annexure
Section Nature of default Approving Authority
Contravention of order made Sanctioning Authority with the previous
under section 132(1) (Second Proviso) or administrative approval of the Collegium of
275A 132(3) two CCIT/DGTT rank officers
in case of search and seizure
Failure to afford necessary facility to Sanctioning Authority with the previous
authorized officer to inspect books of account administrativeapproval of the Collegium of
275B or other documents as required under section two CCIT/DGIT rank officers
132(1)(iib)
Removal, concealment, transfer or delivery Sanctioning Authority with the previous
276 of property to thwart tax recovery administrative approval of the Collegium of
two CICIT/DGJT rank officers
Failure to comply with provisions of Sanctioning Authority with the previous
276A section 178(1) and (3)- reg. company in administrative approval of the Collegium of
liquidation two CICIT/DGJT rank officers
Failure to comply with provisions or sections Sanctioning Authority with the previous
269UC, 269UE and 269UL reg. administrative approval of the Collegium of
276AB purchase of properties by Government two
CCIT/DGJT rank officers
Failure to pay to credit of Central Government
{i) tax deducted at source under Chapter
XVII-8, or
(ii) tax payable u/s 115-0(2) or second proviso -
to section 194B -

276B
(a) where non-payment of TDS exceeds Rs. Sanctioning Authority
25/- lakhs

(b) in other case Sanctioning Authority with the previous

administrative approval of the Collegium of
two CCIT/DGIT rank officers
Failure to pay to the credit of Central
Gov- ernment the tax collected a source -
under sec-tion 206C

(a) where non-payment of TCS exceeds Rs. Sanctioning Authority

276BB 25 lakhs

(b) in other case Sanctioning Authority with the previous

Administrative approval of the Collegium of
two CCIT/DGJT rank officers

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 HAND BOOK ON JUDICIAL MATTERS

Willful attempt to evade tax, penalty or

interest or under-reporting of” income- -

276C(1) (a)where tax which would have been evaded Sanctioning Authority
exceeds Rs 25 lakh

(b) in other case Sanctioning Authority with the previous

administrative approval of the Collegium of
two CCIT/DGIT rank officers

Willful attempt to evade payment of any tax,

penalty or interest - -

(a) where payment of any tax, penalty or interest Sanctioning Authority

276C(2) exceeds Rs. 25/- lakhs

(b) in other case Sanctioning Authority with the previous

administrative approval of the Collegium of
two CCIT/DGIT rank officers
Willful failure to furnish returns of fringe
benefits under section 115WD/l 15WH or -
return of income under section 139(1) or in
276CC response to notice under section 142(1)(i) or
section 148 or section 153A-

(a) where lax sought to be evaded exceeds Rs 25 Sanctioning Authority

Lakhs
(b) in other case Sanctioning Authority with the previous
administrative approval of the Collegium of
two CCIT/DGlT rank officers
276CCC Willful failure to furnish in due time return Sanctioning Authority with the previous ad-
of total income required to be furnished ministrative approval of the Collegium of two
by notice u/s 158BC(a) CCIT/DGlT rank officers

276D Willful failure to produce accounts and Sanctioning Authority with the previous ad-
documents under section 142(1) or to comply ministrative approval of the Collegium of two
with a notice under section 142(2A) CCIT/DGIT rank officers

277 Falsestatement in verification ordelivery of

-
false account or statement etc. -

(a) where tax which would have been evaded Sanctioning Authority
exceeds Rs 25 lakhs

(b) in other case Sanctioning Authority with the previous

administrative approval of the Collegium of
two CCIT/DGIT rank officers

201
277A Falsification of books of account or document, Sanctioning Authority with the previous
etc., to enable any other person to evade any tax, administrative approval of the Collegium of
penalty or interest chargeable/leviable under two CCIT/DGIT rank officers
the Act

278 Abetment of false return, account,

-
statement or declaration relating to any
income or fringe benefits chargeable to tax
-
(a) where tax, penally or interest which would Sanctioning Authority
have been
evaded exceeds Rs 25 lakhs

(b) in other case Sanctioning Authority with the previous

administrative approval of the Collegium of
two CCIT/DGIT rank officers

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 HAND BOOK ON JUDICIAL MATTERS

ANNEXURE D2 : CIRCULAR NO. 5/2020 [F. NO. 285/08/2014-IT (INV.V)/712],

DATED 23-01-2020 Section 276C, Read With Sections 276B, 276BB, 276CC Of The Income-Tax
Act, 1961 -Offences And Prosecution - Wilful Attempt To Evade Tax, Etc. - Procedure For Identification
And Processing Of Cases For Prosecution Under Direct Tax Laws - Amendment In Circular No.
24/2019 [F.No. 285/08/2014-It(Inv.V)/349], Dated 09-09-2019.

Circular No. 5/2020

F.No.285/08/2014-IT(Inv. V)/712
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Direct Taxes)

Room No. 501, 5th Floor, C-Block,

Dr. Shyama Prasad Mukherjee Civic Centre,
Minto Road, New Delhi -110002.
Dated: 23.01.2020

Subject: Clarification regarding Circular No. 24/2019 F. No. 285/08/2014-IT (Inv. V)/349 dated
09.09.2019-Reg.

1. The CBDT has issued a Circular No. 24/2019 dated 09.09.2019 (`the Circular’) for laying
down criteria for identification and processing of cases for launching prosecution under
the Income-tax Act, 1961. Clarifications have been requested with regard to the applicability
of para 2(iii) of the aforesaid Circular to the cases where penalty has not yet been confirmed
by the Income Tax Appellate Tribunal.

2. The matter has been examined by the CBDT and in partial modification of the Circular
No. 24/2019, it is hereby clarified that the prosecution may be launched in deserving
cases, including cases covered u/s 132/ 132A/ 133A, at any stage of the proceedings before
an Income-tax Authority with the prior approval of the Collegium of two CCIT/DG1T
rank officers as mentioned in para 3 of the Circular and the requirement of confirmation of
penalty by the Income Tax Appellate Tribunal shall not apply to such cases. Accordingly,
the existing para 2(iii) of the aforementioned Circular is modified as under:

“ iii. Offences u/s 276C (1): Willful attempt to evade tax, etc.

Cases where the amount sought to be evaded or tax on under-reported income is Rs. 25 lakhs or
below, shall not be processed for prosecution except with the previous administrative approval of
the Collegium of two CCIT/DGIT rank officers as mentioned in Para 3.

Further, prosecution under this section shall be launched ordinarily after the confirmation of the

203
order imposing penalty by the Income Tax Appellate Tribunal. Further, prosecution in other cases,
including cases covered u/s 132/132A/ 133A, may be launched at any stage of the proceedings
before an Income-tax Authority, with the previous approval of the Collegium of two CCIT/DGIT
rank officers as mentioned in para 3 of the Circular.”

3. Further, clarifications have also been requested regarding the applicability of the Circular
to cases, where the prosecution has already been launched before the date of issue of the
Circular. In this connection, it may be noted that in para 5 of the Circular, it is stated that
the Circular shall apply to all pending cases where complaint is yet to be filed. Therefore,
the Circular is applicable to only those cases where the prosecution complaint is to be filed
after the date of issuance of the Circular, i.e. 09.09.2019.

4. This clarification shall be read as part of the Board’s Circular No. 24/2019 F. No.
285/08/2014-IT (Inv. V)/349 dated 09.09.2019.

5. The Pr.CCsIT/Pr.DGsIT/CCSIT/DGsIT are requested to circulate the clarification among

all the officers of their region for compliance.

Deepak Tiwari
Commissioner of Income Tax (OSD)(INV.),CBDT

Copy to:

1. P.S. to Finance Minister

2. P.S. to Revenue Secretary

3. The Chairman and all the Members, CBDT

4. All the Pr. Chief Commissioners/Chief Commissioners /Pr. Director Generals/

Director Generals of Income-tax

5. All the officers of the rank of Joint Secretary/CIT and above in the CBDT

6. The CIT (Media & Technical Policy), CBDT

7. ADG (Systems)-4/ Web Manager for placing it on www.incometaxindia.gov.in

8. Addl. CIT, Data Base Cell for placing it on “www.irsofficersonline.gov.in”

9. The Guard File

(Deepak Tiwari)
Commissioner of Income Tax (OSD)(INV.), CBDT

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 HAND BOOK ON JUDICIAL MATTERS

ANNEXURE D3 : Instruction No. 6/2016 [F.No. 279/Misc./M-77/2011-ITJ]

DATED 07-09-2016 Guidelines for engagement of Special Public Prosecutors (SPPs) to
represent the Income Tax Department before Courts of Session and its subordinate Courts; revision of
their schedule of fees and related matters-instructions regarding.
Instruction No. 6 /2016

F.No. 279/Misc./M-77/2011-ITT
Government of India
Ministry of Finance
Department of Revenue
Central Board Direct Taxes
(ASLI Division)

New Delhi, the 7th September, 2016

Sub: Guidelines for engagement of Special Public Prosecutors (SPPs) to represent the Income Tax
Department before Courts of Session and its subordinate Courts; revision of their schedule of fees
and related matters — instructions regarding.

1. With a view to streamline the process of engagement of Special Public Prosecutors (SPPs) by
the Department to represent before Courts of Session and its subordinate Courts in prosecution
cases and in supersession of the existing Instructions of the CBDT on the subject matter in
general and Instruction No. 1880 dated. 30.01.1991 and Instruction No. 1925 dated 31.03.1995
in particular, the following instructions are issued herewith for compliance by all concerned:-
2. Procedure for engagement
The procedure for engagement of Special Public Prosecutors, renewal of their terms, requisite
qualifications and terms and conditions of their engagement shall be as follows:
2.1. Qualification of Special Public Prosecutors In order to be eligible for
engagement as an SPP, a person should:
a. be eligible to appear before the court as an Advocate and
b. have a minimum experience of 7 years as a Practicing Advocate, in criminal
matters. Adequate experience of handling trials relating to Direct Taxes is
desirable.
2.2. Procedure for engagement of Special Public Prosecutors

a. For the purpose of engagement, the CCIT shall call for applications in Proforma P1 either by
advertisement in local newspapers or from Bar Association. It should, however, be ensured
that the process of engagement is transparent and broad based,

b. A five-member Screening Committee headed by a Pr.C1T/Pr.DIT shall be formed by the

CCIT for the purpose of evaluation of proposals received. The Screening Committee shall
have representatives from DGIT (Inv.) and DGIT (Intelligence & Criminal Inv.). CIT (J)
shall also be part of the Screening Committee wherever possible. Officer looking after
prosecution matters may work as Member-Secretary of the Committee. The particulars of

205
 the applicants’ experience in handling criminal cases and their suitability to represent the
prosecution cases of the Department will be evaluated by the Committee. It shall have
interaction with the applicants to assess their suitability for the purpose of engagement. The
CCIT shall forward the proposal to the Board with his recommendation along with the report
of the Screening Committee and copies of applications received in Proforma Pl.

c. The First engagement of SPP shall normally be for a period of 18 months. Such engagement
will be renewable on receipt of recommendation of the CCIT along with annual performance
appraisal on completion of first 12 months of the engagement.

2.3. Renewal of the term of engagement performance review

2.3.1. The performance of the SPPs shall be reviewed by the jurisdictional Pr. CsIT/ Pr. DsIT/
CsIT/DsIT whose cases have been represented by the SPP, on an annual basis and a report in
Proforma-P2 shall be submitted to CIT (J)/CCIT before 31st May of the following year. The
CCIT shall submit the annual performance of the SPP (Proforma-P2) to the Board so as to
reach before 30th June of the year.

2.3.2. The CCIT shall submit a proposal for renewal of period of engagement to the Board at
least three months before the expiry of the term, if the performance of the SPP is found to be
satisfactory. The performance appraisal should be sent along with the proposal in ProformaP3.
The renewal of the term shalt normally be for a period of 3 years.

2.4. Allocation of cases to Special Public Prosecutors

The CCIT shall be the overall in charge of entire prosecution work on behalf of the Income Tax
Department in his Region. Work allocation amongst the SPPs in a Pr. CCIT Region shall be
done by the CCIT/DGIT. However, a copy of the list of SPPs and the cases assigned to them
shall also be forwarded to the CIT (J)/Addl CIT (J)/ Technical in the O/o the Pr. CCIT for
maintaining a centralized database for prosecution cases in the Region.

2.5. Termination of engagement/resignation/expiry of term

The engagement of SPP can be terminated through written intimation by either side without
assigning any reason. The CCIT is authorized to act on behalf of the department for the purpose.
On expiry of the term or termination or resignation, the SPP shall immediately handover the
briefs and other related papers to the Pr. CIT/Pr. DIT/CIT/ DIT concerned or the other SPPs
nominated by the CCIT for the purpose and the pending bills of the SPP should be settled within
three months of the end of the term.

2.6. Duties of the Special Public Prosecutors Duties of the Special Public Prosecutors shall
include:

1. To represent the Department personally and effectively in conduct of trial for prosecution
matters in the Trial courts/ Courts of Session.
2. To give opinion when it is sought about the feasibility of filing a prosecution case or
any other prosecution matter.

206
 HAND BOOK ON JUDICIAL MATTERS

3. To draft complaints and assist in compliance of the technical requirements.

4. To intimate criminal complaint number to the officer concerned/ complainant.

5. To intimate the Assessing Officer/ officer concerned about the outcome of each hearing
and the date of next hearing, immediately after the hearing.

6. To assist the witnesses of the Department before their evidences and guide them in
facing cross examination. The SPP should prepare each witness and its statement in
such a manner that there is consistency in the stand of the Department.

7. To apply for the certified copy within 3 days of the judgement and deliver it to the Pr.
CIT/Pr. DIT/CIT/DIT concerned within 10 days (excluding the time taken by the Courts).

8. When a case represented by him/her is decided against the Department., to apply for
certified copy of the judgment within three working days of pronouncement and give
his opinion regarding the advisability of filing an appeal against such a decision within
seven days of taking delivery. In other cases, also the same time limits shall be applicable,
though opinion will not be required.

9. To draft revision petition, if required or to draft reply to the revision petition, if preferred
by the accused.

10. To represent the Department in revision matters before the Court of Session.

11. To furnish a statement of the cases handled to the Pr. CIT/Pr, DIT/CIT/D1T concerned,
by 30’h April of every year, indicating the performance in preceding financial year in
‘Pr.

12. To perform such other duties of legal nature as may be assigned to him/her by the
Department.

2.7. Assistance to Special Public Prosecutors by the Department

1. The Investigation or Assessing Officer having jurisdiction over the case or the Directorate
of Criminal Investigation (DCI), shall provide all assistance to the SPPs such as providing
original records; producing the Departmental Officers as witness, etc.

2. The SPP shall be kept informed of the decisions of Appellate Authorities having bearing
on prosecution cases.

3. Schedule of Fees, Allowances and Terms of Payment:

3.1. The SPPs will be engaged in accordance with the revised schedule of fees and related
terms & conditions applicable to them as given below:

207
Sr.No Activity Fees Payable
Rs. 2,000/- per day per case (there s h a
1. Effective Hearing l l be no ceiling per day, irrespective of
the number of cases heard on a day)
Rs. 500/- per day per case (subject to the
2. Non-effective Hearing payment for maximum 5 noneffective
hearings in a case/ connected cases).

3. Drafting Complaints’ Rs. 2,000/- per complaint

4. Drafting Revisions, Replies, Written

Arguments, Affidavits, etc.’ Rs. 1,000/- per case

Rs. 750/- per conference limited

Conference fees (With Assessing Officer or to payment for a maximum of 5
5.
above) conferences in a case/connected eases

6. Clerkage 10% of fee at Si. No. 1 to 4 above.

Opinion fees (written opinion in

cases/matters, other than those where adverse
7. orders have been passed by the Court in the Rs. 2,000/- per case/connected cases
cases represented by the SPP)

I. A substantial and effective hearing is one in which either one or both the parties involved
in a case are heard by the Court. If the case is mentioned and adjourned or only directions
are given or only judgement is delivered by the Court, it would not constitute an effective
hearing.

II. If substantially identical complaints, affidavits etc. are drafted in connected cases (as
defined in Para 3.2), drafting fees of Rs. 2,001/- will be paid for the main case only. For
other cases drafting fees of Rs. 750/- per case will be paid.

III. If substantially identical Revisions, Replies, Written Arguments etc. are drafted in
connected cases, drafting fees of Rs. 1,000/- will be paid for the main case only. For
other cases drafting fees of Rs. 5001- per case will be paid.

3.2. Appearance fee in connected cases

When more than one complaint involves substantially identical issues, where the
arguments are heard in the main case and the other cases are decided accordingly, such
complaint in which the arguments are heard shall be treated as the main case and the
others as connected cases irrespective of the fact whether all the cases are heard together
or not. The SPP shall be paid appearance fee as per para 3.1 above in the main case and
only Rs. 750/- in each of the connected cases for every effective hearing.

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 HAND BOOK ON JUDICIAL MATTERS

3.3. Out of pocket expenses

The amount required for court fees at the time of filing a case and other miscellaneous
expenses including for obtaining certified copies of judgement/order shall be reimbursed
to the SPP on receipt of the claim.

3.4. For matters outside Headquarters

(The headquarters of the SPP shall be the station where the Trial Court for which the SPP
is engaged is stationed)

3.4.1. When the SPP is required to go out of headquarters in connection with any
litigation or for conference outside the headquarters, he will be entitled to a daily fee of
Rs. 3,000/- per day for the days of his absence from the headquarters including the days
of departure from, intervening holidays and arrival back to the headquarters. However,
no fee will be paid for the day of departure if he leaves headquarters after court hours
and for the date of arrival if he arrives at the headquarters before the court hours. The
daily fee will be in addition to the normal appearance fee as prescribed in para 3.1 above.

3.4.2. Travel/ Hotel Expenses: In addition to the daily fee, the SPP will be entitled for
travel expenses by train in First Class/AC 2 Tier. Road mileage for the journey actually
performed by Bus/Taxi/Own Car will be paid as per Mileage Allowance in the T.A.
Rules applicable to Central Government Servants at the rate admissible to officers
drawing grade pay of Rs. 6,600/- He will also be paid a lump-sum amount of Rs. 750/-
as conveyance charges for performing local journey while outside the headquarters. He
will also be entitled to actual expenses for staying in hotel, subject to maximum of
Rs.3,000/- per day.

3.5. Late submission of certified copies of judgement

If the certified copy of the judgement is not delivered to the office concerned within 10
days (excluding the time taken by the Courts) from the date of judgement, 20% of the
hearing fees payable to the SPP shall be deducted.

3.6. Procedure for submission and payment of bills to Special Public Prosecutors

The SPPs should submit professional bills in proforma ‘P4’ of this Instruction by 10th of
every month. The bills should enclose copy of documents drafted, in case of claim for
drafting fee, and minutes/gist of proceedings or a copy of order/judgement where it is
necessary in case of claim for appearance fee. The bills shall be scrutinized within 30
days of receipt and deficiencies or excess claim, if any., shall be communicated to the
SPP within a week of such scrutiny. The scrutiny of bills should not be kept pending due
to non-availability of funds.

After passage., the bill should be arranged in seriatim of receipt, for payment. The cheque
should be sent to the SPP concerned giving particulars of bills covered by the payment.

209
4. Right to Private Practice

i. The SPP will have the right to private practice, but he shall not appear in the prosecution
matters against the Department in any court or be associated with any assessee in respect
of any offence under the Direct Taxes laws in any manner.

ii. If the SPP happens to be a partner of any firm of lawyers or solicitors, it will be incumbent
on the firm not to take up any prosecution case against the Department in any court.

5. The CCIT referred to in this Instruction means the Pr. Chief Commissioner of Income-tax
Chief Commissioner of Income-tax in charge of Prosecution matters in the CCA Region.

6. The Prosecution Counsels currently engaged by the Department on the basis of Instruction
No. 1925 will henceforth be called as Special Public Prosecutors.

7. These guidelines and the revised schedule of fee and allowances shall come into effect from
07.09.2016.

8. The SPPs will be paid fee at the old rates in respect of their appearance and other work done
by them on or before 06.09.2016 and at the revised rates in respect of the work done by them
on or after 07.09.2016.

9. This issues with the concurrence of Ministry of Law and Justice vide their I.D. No.
3.1,11019/2/2016-Judl, Part (1) dated 24.06.2016 and the Department of Expenditure I.D. No.
9 (4)/2012-E. II(B)-Pt dated 29.08.2016.

(D.S. Rathi)
DCIT(OS D)(ITJ)
CBDT

Copy to:

1. The Chairperson, Members and other officers in CBDT of the rank or Under
Secretary and above.
2. The Comptroller and Auditor General of India
3. Official Language section for Hindi translation

(D.S. Rathi)
DCIT(OSD)(C.B.D.T.)

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 HAND BOOK ON JUDICIAL MATTERS

ANNEXURE D4: [F.No. 279/Misc./M-77/2011-ITJ] DATED 18-10-2016

Modifications to the Instruction No. 6/2016 for engagement of Special Public Prosecutors (SPPs)
to represent the Income Tax Department before Courts of Session and its subordinate courts-
regarding.

F. No. 279/Misc/M-77/2011-ITJ
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(A&J Division)

New Delhi, the 18th October, 2016

To,

All Principal Chief Commissioners of Income Tax. Madam/ Sir,

Sub: - Modifications to the Instruction No. 6/2016 for engagement of Special Public Prosecutors
(SPPs) to represent the Income Tax Department before Courts of Session and its subordinate
courts- Reg.

Ref: - CBDT Instruction No. 6/2016 dated 7th September 2016.

Kindly refer to the above.

1. Instruction No. 6/2016 of CBDT (hereinafter “Instruction”) has revised the guidelines for
engagement of Special Public Prosecutors(SPPs) to represent the Income Tax Department before
various courts in supersession of the earlier Instruction No. 1880/ 1991 and Instruction No. 1925/
1995 of the CBDT on the subject. Suggestions have been received from various authorities for
modifications to the Instruction.

2. In this regard, after considering the suggestions received, the following modifications are hereby
made to the Part B (Bill for appearance etc.,) of the Proforma ‘P4’ of the Instruction, by adding the
rows 7, 8 & 9.

The Part B of the Proforma `P4’ of the Instruction after modification is as follows:
Part B (Bill for appearance etc.), as applicable

(Amount in Rs.)
Substantial and effective hearing (Whether Connected case - Yes/
No)

Non-effective hearing

Conference fees

Clerkage @10%

211
 Out of pocket expenses (particulars to be given)

For performing duties outside headquarters (as per para 3.4)

Date of Judgement.
Date of furnishing the certified copy of the judgement to the office concerned.

Deduct 20% of (1. + 2.) above, if date at (8.) is more than 10 days (excluding
the time taken by the courts) from the date at (7.)
Total

3. These modifications may be brought to the notice of all the officers concerned.

4. Hindi version of this will follow.

(K. Vamsi Krishna)
ACIT (OSD) (ITJ-II)
Tel: 26882637

Copy to:

i. The Chairman, Members and other officers in CBDT of the rank of Under Secretary
and above
ii. OSD to Revenue Secretary
iii. The Comptroller and Auditor General of India
iv. Pr. DGIT (Vigilance), New Delhi
v. The Pr. DGIT (Systems), ARA Centre, Jhandewalan Extension, New Delhi
vi. ADG (PR, PP & OL), Mayur Bhawan, New Delhi for printing in the Tax Bulletin and
for circulation.
vii. The Joint Secretary & Legal Advisor, Ministry of Law & Justice, New Delhi.
viii. The ADG-4(Systems) for uploading on ITD Website.
ix. Database cell for uploading on www.irsofficersonline.gov.in.
x. ITCC (3 copies)
xi. Official Language section for Hindi translation.

(K. Vamsi Krishna)

ACIT (OSD)(ITJ-II)Tel: 26882637

212
 HAND BOOK ON JUDICIAL MATTERS

Annexure E-1: Proforma Format for Presentation of Caveat before

NCLT.
CAVEAT IN THE

NATIONAL COMPANY LAW APPELLATE TRIBUNAL,

NEW DELHI

Caveat No. ………………… of …...…………………

In the matter of appeal against order dated ………………. Passed by
………………………………………………………………………... expected to be instituted by
…………………………………………………………. (By any person)

Against

…………………………………………………………………… (Applicant-Caveator)

To,

The Registrar
National Company Law Appellate Tribunal
3rd Floor, Pt. Deen Dayal Antyodaya Bhawan,
C.G.O. Complex, Lodhi Road, New Delhi - 110003.

Let no substantive order (here state in detail the precise nature of the order apprehended) ………
……………………………………………………………………………………………………
…………………………………………………………………... be made in the above matter
without notice to the undersigned.

Name & address of the

Caveator & his counsel, if any

Filed on……………………

By order of the Hon’ble Chairperson

-sd/-
Registrar

213
Annexure E-2: Form B Proof of Claim by Operational Creditors except
Workmen and Employees.
PROOF OF CLAIM BY OPERATIONAL CREDITORS EXCEPT WORKMEN AND
EMPLOYEES

(Under Regulation 16 of the Insolvency and Bankruptcy Board of India (Voluntary

Liquidation Process) Regulations, 2017)

[Date]

To
The Liquidator
[Name of the Liquidator]
[Address as set out in the public announcement]

From

[Name and address of the operational creditor]

Subject: Submission of proof of claim in respect of the voluntary liquidation of [name

of corporate person] under the Insolvency and Bankruptcy Code, 2016.

Madam/Sir,

[Name of the operational creditor] hereby submits this proof of claim in respect of the
voluntary liquidation of [name of corporate person]. The details for the same are set out
below:

NAME OF OPERATIONAL CREDITOR

(IF AN INCORPORATED BODY PROVIDE IDENTIFICATION

1
NUMBER AND PROOF OF INCORPORATION, IF A PARTNERSHIP
OR INDIVIDUAL PROVIDE IDENTIFICATION RECORDS* OF ALL
THE PARTNERS OR THE INDIVIDUAL)

2 ADDRESS OF OPERATIONAL CREDITOR FOR CORRESPONDENCE

TOTAL AMOUNT OF CLAIM, INCLUDING ANY INTEREST, AS AT

3 VOLUNTARY LIQUIDATION PROCESS COMMENCEMENT DATE
AND DETAILS OF NATURE OF CLAIM

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 HAND BOOK ON JUDICIAL MATTERS

DETAILS OF ANY DISPUTE AS WELL AS THE RECORD OF

4
PENDENCY OF SUIT OR ARBITRATION PROCEEDINGS

5 DETAILS OF HOW AND WHEN DEBT INCURRED

DETAILS OF ANY MUTUAL CREDIT, MUTUAL DEBTS, OR OTHER

MUTUAL DEALINGS BETWEEN THE CORPORATE PERSON AND
6 THE OPERATIONAL CREDITOR WHICH MAY BE SET-OFF
AGAINST THE CLAIM

DETAILS OF ANY RETENTION OF TITLE IN RESPECT OF GOODS

OR PROPERTIES TO WHICH THE DEBT REFERS OR ANY OTHER
7 SECURITY

DETAILS OF ANY ASSIGNMENT OR TRANSFER OF DEBT IN HIS

8 FAVOUR

DETAILS OF THE BANK ACCOUNT TO WHICH THE OPERATIONAL

CREDITOR’S SHARE OF THE PROCEEDS OF LIQUIDATION CAN
9 BE TRANSFERRED

LIST OUT AND ATTACH THE DOCUMENTS RELIED ON IN

10
SUPPORT OF THE CLAIM.

Signature of operational creditor or person authorised to act on his behalf

(Please enclose the authority if this is being submitted on behalf of the operational
creditor)

Name in BLOCK LETTERS

Position with or in relation to creditor

Address of person signing

*PAN, Passport, AADHAAR Card or the identity card issued by the Election Commission

215
of India.

AFFIDAVIT

I, [name of deponent], currently residing at [address of deponent], do solemnly affirm and state as
follows:

1. The above named corporate person was, at liquidation commencement date, that is, the
__________ day of __________ 20______ and still is, justly and truly indebted to me
[or to me and [insert name of co-partners], my co-partners in trade, or, as the case may
be] for a sum of Rs. __________ for _____ [please state consideration].

2. In respect of my claim of the said sum or any part thereof, I have relied on the documents
specified below:

[Please list out the documents relied on as evidence of debt.]

3. The said documents are true, valid and genuine to the best of my knowledge, information
and belief.

4. In respect of the said sum or any part thereof, I have not, nor have my partners or any
of them, nor has any person, by my/our order, to my/our knowledge or belief, for my/
our use, had or received any manner of satisfaction or security whatsoever, save and
except the following:

[Please state details of any mutual credit, mutual debts, or other mutual dealings between the
corporate person and the operational creditor which may be set-off against the claim.]

Solemnly, affirmed at _____________________ on _________________ day, the __________

day of__________ 20_____

Before me,

Notary / Oath Commissioner

Deponent’s signature

VERIFICATION

I, the Deponent hereinabove, do hereby verify and affirm that the contents of para ___ to __of this
affidavit are true and correct to my knowledge and belief. Nothing is false and nothing material has
been concealed therefrom.

Verified at ________ on this ________ day of ________ 201_____

Deponent’s signature

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Annexure E-3: Form C-Proof of Claim by Financial Creditors to be

filed before NCLT.

PROOF OF CLAIM BY FINANCIAL CREDITORS

(Under Regulation 17 of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation
Process) Regulations, 2017)

[Date]

To
The Liquidator
[Name of the Liquidator]
[Address as set out in the public announcement]

From
[Name and address of the registered office and principal office of the financial creditor]

Subject: Submission of proof of claim in respect of the voluntary liquidation of [name of corporate
person] under the Insolvency and Bankruptcy Code, 2016.

Madam/Sir,

[Name of the financial creditor] hereby submits this proof of claim in respect of the voluntary
liquidation of [name of corporate person]. The details for the same are set out below:

NAME OF FINANCIAL CREDITOR

(IF AN INCORPORATED BODY PROVIDE IDENTIFICATION NUMBER AND
1 PROOF OF INCORPORATION, IF A PARTNERSHIP OR INDIVIDUAL PROVIDE
IDENTIFICATION RECORDS* OF ALL THE PARTNERS OR THE INDIVIDUAL)

2 ADDRESS AND EMAIL OF FINANCIAL CREDITOR FOR

CORRESPONDENCE.

TOTAL AMOUNT OF CLAIM, INCLUDING ANY INTEREST, AS AT THE

3 LIQUIDATIONCOMMENCEMENT DATE AND DETAILS OF NATURE OF
CLAIM (WHETHER TERMLOAN, SECURED, UNSECURED)

DETAILS OF ANY ORDER OF A COURT OF TRIBUNAL THAT HAS

4 ADJUDICATED ON THE NON-PAYMENT OF DEBT

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 5 DETAILS OF HOW AND WHEN DEBT INCURRED

DETAILS OF ANY MUTUAL CREDIT, MUTUAL DEBTS, OR OTHER

6 MUTUAL DEALINGS BETWEEN THE CORPORATE PERSON AND THE
FINANCIAL CREDITOR WHICH MAY BE SET-OFF AGAINST THE CLAIM

DETAILS OF ANY SECURITY HELD, THE VALUE OF THE SECURITY, AND

7 THE DATE IT WAS GIVEN

8 DETAILS OF ANY ASSIGNMENT OR TRANSFER OF DEBT IN HIS FAVOUR

DETAILS OF THE BANK ACCOUNT TO WHICH THE FINANCIAL

9 CREDITOR’S SHARE
OF THE PROCEEDS OF LIQUIDATION CAN BE TRANSFERRED

LIST OUT AND ATTACH THE DOCUMENTS BY REFERENCE TO WHICH

10 THE DEBT CAN BE SUBSTANTIATED AND IN SUPPORT OF THE CLAIM.

Signature of financial creditor or person authorised to act on his behalf

(please enclose the authority if this is being submitted on behalf a financial creditor)

Name in BLOCK LETTERS

Position with or in relation to creditor

Address of person signing

*PAN, Passport, AADHAAR Card or the identity card issued by the Election Commission of India.

AFFIDAVIT

I, [name of deponent], currently residing at [address of deponent], do solemnly affirm and state as
follows:

5. The above named corporate person was, at the voluntary liquidation commencement
date, that is, the __________ day of __________ 20____ and still is, justly and truly
indebted to me [or to me and [insert name of co-partners], my co-partners in trade, or,
as the case may be] for a sum of Rs. __________ for ……..[please state consideration].

6. In respect of my claim of the said sum or any part thereof, I have relied on the documents
specified below:

[Please list the documents relied on as evidence of debt and of non-payment.].

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7. The said documents are true, valid and genuine to the best of my knowledge, information
and belief.

8. In respect of the said sum or any part thereof, I have not, nor have my partners or any of
them, nor has any person, by my/our order, to my/our knowledge or belief, for my/ our
use, had or received any manner of satisfaction or security whatsoever, save and except
the following:

[Please state details of any mutual credit, mutual debts, or other mutual dealings between the
corporate person and the financial creditor which may be set-off against the claim.]

Solemnly, affirmed at _____________________ on _________________ day, the __________day

of__________ 20_____

Before me,
Notary / Oath Commissioner.

Deponent’s signature.

VERIFICATION

I, the Deponent hereinabove, do hereby verify and affirm that the contents of para ___ to __of this
affidavit are true and correct to my knowledge and belief. Nothing is false and nothing material
has been concealed there from.

Verified at ________ on this ________ day of ________ 201___.

Deponent’s signature.

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ANNEXURE F1 : Standard operating procedure (SOP) on filing of Appeals/
Special leave petition (SLPs) by the Income Tax Department in the Supreme Court (SC)
and related matters.
Instruction No. 2/2022

F.No.279/Misc./M-72/2022-ITJ
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

To

All the Principal Chief Commissioners/Chief Commissioners of Income Tax

All the Principal Director Generals/Director Generals of Income Tax

Subject:- Standard operating procedure on filing of Appeals/Special leave petition (SLPs) by the
Income Tax Department in the Supreme Court and related matters: instruction regarding.

Sir/Madam,

1. Seveval instructions and directions have beeen issued by CBDT form time to time emphasizing
upon the need for timely filing of appeals/SLPs in the Supreme Court and proper conduct of
litigation. However, a number of SLPs are being filed with inordinate delay. In the wake of the
Hon’ble Supreme Court’s directions to adopt ICT (Information and Communication Technology)
initiatives to streamline, monitor and provide seamless integration of all stages in government
revenue litigation across the board, a LIMBS Committee and a High- Powered Committee were
constituted. The High- Powered Committee has suggested to the board for changes in SLP proposal
initiation, timely sending of SLP proposal to DoLA and use of single file instead of initiating fresh
files through e-office by different authorities to cut down the delay. The High Powered Committee
has advised the Board to work towards a “Zero Delay Regime” in the matter of filing of appeals/
SLPs.

2. In view of the above and with a view to ensure filing of appeals/SLPs within the period
prescribed, following instructions are issued in supersession of all earlier instructions on the
subject.

Time Lines for processing of proposals for filing SLPs

3. With a view to ensure timely filing of appeals/SLPs in the Supreme Court, the timelines for
processing proposals at different levels are modified and enclosed as per Annexure-A, for strict
adherence by all concerned.

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3.1 . Responsibility to ensure timely processing of proposals – The Pr.CCIT/

CCIT and Pr.CIT/ CIT concernedsh all ensure timely processing of proposals and their
submission to the Directorate of L&R as per the timelines given in Annexure A. Any
deviation from the timelines will have to be duly explained and delay without proper
explanation or due to negligence will be viewed adversely.

4.Institutional mechanism for processing proposals for appeals/ SLPs to the Supreme
Court:

i. The Pr. CCIT/CCIT having jurisdiction over the station having Bench of the High Court,
shall ensure a proper institutional mechanism for timely dissemination of downloaded copy/
certified copy of High Court’s order/judgment, whichever is available first, to Pr.CsIT/CsIT
having jurisdiction over respective cases.

ii. The Pr. CCIT/CCIT, shall set-up a High Court Cell at each station within their jurisdiction
where a Bench of the High Court is situated. Such cell shall be headed by a DCIT/ ACIT/ITO
(as decided by the Pr.CCIT/CCIT, depending upon availability of manpower and the work
load) with adequate number of Inspectors and other support staff and appropriate
infrastructural facilities to make it properly functional. Appropriate monitoring and
supervision mechanism of the High Court Cell shall be prescribed by the Pr. CCIT/CCIT
under intimation to the Pr. DGIT (L&R).

iii. The High Court Cell shall obtain particulars of cases finally heard from Standing Counsels at
the end of each working day and intimate particulars of the cases, such as the name of the
case, Assessment Year, Name of the Standing Counsel etc. with a summary of the proceedings
to the Pr. CIT/CIT concerned without any delay. For outstation Pr. CsIT/ CsIT, such
information shall be sent through e-mail/Fax.

iv. The Cell shall also track orders/judgments pronounced on daily basis. Such information
should be compiled from the daily cause list, Senior Standing Counsels and from Court
room/registry of the High Court. The information so compiled should be transmitted to
Pr. CIT/CIT concerned immediately on a regular basis through personal delivery/e- mail/fax.

v. The Administrative Pr. CsIT/CsIT shall also set up proper institutional mechanism in their
respective charges to access the website of the High Court to download orders/ Judgments
relating to their charge as soon as these are uploaded. The orders can be downloaded from
websites such as indiancourts.nic.in or www.courtnic.nic.in where link of all High Courts is
provided. An officer of the charge should this purpose. Such officer shall access the website
everyday and keep a log of the same. The nominated officer shall also maintain regular co-
ordination with the High Court Cell(s) dealing with the cases of the charge.

Processing of proposals for appeal/SLP on receipt of the order of High Court

5. The following important issues need to be noted in processing proposals for SLPs for due
compliance:

i. For filing SLP, period of limitation begins from the date of judgment/order of the High
Court.
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 ii. In case an application for grant of certificate of fitness u/s 261 of the Income-tax Act,
1961 is made, the limitation to file Civil Appeal/SLP is 60 days from disposal of the
application.

iii. The proposal for SLP against the High Court’s order shall be initiated on the basis of an
ordinary copy/ the copy of the order downloaded from the website (as referred to above)
of the Court without waiting for the certified copy of the order. The certified copy of the
order shall be sent separately as soon as it is received to determine the exact date of
limitation. The timeline for processing the SLP proposal at the level of Pr.CIT concerned,
shall not in any case, exceed 20 days from the date of judgment.

iv. In order to avoid delay, the Pr.CCIT/Pr.CsIT should consider the SLP proposals as per
their judicial appreciation of the impugned order/judgment of the High Court and need
not seek legal opinion in every case from the Standing Counsels as the Ministry of Law
& Justice and Ld. Law officers of the Government of India are consulted in appropriate
cases before filing the SLPs.

v. The process of filing SLP proposal should invariably be initiated only at the level of
jurisdictional Principal Commissioner/ Commissioner in the field. Pr.CIT/CIT is the
custodian of all the records while litigation in High Court is on and is responsible for
initiating the process for filing of SLP.

vi. After due consideration, the proposal for SLP must be sent by the Pr. CsIT/CsIT to the
Directorate of Income-tax (L&R) within the time-limits prescribed in Annexure-A. In
case of delay, detailed justification should be furnished along with the corrective action
taken to prevent recurrence of delay in future.

vii. The revised Proforma B, enclosed as Annexure B to this instruction, duly filled-in along
with one set of required documents annexed to it, should be sent with the proposal. The
proposal along with soft copy of all annexures is to be sent to the Directorate of L&R
necessarily through email / e-office.

SLP filed by the assesse

6. If the Hon’ble Supreme Court directs issue of notice on the SLP filed by the assessee, Registry
of the Supreme Court serves the notice along with the Special Leave Petition to the respondent
Pr.CIT/CIT or other respondent officer directly. The PLCIT/CIT or such other respondent officer,
through his Pr.CIT/CIT, should submit the following documents to the Directorate of Income-tax
(L&R) for entering appearance before the Hon’ble Court and for filing counter affidavit:

i. A copy of the notice along with the paper book served by the Registry.

ii. Para wise comments on the Special Leave Petition placed in the paper book.

iii. A Vakalatnama duly executed in favour of Assistant Government Advocate, Central

Agency Section, Ministry of Law.

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The aforesaid documents should be submitted strictly within three weeks from the receipt
of the notice to the Directorates of Legal and Research.

Processing of SLP proposals in the Directorate of L & R

7. The Pr. DGIT (L&R) shall ensure the following:

i. After due consideration of the proposal within the Directorate of L&R, the proposal is
sent to the Ministry of Law within 20 days of the receipt, if approved by the Board and;

ii. Time-lines mentioned in the Annexure-A to this Instruction for timely filing of SLPs are
adhered to strictly.

Compliance of directions of Hon’ble Supreme Court

8. Directions issued by the Hon’ble Supreme Court must be complied with, within the time
allowed. The Pr.CIT/CIT shall personally ensure compliance of directions relating to Dasti service,
filing of counter or rejoinder affidavit or other specific directions, to avoid adverse observations.

Quality of SLP Proposals

9.1. The quality of proposal sent by the Pr.CIT/CIT is extremely important for efficient and effective
litigation management in the Department. The Pr.CIT/CIT must ensure that the complete proforma
B along with all requisite documents is submitted along with the SLP proposal. Any deficiency in
this regard causes avoidable delays in processing of the proposals.

9.2. It must also be noted that appeal to the High Court and the Supreme Court can be filed only on
‘Substantial Questions of Law’. It has, however, been observed that many SLP proposals involve
only ‘questions of fact’. The CCsIT shall ensure that the proposals for SLPs are well examined
and forwarded to the Directorate of L&R only in those cases where ‘substantial questions of law’
are involved.

9.3. All High Court orders which are against the revenue but found acceptable by the Pr.
Commissioner/Commissioner will be put up to the jurisdictional Chief Commissioner within 15
days of pronouncement of the judgment for his concurrence. In case, the CCIT directs submission
of SLP proposal in a case, the same shall be done within time frame prescribed in Annexure A.

Assistance to Law officers/Appearing Counsels

10. The Pr. CIT/CIT concerned should ensure that the Law Officer/Appearing Counsel representing
the case is briefed properly before the hearing. Whenever, Law officer/Appearing Counsel seek
instructions/clarifications in a case, the same must be provided by the Pr.CIT/CIT on priority.

Monitoring Compliance of this Instruction

11.1. The Pr. DGIT (L&R) shall monitor the compliance of time lines for submission of SLP
proposals and send a quarter ly report to the Member (A&J), CBDT giving list of cases where the
proposal for filing SLP was received beyond the prescribed time lines. Due dates of the quarterly

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reports are – 15th July, 15th October, 15th January and 15th April. The report shall indicate the
Pr.CCIT/CCIT region, the Pr.CIT/CIT charge and number of days of delay along with the action
taken and/or proposed to be taken.

11.2. In the quarterly report, the Pr. DGIT (L&R) shall also report cases of delays beyond the
prescribed time lines for

i. Sending the SLP to Ministry of Law;

ii. Vetting of draft SLP; and

iii. Filing of SLP by the CAS after vetting.

Reasons of delay in such matters and the steps taken/proposed to be taken shall also be mentioned
in the report. Delays, if any, on the part of counsels and CAS etc. shall be brought out clearly to be
taken up with the Law Ministry appropriately.

12. This Instruction shall apply in respect of the orders/judgments of High Courts pronounced on
or after the date of issue of this Instruction. Necessary concurrence of Ministry of Law & Justice
has been obtained.

Note: Reference to Pr.CIT/CIT/Pr.CCIT/CCIT in this instruction includes Pr.DIT/DIT/Pr.DGIT/

DGIT wher ever applicable.
Yours faithfully,
(Tanay Sharma)
DCIT(OSD)(ITJ)-I, CBDT

Copy to:

1. The Chairman, Members and all other officers in CBDT of the rank of Under Secretary
and above.

2. The Comptroller and Auditor General of India.

3. DIT(Vigilance), Mayur Bhawan, New Delhi.

4. The Joint Secretary & Legal Advisor, Ministry of Law & Justice, New Delhi.

5. All Directors of Income-tax, New Delhi and DGIT(NADT), Nagpur

6. Database call for uploading on wwww.irsofficensonline.gov.in

(Tanay Sharma)
DCIT(OSD)(ITJ)-I, CBDT

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ANNEXURE – A

Timelines for filing SLP to Supreme Court

The Special Leave Petition against the judgment of High Court has to be filed in Supreme Court
within 90 days of date of pronouncement of the order. The timeline will start from the date of
judgment. Timelines for various stages of the process are given below:

I. TimeLine to be observed in the office of the Pr.CIT/CIT:

++ : This activity should begin as soon as Pr.CIT/CIT takes a view to propose SLP.
Timeline to he observed in the Directorate of Income Tax (L&R)

Sr. No. of Days Cumulative Days

No
1. Directorate of Income Tax (L&R) 16 36

2. Member (A&J) 3 39

3. Transit to MOL 1 40

V. Time line to be observed in the Ministry of Law/Central Agency Section (Internal breakup
of the timelines may be decided by DoLA/Id. ASG)

Sr. No. of Cumulative Days

No Days

1 Analysis by DoLA, Opinion of Law officer and drafting of 30 70

SLP
2 Transit to the Directorate 1 71

3 Vetting in Directorate 7 78

4 Transit back to CAS 1 79

5 Paper book preparation, Affidavit/AOR, Filing of SLP 6 85

The observance of timeline in the MOL and CAS will be monitored by the Ministry of Law
other than step at Si.No. 3 above which relates to the Directorate (L&R).

Revised Proforma for submission of proposal to file SLP PROFORMA: B

1. a. ITA No./WP No. of the Judgment

b. Unique 16 digit ‘Case Number Record’ (CNR) No.

c. High Court LIMBS ID

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Whether there are multiple appeals involved in the order of High Court.YIN If yes: –

2. a. No. of appeals involved in the composite order of High Court

b. Whether SLP is proposed against all the appeals involved Y/N

c. If no, reason for not proposing SLP against all the appeals involved

3. i. Name of the assessee

ii. Address of the assessee

4. a. Assessment Year’

b. Income declared by the assessee in ITR

c. Income assessed u/s 143(3)/147/153(A)/153C

5. a. Aggregate of Tax effect on issues to be disputed.

b. Tax effect Issue wise involved in the SLP proposal.

Is the Tax effect below the limits prescribed in instruction on monetary limits for filling SLP?

6. If yes, please specify the exception provided in the instruction in which the proposal
is covered.

a. Details of exception clause

b. In case of Audit Objection, whether the same has been accepted or not by the
department (including relevant documents)

c. Confirmation that CBDT Instruction No. 07/2017 related to Revenue Audit Objection
hasbeen adhered

7. i. Date of High Court order

ii. Date of Limitation for filing SLP

iii. If proposal to Directorate of Income-tax (L&R) is sent beyond 20 days from the date
of order, reasons for delay.

8. a. Are the following documents, in one set of hard copy, enclosed

i. Certified copy of High Court’s judgment /order Y/N

ii. Copy of memo of appeal u/s 260A filed before the High Court Y/N

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iii. Copy of order of ITAT YIN

iv. Copy of the order of CIT( A) YIN

v. Copy of the Assessment Order/s YIN

vi. In case of reopening u/s 148 copy of notice, copy of reason recorded and approval of
PCIT,objection filed by assessee and reply of the objection.

vii. if, any documents are relied upon/referred into for proposing SLP, copy of the same

viii. Any other relevant documents

b. The soft copy of the documents is sent on e-office as well as through email. Y/N

9. (i) Facts of the case in brief (in about 300 words: In the separate sheet.

10. (ii). Information regarding SQsL before the High Court.

Remarks, if any
Decision of High Whether the SQL
Substantial Question Relevant Para of the Supreme
Sr. Court on the SQL is sought to be
of Law(SQL) raised the High Court Court
No. (held in favour or agitated be- fore
before order (Yes/No)
High Court Revenue) the

iii. Whether all the question of law (QoL) raised before High Court have been answered
in the order of High Court. If no proposed action for the same.

iv. Whether the issue of perversity has been taken as a ground before ITAT/HC. If yes
please indicate the relevant para of the order of CIT(A)/ITAT/HC.

v. If the disputed issue under consideration is involved in other assessment years, then
assessment year wise status of litigation in all such appeals.

11. The ‘Substantial Questions of Law to be proposed in the SLP’

12. a. If the judgment, to be contested, has relied upon another judgment, then a copy of
there lied upon judgment & its present status of litigation, if ascertained.

b. Has the relied upon judgment been accepted on merits or has not been accepted but
not contested further on account of tax effect being less than the limit prescribed by the
Board.

[The information relating to status of the relied upon judgment as indicated in (a) & (b) maybe
mentioned in the note to be enclosed as per Sl. No. 8(viii) above]

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13. (i) Name and present communicable address of all the respondents against whom SLP
is sought to be filed

14. (ii) E-mail addresses of all respondents

15. Communication details of PCIT/CIT

i. Name
ii. Telephone Number
iii. Fax number
iv. Mobile number
v. Official E-mail id

16. Specific comments of the CCIT for recommending SLP to be separately enclosed with the
proposal for consideration of Board.

Date :

Place :

Signature

Name & designation of the PCIT/CIT

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Note: In case of writ petitions, copy of writ petition, copy of counter & rejoinder affidavits filed in
the High Court and any other document crucial to the adjudication of issue.

1. The delay due to time taken in ascertaining the present status would be attributable to
the PCIT/CIT forwarding proposal without the same as this is very crucial to proceed
further.

2. The PCIT/CIT has to ensure that every page of the annexure is legible

Notes:

1. Separate Proforma `B’ to be filed for each Assessment Year

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Principal Commissioner of Income Tax, (Judicial)
Aayakar Bhavan, Maharshi Karve Road, New Marine
Lines,Mumbai – 400020