In a bid to unlock revenue and improve litigation management, the Central Board of Direct Taxes (CBDT) has directed officials to dispose of cases which are pending at the commissioner’s level for over five years.
They have to do this by the end of the current financial year, according to two sources privy to the development.
The sources said about 31,000 cases worth about Rs 500 crore are pending before the commissioner of income tax (I-T) (appeals) for more than five years and have been stayed by the judicial authorities. The apex body wants to make this “nil” by March 31, 2020.
“Appeals pending for more than five years will be given the highest priority. Cases set aside and restored to the CIT (appeals) by the court or income tax appellate tribunal are to be settled on priority,” said an I-T official, who received direction from the apex body.
Sources said this directive is not for revenue augmentation but aimed at reducing the arrear demand locked up in litigation. They, in fact, were of the view that this could increase refunds outgo. The target of reduction in arrears of demand has been retained at 40 per cent of the total demand as on April 1, 2019.
For the current financial year, the CBDT wants a minimum 15 per cent of the brought forward entries of arrear demand to be reduced in corporate and international taxation. It also wants 25 per cent of such entries to be reduced in non-corporate cases.
Moreover, the CBDT has prescribed targets and norms with respect to disposal of cases pending with CIT (A) in each region.
According to the body, tax demand above Rs 50 crore and pending as on April 1, 2019, should be disposed of by December 31. Of the remaining, higher priority will be given to appeals involving a demand of Rs 10 lakh and above irrespective of the year in which the appeals are filed.
Search and seizure appeals belonging to the same group shall be grouped together for disposal even if some of the appeals do not fall within the priority category.
Appeals have been segregated demand-wise, whereby high-value appeals have been targeted for disposal at the earliest. Each CIT (A) is expected to dispose of a minimum 550 appeals.
It further said that those appeals involving demand of between Rs 2 and Rs 10 lakh will receive the next priority for disposal. This will be followed by those appeals where tax demands are less than Rs 2 lakh and filed upto March 2019. The CBDT clarified that a demand less than Rs 10 lakh and filed in the current financial year should be given lowest priority.
Besides, appeals of the same taxpayers relating to different years involving substantially similar tax issues or inter-related issues may be disposed of irrespective of the category to which it belongs.
The CBDT also asked principal commissioners to identify the top 20 cases for quality assessment and will make proper representation before the CIT (appeals). Apart from pending cases at CIT appeals, the CBDT also asked commissioners of each region to reduce the cases which are stuck at courts and ITAT.
To ensure proper litigation management, the CBDT also wants a master list of appeals pending at various levels and tribunals. The CBDT also said that principal and chief commissioners will identify the prosecution complaints pending for more than two years. They will then devise a case-specific litigation strategy to enable the courts take a final view at the earliest.