Bofors case: Govt likely to challenge ITAT ruling

Last Updated: Monday, February 7, 2011 - 14:46

New Delhi: The government is likely to
challenge the Income Tax Appellate Tribunal ruling on Bofors
case in the Delhi High Court for its remarks against the
Income Tax department.

Though government was not a direct party in the case,
based on the opinion of Attorney General Ghoolam Vahanvati,
the Law Ministry is understood to have asked the Finance
Ministry to challenge the ITAT ruling as it contained certain
remarks against the Income Tax department.

The tribunal had said that commissions were paid to
late Win Chaddha and Italian businessman Ottavio Quattrocchi
in the Bofors gun deal in the nineties.

"In our view, to enforce the rule of law, these steps
were desirable to bring all the relevant income tax violations
to the logical end by the Income Tax department. Inaction in
this regard may lead to a non-existent undesirable and
detrimental notion that India is a soft state and one can
meddle with its tax laws with impunity," the tribunal had said
in its 98-page order.

Vahanvati is learnt to have told the Law Ministry that
the Income Tax department, which comes under the Finance
Ministry, should challenge the ITAT order in the Delhi High
Court for removal of the remarks by the tribunal against the
Income Tax department in its December 2010 order.

The appeal will be restricted to the strictures
against the I-T department only. It will not touch upon the
issue of any private person who had approached the tribunal on
taxation matters.

The tribunal in a ruling on an appeal filed by
Chaddha`s son, Hersh W Chaddha had concluded the arms dealer
had got Rs 52.6 crore as kickbacks and Quattrocchi got USD
seven million (around Rs 13 crore).

In response to a reference from the Finance Ministry,
the AG is learnt to have stated the tribunal had overstepped
its jurisdiction.

PTI



First Published: Monday, February 7, 2011 - 14:46

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