New Delhi, Feb 13 (PTI) The Central Board of Direct Taxes has constituted two new committees of its officers to suggest ways for better litigation management in the Income Tax Department and also to examine the best global practices in this domain.
The first committee, headed by an officer of the Commissioner of I-T-rank, has been given a four-point agenda or the ‘terms of reference’ to suggest ways to reduce and streamline litigation issues facing the department.
The five-member committee has been asked to submit its report to the CBDT, that frames policy for the tax department, within a month.
A senior official said the panels have been formed after a conference on legal issues between the CBDT brass and tax officials in January.
As per the terms of reference accessed by the PTI, the committee will examine “suggestions/issues on litigation management emerging out of the conference and to report on the solutions and the way forward on such issues”.
It will also examine cases where the Income Tax Appellate Tribunal (ITAT) has “passed perverse or irregular orders” or where the submissions of department representatives (DRs) have not been recorded by ITAT, and to be appropriately taken up with President of ITAT and the Law Ministry.
The committee, as per the CBDT order, will also look into the “feasibility” of creation of separate benches of the ITAT for international taxation cases, at places where the pendency of such cases is high/above a threshold limit and analyse if the posts of junior DRs could be revived in view of “shortage” of DRs in the ITATs.
The second committee, that will have four members headed by a Commissioner-rank officer, will “examine how the international good practices on tax disputes and the diagnostic tool could be used for tax litigation management.” This committee will also submit its report to the Board within a month, the order said.
The CBDT, in the recent past, has undertaken a number of steps to ensure that litigation remains at the minimum in the tax department. This include hiking the threshold limit for the tax department to file appeals in tribunals and courts.
The Board, in its official action plan for 2018-19 issued last year, had said litigation in the department has assumed “grave proportions”, and has resolved to bring these issues to the minimum.
“Litigation is not only a cost on the credibility of a tax administration system but also an indicator of the robustness and fairness of a system of taxation. Litigation has been rising over the years and has now assumed grave proportions…,” it had said.
The CBDT action plan had said that the demand “involved in appeal” before the first appellate authority of the department (Commissioner of Income Tax Appeals)– as on April 1, 2018– is Rs 6.38 lakh crore.
Out of this amount, higher appellate bodies like the ITAT, high courts and the Supreme Court have stayed a demand of Rs 87,035 crore, till the same time period, it said.
“Such high volume of litigation has resulted in rendering a huge amount of tax as uncollectible. Besides, it is a major impediment towards creating an environment of tax certainty for taxpayers. It also involves infructuous costs on account of efforts to realise taxes blocked in these appeals,” it said.
It had said that the “substantial progress” made last year on this subject is required to be continued with renewed vigour so as to bring down the quantum of litigation and un-block the revenue involved.
This is published unedited from the PTI feed.