Punjab and Haryana High Court Directs Income Tax Appeals to be Resolved Timely Without Unnecessary Delays

The Punjab and Haryana High Court observed that a large number of writ petitions are being filed because appeals under the Income Tax Act are not being resolved yet. This indicates that there’s a widespread issue with delays in the appeal process.

In order to solve this problem, the Punjab and Haryana High Court strictly ordered tax authorities to follow the rule that appeals should be decided within one year. The judges pointed out that if appeals take too long to be resolved, it goes against the very purpose of the appeal process outlined in the Income Tax Act. Essentially, long delays make the appeal system unproductive, which is unfair to taxpayers seeking timely justice.

The division bench in the Punjab and Haryana High Court stated that since a large amount of government revenue is involved in these pending income tax appeals, it’s essential to resolve them quickly. The appeals are under process, that money can’t be used by the government, which affects public finances.

Hence, the court is saying that the officials who handle these appeals should make a serious effort to finish them, preferably within one year, as required by the law. The goal is to ensure efficiency and avoid financial barriers.

This means that the court’s decision was made in a case where a person or entity had challenged an income tax assessment order, but the appeal wasn’t acted upon for nearly five years. During that entire period, the case saw no movement or growth, which highlights the issue of serious delays in the appeals process. The court likely viewed this as unacceptable and used the case to emphasize the need for the timely resolution of such matters.

In accordance with Section 250 of the Income Tax Act it relates to the procedures to be followed while resolving any appeal. The bench stated that a simple reading of the law clearly reveals what the lawmakers intended. The law specifically states that every appeal should preferably be heard and decided within one year from the end of the financial year in which the appeal was filed.

It also states who is responsible: either the Joint Commissioner (Appeals) or the Commissioner (Appeals), depending on the case. The statement “where it is possible” shows that while it may not always be compulsory, the authorities should make a genuine effort to meet this one-year timeframe for resolving appeals. The goal is to ensure timely justice and reduce unnecessary delays.

The court noted that while the phrase “where it is possible” is used in the law, it’s clear that the lawmakers intended for appeals to be resolved within a set time. If an appeal isn’t decided within one year, the court said the reason for the delay must be clearly mentioned in the official records, stating whether the delay was caused by the taxpayer or the tax department. Even then, the court said, appeals should be resolved within two years at the most.

The court also mentioned a previous case where an appeal had been pending for almost ten years, and directions were given to resolve it within six months. In the current case, the court ordered the Commissioner of Income Tax-3 (Appeals) to decide the pending appeal within three months.

Finally, the court asked for a copy of this order to be sent to several tax authorities, including the Union of India, the Central Board of Direct Taxes (CBDT), and other senior tax officials so they could follow the instructions properly.