CBDT on Thursday constituted a six- member empowered committee to analyse the “efficacy” of the existing primary litigation mechanism and to suggest steps to reduce litigation at the dispute resolution foras in the Income Tax department.
The committee, which will be headed by a Chief Commissioner (I-T) rank officer with five Commissioners as its members, has been mandated to submit its report within eight weeks from today.
“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 forums,” the Central Board of Direct Taxes (CBDT) said in its notification.
The Committee, according to the terms of reference issued by CBDT, 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.”
A taxpayer, essentially, has a four-stage grievance redressal and litigation mechanism available beginning with an appeal to the Commissioner of I-T Appeals called CIT (A), further up to the ITAT and subsequently to the High Court and the Supreme Court.
CBDT, the apex policy making body of the I-T department, 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-Rs. 1 crore, between Rs. 1 crore-Rs. 10 crore and above Rs. 10 crore.
“This is the first time that the CBDT has constituted such an empowered panel to take stock of the present litigation management system in the I-T department. However, the new committee has been mandated to only look into cases handled by the first two foras or primary appeal mechanisms of CIT (A) and ITAT in the department,” said a senior Finance Ministry officer.
Under the exhaustive three-page terms of reference, CBDT has asked the committee to study the “success rate” of appeals filed by both the department and the assessee before ITAT.
The committee has also been asked to study threadbare the tax demand orders issued by its assessing officers and appeals filed by the department in these two foras.