I-T panel to review dispute system

Currently, tax demands of Rs 4 lakh cr are under dispute and litigation before various courts and appellate authorities

The finance ministry on Thursday set up a panel to assess the effectiveness of the first-level appellate authorities and suggest measures to bring down litigation in the income tax department. “It has been decided to constitute a committee to appraise the efficacy of existing dispute resolution forums of Commissioners of Income Tax (Appeals) and Income Tax Appellate Tribunal (ITAT) and to suggest steps to reduce litigation before these forums,” said a notification by  the Central Board of Direct Taxes (CBDT).

The six-member committee of the CBDT will be headed by an officer of the rank of chief commissioner (income tax). Rani Nair, currently posted as CIT -Ahmedabad, has been named its head. Five commissioners, drawn from various field formations of the I-T department, will be its members. The committee has been given eight weeks time to submit its report.

Currently, tax demands of Rs 4 lakh crore are under dispute and litigation before various courts and appellate authorities. Finance Minister Arun Jaitley, in his Budget speech, had said this was one of the serious concerns of all taxpayers in the country. In order to reduce litigation in direct taxes, he had proposed to make certain legislative and administrative changes.

According to the terms of reference issued by the CBDT, the panel will carry out detailed analysis of efficacy of existing system of filing of appeals and assessment orders on various aspects and recommend steps to reduce litigation before appellate authorities. It will study the success rate of appeals filed by both the department and the assessee before these authorities.  

A taxpayer has a four-stage grievance redressal and litigation mechanism available beginning with CIT Appeals, further up to the ITAT and subsequently to the high court and the Supreme Court (SC). The committee won’t look at cases going to high courts and  the SC.

CBDT has also asked the new committee to undertake a fresh initiative and categorise and study select assessment orders issued by I-T officers across the country under various income groups. The categories include income under Rs 25 lakh, Rs 25 lakh-Rs 1 crore, Rs 1-10 crore and above Rs 10 crore.

The committee will also undertake sampling of the orders passed by ITAT spread across various months during 2013-14.

It will select about 200 orders of ITAT from its benches in eight major cities of Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Pune, Ahmedabad and Bangalore.