17-Sep-2020: Tax tribunal makes innovative and aggressive use of IT techniques to dispense faster justice in the field of Direct Taxes despite corona

The Income Tax Appellate Tribunal, a statutory quasi-judicial institution created under the Income Tax Act, 1961 and the second appellate authority dealing with disputes in the field of Direct Taxes and widely acclaimed as the ‘Mother Tribunal’, has been modelling itself on its motto of ‘Nishpaksh Sulabh Satvar Nyay’, meaning Impartial, Easy and Speedy Justice, by maintaining good disposal even during the COVID-19 Pandemic period.  The innovative and aggressive use of techniques of Information Technology to dispense justice in the field of Direct Taxes in such times when physical hearing of cases was not found feasible on concerns of safety, etc. has been seamlessly adopted by the ITAT.

Justice P.P. Bhatt, President of ITAT directed the start of judicial proceedings immediately upon lifting of lockdown, albeit through the mode of Video Conferencing instead of physical hearings.  This has yielded good dividends inasmuch it has enabled the Benches to function, whereby cases have been heard and disposed of by hearing both parties from remote locations.  During the period starting from partial lifting of lockdown in April, 2020 and up to 31st August, 2020, as many as 5,392 cases were disposed of as against filing of 3,078 cases during such period.

The 63 Benches of the ITAT are spread over 28 regular stations and 2 Circuit Benches at Varanasi and Dehradun.  Administratively, the Benches are divided in 10 Zones, each headed by a Vice President.  All the Zones functioned during this period strictly in compliance with the guidelines and instructions issued by the Central and/or State Governments.

ITAT wishes to thank its stakeholders, viz., taxpayers, lawyers, Chartered Accountants and the Offices of the Income Tax Department in cooperating with the Benches and providing useful assistance in the administration of justice in the field of Direct Taxes during the current period of COVID-19 Pandemic.

25-Jul-2020: ITAT allows exemption of Rs 220 cr to Tata Education & Development Trust

In a major relief for Tata Education and Development Trust, the Income Tax Appellate Tribunal (ITAT) bench consisting of Justices PP Bhatt, President, ITAT , on 24th July ruled in favour of the trust in their appeal against commissioner income tax (CIT) appeal order wherein a demand of more than Rs.220 crore was levied by the tax department .ITAT also stayed the matter of that demand without any minimum pay.

The case pertains to assessment years 2011-12 and 2012-13 on money spent by the Trust for creating an endowment fund at Cornell University, US, to provide scholarships to Indian students, and granting financial assistance to the Harvard Business School for constructing an executive building to be named Tata Hall. It donated ₹197.79 crore in 2011-12 and ₹25.37 crore in 2012-13.

The controversy began after the Public Account Committee (PAC) of the Lok Sabha in 2018 sought an enquiry in the matter as it believed that exemption granted by the direct tax body was in violation of the I-T Act.

Concluding the matter, the Income-tax Appellate Tribunal (ITAT) on Friday stated that all other grounds of appeals will be “rendered, academic and infructuous”. "We have decided this issue in favour of the assessee and thus allowed this ground of appeal. We, therefore, uphold the plea of the assessee, and delete the resultant disallowance of claim of exemption,” it said.

The Appellate Tribunal also stated in its order that, “….this wholly avoidable litigation which does not only clog the serious litigation before the judicial forums but also diverts scarce resources of the philanthropic bodies, like the assessee before us, to the areas which do no good to the society at large.”  The Tribunal hoped that the admirable work being done by the Government of India, in pursuing such forward looking policies at the macro level, is not allowed to be overshadowed by the isolated situations like this, at the field level, which must be minimized by sensitising the authorities concerned. It observed, “ An effort should be made to create a taxpayer friendly atmosphere by adopting just and fair approach at every level of the tax administration.”

6-Apr-2020: Income Tax Appellate Tribunal holds All India Video Conference on ‘The Direct Tax Vivad Se Vishwas Act, 2020’

At a time when the entire world, including India, is traversing in the uncharted territory of the pandemic of Coronavirus COVID-19, and is virtually in a complete lockdown of 21 days effective 24th March, 2020 announced by the Government of India, the Income Tax Appellate Tribunal (ITAT), held an All India Video Conferencing of its Members on the topic ‘The Direct Tax Vivad Se Vishwas Act, 2020’ here today.  The session was presided over by Mr. Justice P.P. Bhatt, President, ITAT.  Shri Pramod Chandra Mody, Chairman, Central Board of Direct Taxes (CBDT) was the chief guest. The other guest faculty included Shri Kamlesh Chandra Varshney, Joint Secretary-TPL(1) and Shri Rajesh Kumar Bhoot, Joint Secretary-TPL(2) in the Ministry of Finance.   Keeping in view the relevancy and importance of the subject, the President, ITAT thought it fit to invite the representatives of the ten major Tax Bar Associations from all over India.  Accordingly, the representatives of the Bar Associations from Delhi, Mumbai, Ahmedabad, Bengaluru, Kolkata, Chennai, Hyderabad, Lucknow, Pune and Chandigarh participated.

In his Presidential address, Justice P.P. Bhatt emphasized the need of stakeholders’ participation in the Alternative Dispute Resolution Mechanism and explained the keen interest being evinced by the Central Government to create a dispute-free tax collection system. He stated that as an institution specialising in adjudication of tax disputes, ITAT expected all the stakeholders to consider availing the Scheme which was intended to reduce the pending litigation, enable timely recovery of taxes by the Government and sparing the taxpayers’ time, resources and energy from litigation.  He urged the stakeholders, more particularly, the tax practitioners to take the task further in a mission mode, so that the system that is choked with the avoidable litigation could be relieved for concentrating on more meritorious issues, which have a bearing on the tax policies affecting the taxpayers on a large scale.  He observed that the success of the technical session lies in carrying home the message by the representatives of the Bar Associations for further discussion with the members in their respective Associations and in carrying forward the objectives of the scheme to its logical conclusion.

Mr. P.C. Mody, Chairman, CBDT explained the objective behind the scheme and the role of the stakeholders in making it a grand success. He explained to the audience that the Government as well as the Board have undertaken a massive exercise of considering the suggestions from every corner, for proposing suitable amendments to the Act and also clarifying the doubts by way of answers to the frequently asked questions. He said that no scheme could be conceived with all the perfections, so also could be this scheme, and therefore, he assured that the Government and the Board are open for suggestions and comments from every stakeholder for better implementation of the scheme in its letter and spirit.

Mr. Kamlesh Chandra Varshney and Mr. Rajesh Kumar Bhoot, Joint Secretaries in the Ministry of Finance explained the subject from different angles and also the text of the scheme as well as the nuances involved in its implementation.

One representative from each of the ten Bar Associations participated in the discussions and deliberations by making several important suggestions for effective implementation of the scheme and also seeking clarification in respect of certain queries which go to the core of the implementation of the Scheme. The representatives of the Bar Associations unanimously expressed the opinion that the scheme itself is a wonderful piece of legislature that has come after a long time. They expressed a feeling that the unique initiative of holding the technical session by the  ITAT would go a long way in facilitating the implementation of the scheme and the expertise of the speakers on the subject reflected in their dealing with the subject and had thrown a new light in the understanding of the nuances. The representatives of the Bar Associations also expressed their satisfaction about the value addition to the knowledge which they would share with the other members of the Associations and to encourage the deserving cases to end up in filing the declarations under this scheme.

Mr. G.S. Pannu, Vice President of Delhi Zone coordinated the entire session.  It was emphasised by Mr. Pannu that apart from the scheme which was laudable, it was important that the CBDT draws up a mechanism, by way of which, the litigation is kept within manageable limits by making suitable amendments in the Statute.

The one and half hour long video conference came to an end with the vote of thanks presented by Mr. R.S. Syal, Vice President, Pune Zone.

28-Feb-2018: Pharma promotions to doctors exempt from tax

A recent decision of the Income Tax Appellate Tribunal’s Pune bench allowing pharmaceutical companies to account for their spending on doctors as a deductible expenditure has sparked off a fresh debate on ethics.

Since the companies are out of the purview of the Medical Council of India (MCI), money spent on promotions, which in some cases could be gifts, travel, hospitality and so on for doctors, besides medical conferences and samples, can be claimed as deductible expenditure. Doctors accepting such promotions may be violating the code of ethics of the MCI.

14-Sep-2020: Status of Mahanadi Tribunal

The Central Government has constituted Mahanadi Water Disputes Tribunal on 12.03.2018 under Section 4 of the Inter-State River Water Disputes Act, 1956 (as amended) for adjudication of water dispute regarding the inter-state river Mahanadi.

At present the dispute is under adjudication in the Tribunal under Section 5 (2) of Inter-State River Water Disputes Act, 1956 (as amended).

 As per Section 5(2) of Inter-State River Water Disputes Act, 1956 (as amended) “The Tribunal shall investigate the matters referred to it and forward to the Central Government a report setting out the facts as found by it and giving its decision on the matters referred to it within a period of three years (emphasis added).

Provided that if the decision cannot be given for unavoidable reason, within a period of three years, the Central Government may extend the period for a further period not exceeding two years”.

Thereafter, under Section 5(3) of the said Act, the Central Government/State Government(s) may again refer the matter to the Tribunal for further consideration, which may then give its further report within one year, with the option to extend for such further period as Central Government considers necessary.

17-Apr-2018: Central Government hands over reference of Mahanadi Water Disputes to the Tribunal Chairman Justice A M Khanwilkar

Shri. U.P. Singh, Secretary, Ministry of Water Resources, River Development and  Ganga Rejuvenation  handed over reference of Mahanadi Water Disputes Tribunal under Section 5 (1) of the Inter-State River Water Disputes Act (ISRWD), 1956 to Hon’ble Justice A.M. Khanwilkar, Chairman of Mahanadi Water Disputes Tribunal and Judge of the Supreme Court.

On 19.11.20116, the Odisha Government had submitted complaint under Section 3 of the ISRWD Act, 1956 to the Central Government for seeking constitution of Inter-State Water Disputes Tribunal for the adjudication of water disputes in respect of Mahanadi river between the riparian states of Odisha and Chhattisgarh.  On this, the Ministry constituted a Negotiation Committee which held two meetings, but the negotiations were not successful.  Odisha also filed Original Suit 1 of 2017in the Supreme Court.  The Supreme Court in their Order dated 23.01.2018 directed the Central Government to constitute a Tribunal for adjudication of disputes on river Mahanadi and also advised Odisha to present its plea before the Tribunal.

The Central Government constituted Mahanadi Water Disputes Tribunal on 12.03.2018 with the following composition:-

Mr. Justice A.M. Khanwilkar (Judge of the Supreme Court of India)	Chairman
Dr. Justice Ravi Ranjan (Judge of the Patna High Court)	Member
Justice Indermeet Kaur Kochhar (Judge of the Delhi  High Court)	Member

12-Mar-2018: Centre Constitutes Mahanadi Water Disputes Tribunal

The Ministry of Water Resources, River Development and Ganga Rejuvenation has issued a notification constituting the Mahanadi Water Disputes Tribunal. The Tribunal will have its headquarters at Delhi and will have the following members nominated by the Chief Justice of India:

• Mr. Justice A.M. Khanwilkar, Judge, Supreme Court of India as Chairman
• Dr Justice Ravi Ranjan, Judge, Patna High Court as Member
• Mrs. Justice Indermeet Kaur Kochhar, Judge, Delhi High Court as Member

The Tribunal has been constituted following orders of the Supreme Court dated 23rd January, 2018 in a suit filed by the Government of Odisha. The Government of Odisha had sought to refer the water dispute regarding the inter-state river Mahanadi and its river valley to a Tribunal for adjudication under the Inter-State River Water Disputes Act, 1956.