Income Tax (IT) disputes pending as on 31st March 2019 for the Central Board of Direct Taxes aggregated to Rs 5.71 lakh crore. While the proportion of the new appeals rises, the disposal of these appeals has diminished from the previous year, as per report for FY20 by CBDT. The number of cases disposed was 1.20 lakh during FY19 while there were 1.23 lakh in previous year. There were 1.41 lakh new appeals in FY19 while there were 1.17 lakh in the previous one.
The action plan for the CBDT aims at disposing of all the pending cases. They want to dispose of all the cases where IT demand is Rs 50 crore or more and are also looking at the needs of small taxpayers where the demand is less than Rs 2 lakh. About 90% of the cases with smaller demands are to be disposed of in FY20.
If taxpayers disagree with the I-T demands raised on them, a particular structure is followed. The first level comprises of CITs-Appeal, operating within the organisation. Orders passed by them can either favour the taxpayer or the I-T department, based on the evidence and facts.
The next level involves appeal filed with the Income Tax Appellate Tribunal, an independent judicial body. Appeals against the orders of this can be filed only if there is a question of law.
CBDT releases its action plan on annual basis. Last year's plan was criticised it could have proven to be harmful to taxpayers. Current year's action plan is free of any such disproval.
However, there is a need to create "talent pools" in all regions by senior officials, of I-T cadres having expertise or domain knowledge in certain sectors or I-T problems. These officials can help in representations in high stake cases before CITs-Appeal or tax tribunals and courts. Similarly, at national level, talent pool of people with super specialisation in any sector or problem should be created by legal and research directorate.