“Ridiculous, wholly misconceived, non-application of mind and frivolous,” — were the adjectives used by the Punjab and Haryana High Court while describing a frivolous appeal of the Commissioner of Income, Panchkula, against the Income Tax Appellate Tribunal.

The Commissioner had imposed a penalty on the Haryana Warehousing Corporation in April 2006, for alleged tax evasion to the tune of Rs 1,04,61,330. The assessee (Haryana Warehousing Corporation) moved the Income Tax Appellate Tribunal that set aside the ‘wrongly’ imposed penalty. Aggrieved, the commissioner moved the High Court challenging the order of the Tribunal.

Dismissing the appeal, a Division Bench comprising Justice J S Khehar and Justice Ajay Tewari deprecated the conduct of the commissioner. Referring to five arguments raised by the counsel for Commissioner of Income, Panchkula, the Division Bench held: “To our mind, all the five issues taken into consideration by the Income Tax Appellate Tribunal, while passing the order dated October 4, 2007, were individually sufficient to accept the claim of the assessee.” Adding that the court has refrained from imposing any costs on the commissioner, the Bench held: “This restraint is because of our desire to awaken the revenue to its responsibility. Costs are imposed by courts, not as a measure of punishment, but as a matter of misuse of jurisdiction. A similar situation in the future may prompt us to take the next undesired step of imposing costs.”

The HC added: “We hope that in the future, the responsibility of genuine decision making will be taken seriously, not only for the purpose of avoiding frivolous litigation and/or wasting court time, but also for, avoiding unnecessary expense and harassment to an innocent litigant. Had we issued notice in the instant appeal and thereby summoned the litigant, we would have no recourse, but to compensate the litigant by awarding appropriate costs.”