Cutting down multiple tiers of scrutiny

“The propensity of government departments and public authorities to keep litigating through different tiers of judicial scrutiny is one of the reasons for docket explosion. The Income Tax (I-T) Department is one of the major litigants,” the Supreme Court observed while dismissing an appeal of the revenue authorities. The judgment stated that “the government, being a litigant in well over 50 per cent of the cases, has to take a lead in not being a compulsive litigant”. The court was dealing with the case, Director of I-T vs SRMB Dairy Farming Ltd in which the implementation of a 2011 circular to reduce the tiers of appeals was the subject matter. According to the circular, appeals should not be filed before high courts where the tax impact was less than ~10 lakh. The limit put in 2000 was ~4 lakh. This was meant to speed up adjudication, according to the National Litigation Policy. However, there was ambiguity in the interpretation of the circular: Whether it would apply to pending matters. Setting at rest the difference in views, the apex court declared it would apply to pending matters subject to two minor caveats. Commenting on the “multiple tiers of scrutiny” the court pointed out there are two departmental instances of scrutiny, at the level of the assessing officer and the Commissioner of Income Tax (Appeals), and thereafter an independent judicial scrutiny at the Income Tax Appellate Tribunal followed by the high courts and the Supreme Court.