TaxTMI 
TaxTMI 
2016 (7) TMI 928
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....quent appeals on the same issue. 2. This appeal 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 i.e. at the entity level. 3. A similar issue which was raised by the Revenue before this Court in Commissioner of Income Tax Vs. M/s. Tara Jewels Exports Pvt. Ltd. (Income Tax Appeal No.1814 of 2013) decided on 5th October, 2015, Commissioner of Income Tax Vs. Goldstar Jewellery Design (P.)Ltd. (2016) 67 taxmann.com 86 (Bombay) and Commissioner of Income Tax Vs. Ratilal Becharlal & Sons (2016) 65 taxmann.com 155 (Bombay) while challenging the orders of the Tribunal restricting the transfer pricing adjustment only in respect of international transaction between Associated Enterprises. These appeals were not entertained by this Court holding that the adjustments on account of transfer pricing is restricted only to international transactions and is not to be extended across all transaction including those with non Associated Enterprises ....
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....before us in all the above cases. In the above view, it was felt that the Income Tax Department must have in place a system of keeping a record of questions of law which have been admitted or dismissed by this Court. This alone would enable a consistent stand being taken by the Revenue when a similar question arises before the same or different Bench of this Court. This is necessary to ensure that the law is applied equally to all. 6. Therefore, the Principal Chief Commissioner of Income Tax who is the head of all the Commissionerates at Mumbai was directed to place on record the steps being taken to ensure that a consistent view is taken by the Department. The Principal Chief Commissioner of Income Tax had filed an affidavit dated 5th May, 2016. Today, the learned Additional Solicitor General tenders an affidavit of one Mr. Purshotam Tripuri, Commissioner of Income Tax (Judicial) dated 11th July, 2016 indicating the steps being taken by the department to ensure that the Revenue is properly represented. In particular, it is pointed out that the Officers of the Revenue are being sensitized to maintain consistency in preferring appeals to this court. Further, it is stated that the &....
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....ief Commissioner of Income Tax at para 6 indicates that the questions of law on which appeals are filed are framed by the Principal Commissioner of Income Tax. It therefore appears that the Advocates appearing for the Revenue merely reproduce the same without making any modifications. This is evidenced by the fact that on numerous occasions we have had the Advocate informing us that they have to press all the questions and no question could be excluded unless they obtain permission from the Commissioner of Income Tax. This would not happen if the Advocates were involved in framing the question of law and on discussions a considered view was taken at the time of filing the appeal itself. Further at times the question as framed does not bring out the controversy in an appropriate manner as it is not framed by a lawyer. In fact, we have had occasion to observe at times that the question of law are raised on merits of the issue and not on the issue of jurisdiction / method of arriving at the Arms Length Price (ALP) decided against the Revenue. Thus, rendering the entire exercise of filing of appeals a futile exercise (See Income Tax Appeal No.72 of 2014 and connected matters, order dat....
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....hird dimension touching the mode of appointment of lawyers declared that in conformity with the obligation cast upon them those handling the affairs of the State are duty bound to select the most meritorious, whatever the method adopted for such selection and appointment may be. It must be shown that a search for the meritorious was undertaken and that appointments were made only on the basis of the merit and not for any other consideration. The following passage is in this regard apposite. "18. The mode of appointment of lawyers for the public bodies, therefore, has to be in conformity with the obligation cast on them to select the most meritorious. An open invitation to the lawyers to compete for the posts is by far the best mode of such selection. But sometimes the best may not compete or a competent candidate may not be available from among the competitors. In such circumstances, the public bodies may resort to other methods such as inviting and appointing the best available, although he may not have applied for the post. Whatever the method adopted, it must be shown that the search for the meritorious was undertaken and the appointments were made only on the basis of the me....
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....he State and thereby the interest of the general public before a court of law. This requires that government counsel have character, competence, sufficient experience as also standing at the Bar. The need for employing meritorious and competent persons to maintain the standard of the high office cannot be minimized, observed the court, particularly, when the holders of the post have a public duty to perform. The Court also expressed anguish over the fact that in certain cases the recommendations are made by the District Magistrate having regard to the political affinity of the lawyers to the party in power and that State is not expected to rescind the appointments with the change in the government because a new party has taken over charge of the Government. This Court also recognized the ageold tradition of appointing the District Government Counsel on the basis of the recommendations of the District Collector in consultation with the District Judge. The fact that the District Judge, who is consulted while making such appointment knows the merit, competence and capability of the lawyer concerned, was also recognized by the Court. 39. ..... ..... .... 40. ..... ..... The State....
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....discharge of any other function by the Government and public bodies, be only in public interest unaffected by any political or other extraneous considerations. 41.8. The government and public bodies are under an obligation to engage the most competent of the lawyers to represent them in the Courts for it is only when those appointed are professionally competent that public interest can be protected in the Courts. 41.9 The Government and public bodies are free to choose the method for selecting the best lawyers but any such selection and appointment process must demonstrate that a search for the meritorious was undertaken and that the process was unaffected by any extraneous considerations." (emphasis supplied) 11. The above observations, we hope would be kept in mind while making appointments of Advocates on the Revenue's panel. The issues which arise before this Court have at times huge tax implications and as the decision rendered in one case would have a bearing on all similar matters across the State, the importance of proper appointment is paramount. One possible way forward would be to also include the State's law officers such as the Additional Solicitor G....
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....) and he has also directed the Asst. Director of Incometax (IT) (2), Mumbai, to file this appeal. Either there is no application of mind to the order of the Tribunal before filing of this appeal or the Revenue is deliberately seeking to keep the pot boiling, so that uncertainty is kept alive. It shows the casual attitude of the Revenue in filing appeals. This is not the first of its kind. We had earlier also passed orders disapproving this conduct of the Revenue but there is no improvement. If filing of such appeals on questions Nos. (1), (2) and (3) by the Revenue without justification is unacceptable, the counsel for the Revenue persisting in arguing those questions of law taking valuable time of court is further objectionable. Such frivolous appeals add to the burden of the court and thoughtless prosecution of these takes time of the court which could be utilised for more meritorious (debatable) cases. (iv) The manner in which sometimes the unmeritorious appeals are persisted by the advocates for the Revenue reminds us of the famous observations of Mr. Justice Crampton in R v. O'Connell [1844] 7 ILR 261 at 312 : "Another doctrine broached by another eminent counsel I c....