Income Tax Fast Tracks Disposal Of High-Value Litigations

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With Rs 7.3 lakh crore locked in litigations, the tax department has set December 31 as the deadline for deciding all appeals involving demands of Rs 50 crore and above, according to its new action plan.

As on April 1, there were 1,390 appeals involving demands of Rs 50 crore and above, aggregating to Rs. 4.26 lakh crore.

The tax department wants these demands, about 70 per cent of the amount locked in litigations, to be settled by the year end.

The Central Action Plan 2017-18 of the Central Board of Direct Taxes (CBDT) has linked performance evaluation of taxmen with the disposal of appeals against tax demands.

Income Tax Fast Tracks Disposal Of High-Value Litigations

"To meet the core objectives of budget collection, reduction in outstanding demand and litigation management, a two-pronged strategy shall be adopted with the proportionate focus on optimizing disposal in terms of numbers and on maximizing disposal of appeals involving high quantum of demand," it said.

The plan categorizes appeals against tax demands by value with priority being placed on disposal of appeals involving Rs. 10 lakhs and above. Within this, cases involving Rs. 50 crore and more have to be given higher priority.

The next priority has been given to disposing appeals involving demand of less than Rs. 10 lakh, but which had been filed up to March 31, 2017.

The lowest priority has been given to demands of less than Rs. 10 lakhs and filed during current fiscal.

The Action Plan sets Commissioner of Income Tax (CIT) a target for disposal of at least 30 per cent of the appeals involving demand of Rs. 10 lakhs and above; and 100 per cent of appeals pending as on April 1, 2017, that involve demand of Rs. 50 crore and above.

Also at least 70 per cent of appeals that involve demand of less than Rs. 10 lakhs have to be disposed of.

"The above targets should result, on the all-India basis, in an aggregate disposal of about 1.63 lakh appeals, which is expected to significantly reduce the pendency at the end of the year as compared to the pendency as on April 1, 2017, as well as unlock demand of about Rs. 4.5 lakh crore," the Action Plan document said.

The targets of disposal of 30 per cent of appeals involving demand of Rs. 10 lakh and above and 70 per cent of appeals involving demand less than Rs. 10 lakhs, must be achieved by each CIT(A) and in the Principal CCIT region as a whole.

"For the purpose of evaluation of the performance of an individual officer holding an additional appellate charge(s) during the year/part-year, the aggregate disposal including in the additional charge(s) held, shall be considered," the document said.

As of April 1, 2017, over 2.90 lakh appeals are pending with CsIT(A) involving demand of Rs. 6.11 lakh crore. Besides, total tax demand stayed by ITAT/Courts stood at Rs. 1.18 lakh crore.

The Action Plan also entrusted the Chief Commissioner Income Tax (CCIT) to identify 20 top litigation cases of assesses in his region by July 31, based on the importance of issues, revenue potential and recurring nature of the issue.

After identification, the cases with common or similar issues shall be bunched, and the Principal CCIT would then nominate a resource person (of the level of Principal CIT/CIT) or form a team for each case or the bunch of cases by August 15.

Read more about: tax, income tax
Story first published: Wednesday, July 12, 2017, 10:24 [IST]
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