Income Tax Website Legal Corner. Questions of Law admitted or dismissed. by Bombay High Court to be displayed sectionwise.
Case Law Details:
ITA No. 2287 OF 2013
The Commissioner of Income Tax8 (Appellant) vs. M/s. TCL India Holdings Pvt. Ltd (Respondent)
Date of Judgment: 06-05-2016
Coram: Justice M. S. Sanklecha and Justice A. K. Menon
The question:
This appeal was filed by the Revenue raises questions with regard to whether transfer pricing adjustment consequent to arriving at Arms Length Price (ALP) is required to be done only in respect of the international transactions or this adjustment is to be done in respect of all the business transactions of the assessee at the entity level.
Observations of the Court:
The Court observed that a detailed order in the present Appeal was passed indicating that the Revenue had not been bringing to the notice of the Court orders of admission in its favour in the subsequent Appeals filed by it on identical questions. Due to this reluctance of the Revenue, the subsequent appeals filed by it raising identical questions were dismissed at the stage of admission itself.
Need for record of questions of law admitted/dismissed:
Their Lordships felt that the Income Tax Department must have a system of keeping a record of questions of law which have been admitted or dismissed by Bombay High Court to enable enable a consistent stand being taken by the Revenue when a similar question arises before the same or different Bench of the Court.
Earlier Direction issued to PCIT, Mumbai:
The Court had earlier directed the Principal Chief Commissioner of Income Tax, Mumbai to file affidavit indicating the steps being taken to ensure that a consistent view is taken by the Department.
Legal Corner on the income tax website:
Principal Chief Commissioner of Income Tax in his affidavit filed on 05/05/2016 indicated that the Department has decided to add a legal corner on its website where all questions of law which are admitted or dismissed by Bombay High Court will be entered sectionwise.
Tentative Date of Legal Corner becoming Live:
It was noticed that in the affidavit there was no indication of the proposed date from when the said legal corner would come into force. However the counsel for the Revenue stated that the proposed legal corner would possibly become functional by 15th June, 2016. However, the Court did not seem to be satisfied and asked for certainty for the date when such legal corner would become operational. Accordingly, it directed PCIT to file a further affidavit in this regard by 13/06/2016.
Suggestions for “Legal Corner” information content:
1. The respondent assessee suggested that the legal corner on the website should also indicate whether the question of law framed by the Revenue was rejected as the same been accepted by the Income Tax Department.
2. The Court observed that the fields presently provided under the head “legal corner” only mentioned the question which had been admitted or rejected. It is suggested that the Income Tax Department may add one more field viz. to cover cases where the question has been answered in the affirmative or in the negative.
The Court opined that these suggestions would ensure transparency and consistency in the stand taken by the Revenue
Further Listing of the Case:
The Court directed for this Appeal to be listed for hearing on 20th June, 2016 along with Income Tax Appeal Nos.2301 of 2013 and 1873 of 2013
Instant Effect of the Judgment:
The Income Tax Department Mumbai website has already started to host a legal corner on its website. Though, at present information is to be added, but this is one step forward in compliance of the Court’s judgment. The following information is proposed under the “Legal Corner” section.
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