B.—Special provisions for avoiding repetitive appeals

Procedure when assessee claims identical question of law is pending before High Court or Supreme Court.

375(1)

Irrespective of anything contained in this Act, where an assessee claims that—

• (a) any question of law arising in his case for a tax year pending before the Assessing Officer or any appellate authority (such case being hereafter in this section referred to as the relevant case) is identical with a question of law arising in his case for another tax year;
• (b) such question of law is pending before— (i) the High Court on a reference under section 256 or on an appeal under section 260A of the Income-tax Act, 1961; or (ii) the Supreme Court on a reference under section 257 or on an appeal under section 261 of the Income-tax Act, 1961; or (iii) the High Court on an appeal made under section 365; or (iv) the Supreme Court on appeal made under section 367; or (v) in a Special Leave Petition under article 136 of the Constitution, against the order of the Appellate Tribunal or the jurisdictional High Court, such case being hereafter in this section referred to as the other case, he may furnish a declaration to the Assessing Officer or the appellate authority, in such form and manner, as prescribed, that if the Assessing Officer or the appellate authority, agrees to apply in the relevant case, the final decision on the question of law in the other case, he shall not raise such question of law in the relevant case before any appellate authority or in a subsequent appeal before a higher forum.

375(2)

Where a declaration under sub-section (1) is furnished to any appellate authority, the appellate authority shall––

• (a) call for a report from the Assessing Officer on the correctness of the claim made by the assessee; and
• (b) allow the Assessing Officer an opportunity of being heard in the matter, if such request is made by him.

375(3)

The Assessing Officer or the appellate authority, may, by an order in writing,—

• (a) admit the claim of the assessee if he or it is satisfied that the question of law arising in the relevant case is identical with the question of law in the other case; or
• (b) reject the claim if not so satisfied.

375(4)

An order under sub-section (3) shall be final and shall not be called in question in any proceeding by way of appeal or revision under this Act.

375(5)

Where a claim is admitted under sub-section (3),—

• (a) the Assessing Officer or the appellate authority, may make an order disposing of the relevant case without awaiting the final decision on the question of law in the other case; and
• (b) the assessee shall not be entitled to raise, in relation to the relevant case, such question of law in appeal before any appellate authority or in any subsequent appeal before a higher forum.

375(6)

When the decision on the question of law in the other case becomes final, it shall be applied to the relevant case and the Assessing Officer or the appellate authority, shall, if necessary, amend the order referred to in sub-section 5(a) in conformity with such decision.

375(7)

In this section,—

• (a) “appellate authority” means the Joint Commissioner (Appeals) or the Commissioner (Appeals) or the Appellate Tribunal;
• (b) “case”, in relation to an assessee, means any proceeding under this Act for the assessment of the total income of the assessee or for the imposition of any penalty or fine on him; and
• (c) “subsequent appeal before a higher forum” means the appeal before the High Court under section 365 or appeal before the Supreme Court under section 367 or in a Special Leave Petition under article 136 of the Constitution, against the order of the Appellate Tribunal or the jurisdictional High Court.

Explanation

Section Summary:

Section 375 introduces a procedure to avoid repetitive appeals in cases where an identical question of law is already pending before a higher judicial authority (High Court or Supreme Court) for another tax year. The section allows the assessee (taxpayer) to request that the decision in the pending case be applied to their current case, thereby preventing the need to re-litigate the same legal issue.

Key Changes:

1. New Provision: This is a new section introduced to streamline the resolution of cases involving identical legal questions. Previously, there was no formal mechanism to address repetitive appeals on the same legal issue.
2. Formal Declaration: The assessee can now formally declare that a question of law in their current case is identical to one already pending before a higher court, and request that the final decision in the pending case be applied to their current case.

Practical Implications:

1. Efficiency: This provision reduces the burden on both taxpayers and tax authorities by avoiding repetitive litigation on the same legal issue.
2. Binding Effect: Once the assessee’s claim is admitted, they cannot raise the same question of law in subsequent appeals, ensuring finality and consistency in legal interpretations.
3. Faster Resolution: The Assessing Officer or appellate authority can dispose of the case without waiting for the final decision in the pending case, speeding up the resolution process.

Critical Concepts:

1. Question of Law: A legal issue that requires interpretation of the law, as opposed to a question of fact, which involves determining what actually happened.
2. Final Decision: The ultimate ruling by the High Court or Supreme Court on the pending legal question.
3. Appellate Authority: Includes Joint Commissioner (Appeals), Commissioner (Appeals), and the Appellate Tribunal.

Compliance Steps:

1. Declaration by Assessee: The assessee must furnish a declaration to the Assessing Officer or appellate authority, stating that the question of law in their current case is identical to one pending before a higher court.
2. Verification by Authority: The appellate authority will call for a report from the Assessing Officer to verify the correctness of the claim and may allow the Assessing Officer to be heard.
3. Admission or Rejection: The Assessing Officer or appellate authority will admit or reject the claim based on whether the questions of law are identical.
4. Application of Final Decision: Once the final decision in the pending case is made, it will be applied to the current case, and any necessary amendments will be made to the order.

Examples:

Scenario 1: An assessee has a case pending before the High Court regarding the taxability of a specific type of income. For the next tax year, the same issue arises in their assessment. The assessee can file a declaration under Section 375, requesting that the decision in the pending High Court case be applied to the current year’s assessment. If the claim is admitted, the Assessing Officer can finalize the assessment without waiting for the High Court’s decision, and the assessee cannot raise the same issue in future appeals.

Scenario 2: An assessee has a case pending before the Supreme Court regarding the interpretation of a tax deduction provision. For a subsequent tax year, the same legal question arises. The assessee can declare that the issue is identical and request that the Supreme Court’s decision be applied to the current case. If admitted, the appellate authority can dispose of the case promptly, and the assessee is barred from raising the same issue in future appeals.

This section promotes judicial efficiency and consistency in tax litigation by preventing repetitive appeals on the same legal questions.