Income Tax Website Legal Corner. Questions of Law admitted or dismissed by Bombay High Court to be displayed section­wise.

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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