The Central Board of Direct Taxes (CBDT) has constituted a six-member panel vide Office Memorandum [F.NO.279/MISC./M-84/2014-(ITJ)], DATED 17-7-2014 to examine the “efficacy“ of the existing primary litigation mechanism for income tax, taking forward the new government's resolve to bring down tax disputes.
An estimated Rs. 4 lakh crore of tax revenue is locked up in litigation. The empowered committee has also been mandated to suggest steps to reduce legal cases at the income tax department's two dispute resolution for a and asked to submit its report in eight weeks. Senior Indian Revenue Service (IRS) officer and chief commissioner of the income tax office in Ahmedabad Rani S Nair has been made chairperson of the panel. Five other commissioners, drawn from various field formations of the I-T department, will be members of the panel. The committee would scrutinise close to 7,000 sample cases in the I-T department's dispute resolution fora as part of its task. Over 30,000 cases, in which an amount of Rs. 4 lakh crore is stuck, are pending in these fora, the official added.
“It has been decided to constitute a committee to appraise the efficacy of existing dispute resolution forums of Commissioners of I-T (Appeals) and Income Tax Appellate Tribunal (ITAT) and to suggest steps to reduce litigation before these fora,“ the apex direct taxes body said in a notification. According to the terms of reference issued by CBDT, the committee will carry out detailed analysis of appellate orders and assessment orders on various aspects and recommend steps to reduce litigation before CIT (Appeal). It will also “study the efficacy of existing system of filing appeals to the ITAT by the department and suggest steps to reduce litigation before the ITAT after analysing various aspects“.
There is a four-stage grievance redressal and litigation mechanism available to a taxpayer, beginning with an appeal to the Commissioner of I-T Appeals called CIT (A), up to the ITAT and subsequently to the high courts and the Supreme Court. The 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 (returned income). The categories defined by CBDT include income under Rs. 25 lakh, income between Rs. 25 lakh and Rs. 1 crore, between Rs. 1 crore and Rs. 10 crore, and above Rs. 10 crore. The Office Memorandum regarding Tax Disputes is as follows:
An estimated Rs. 4 lakh crore of tax revenue is locked up in litigation. The empowered committee has also been mandated to suggest steps to reduce legal cases at the income tax department's two dispute resolution for a and asked to submit its report in eight weeks. Senior Indian Revenue Service (IRS) officer and chief commissioner of the income tax office in Ahmedabad Rani S Nair has been made chairperson of the panel. Five other commissioners, drawn from various field formations of the I-T department, will be members of the panel. The committee would scrutinise close to 7,000 sample cases in the I-T department's dispute resolution fora as part of its task. Over 30,000 cases, in which an amount of Rs. 4 lakh crore is stuck, are pending in these fora, the official added.
“It has been decided to constitute a committee to appraise the efficacy of existing dispute resolution forums of Commissioners of I-T (Appeals) and Income Tax Appellate Tribunal (ITAT) and to suggest steps to reduce litigation before these fora,“ the apex direct taxes body said in a notification. According to the terms of reference issued by CBDT, the committee will carry out detailed analysis of appellate orders and assessment orders on various aspects and recommend steps to reduce litigation before CIT (Appeal). It will also “study the efficacy of existing system of filing appeals to the ITAT by the department and suggest steps to reduce litigation before the ITAT after analysing various aspects“.
There is a four-stage grievance redressal and litigation mechanism available to a taxpayer, beginning with an appeal to the Commissioner of I-T Appeals called CIT (A), up to the ITAT and subsequently to the high courts and the Supreme Court. The 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 (returned income). The categories defined by CBDT include income under Rs. 25 lakh, income between Rs. 25 lakh and Rs. 1 crore, between Rs. 1 crore and Rs. 10 crore, and above Rs. 10 crore. The Office Memorandum regarding Tax Disputes is as follows:
CONSTITUTION OF A COMMITTEE TO STUDY THE APPELLATE ORDERS TO EXAMINE FILING OF APPEALS BY DEPARTMENT BEFORE VARIOUS FORUMS
OFFICE MEMORANDUM [F.NO.279/MISC./M-84/2014-(ITJ)],
DATED 17-7-2014
It has been decided to constitute a Committee to appraise the efficacy of existing dispute resolution forums of CsIT (A) & ITAT and to suggest steps to reduce litigation before these forums. The composition of the Committee is as follows:
Sl. No
|
Name
|
Designation
| |
1.
|
Ms. Rani S Nair
|
Chief Commissioner of Income tax- II, Ahmedabad
|
Chairperson
|
2.
|
Ms. Uma Singh
|
CIT(J),Mumbai
|
Members
|
3.
|
Sh. Rakesh Goyal
|
CIT-XXI, Kolkata
| |
4.
|
Sh. D K Mishra
|
CIT (J), Delhi
| |
5.
|
Sh. Rajib Hota
|
CIT(TDS),Chennai
| |
6.
|
Sh. D S Kalyan
|
CIT(ITAT)-V, Ahmedabad
|
1.2 The Chairperson may appoint an officer as Member
Secretary. The Committee may co-opt other members as it deems fit to
have proper representation, co-ordination and feedback from ITAT at
non-metro stations.
2. The Committee shall submit its report within 8 weeks from the date of its constitution.
3. The terms of reference of the committee will be as follows.
| (i) | To carry out detailed analysis of appellate orders and assessment orders, on various aspects as suggested in Para 7 and recommend steps to reduce litigation before the CIT(A). | |
| (ii) | To study the efficacy of existing system of filing appeals to the ITAT by the Department and suggest steps to reduce litigation before the ITAT after analyzing various aspects as mentioned in Para 7. |
4. The Committee should examine the assessment orders,
appellate orders and scrutiny report for the appeal to the ITAT related
to orders selected as per guidelines mentioned in Para 5 below and give
its recommendations for different income groups as defined in Para 6
separately for corporate and non- corporate assessees.
5. Guidelines to select orders:
| (i) | Sample should be drawn from the orders passed by the ITAT during the month of June, September, December and March of the FY 2013-14. | |
| (ii) | (a) Approximately 200 orders should be selected for study from each of the following 8 major cities: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Pune, Ahmedabad and Bangalore. | |
| (ii) | (b) Approximately 150 orders should be selected for study from each of the following stations: Chandigarh, Jaipur, Indore, Lucknow and Kochi. | |
| (iii) | As far as possible, orders in cases of corporate and non-corporate assessees should be selected in equal numbers, particularly in Metro charges whereas in non-metro, sample of non-corporate assessees may be larger. It must also be ensured that some orders in search cases are in select basket. | |
| (iv) | As number of appeals filed by the Department before ITAT is much larger than appeals filed by the assessee, the order in appeals filed by the Department and by the assessee may be selected in the ratio of 2:1. |
6. Analysis should be done and conclusions be drawn
separately by categorising assessment orders in various income groups
(returned income) as under:
< 25 Lakh
25 Lakh to 1 Crore
1 Crore to 10 Crore
10 Crore and above
7. Within the overall terms of reference, an analysis on
the following aspects should be conducted, along with any other that the
Committee deems fit:
| (i) | Assessment Orders: Nature of additions made in general, guidance of supervisory authorities, sustainability of additions in appeal, quality of addition made and average tax effect of additions made in each category at Para 6 above. | |
| (ii) | Orders of CIT (A): Whether relief allowed is based on proper marshalling of facts and legal position. The decisions are also to be analysed in the light of the order of the ITAT. | |
| (iii) | (a) Authorization by CIT: The filing of second appeal is to be examined as to whether the same is filed mechanically by applying the monetary limits or on sound grounds after examining the merits of each order. | |
| (iii) | (b) The Committee should ascertain from the orders of each CIT (A) received during the FY 2013-14 by each administrative CIT under the jurisdiction of CCIT-I & CCIT-VIII Delhi, CCIT-I Ahmedabad, CCIT-II Hyderabad the percentage of appeals filed by the Department in ITAT where the tax effect exceeds monetary limits. | |
| (iv) | The success rate of appeals filed by the Department/Assessee before the ITAT to be analysed. | |
| (v) | The Committee must also take inputs on relevant issues from DRs in the stations mentioned in Para 5. |
8. The Headquarters of the Committee will be in Delhi.
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Source: www.taxmann.com
