How the upcoming budget can reduce pending tax appeals, ease financial burden on small taxpayers
Subscribe to enjoy similar stories. The government’s efforts to reduce tax-dispute litigation, especially for small taxpayers, have fallen short even after measures proposed in the previous four budgets. Some of these measures include faceless assessment schemes, Vivad Se Vishwas, appointment of joint commissioners at base appellate level for small-value appeals, and reduced timelines for reopening of past assessments.
Amid expectations the upcoming budget will address the issue, experts suggest steps such as reintroducing the faceless regime with personal hearings to handle complex cases, ramping up staffing, alternative dispute resolution mechanisms and mandating a one-year deadline to dispose of appeals. As per the Central Action Plan data, about 550,000 appeals were pending for disposal as of 31 March 2024 at the level of the Commissioner of Income Tax (Appeals) CIT(A), the first level of challenging tax demands. That’s an increase of 64% since FY19, when 335,000 appeals awaited disposal at the end of the year, according to data from EY India.
The numbers are especially of concern because faceless assessment at the CIT(A) level rolled out in 2020 was meant to quicken the process by eliminating the human interface, but the number of pending appeals has only increased since then (see graphics). Year after year, the number of new appeals lodged surpassed the number of appeals disposed of, adding to the backlog. The main reasons are limited staff and technological limitations, stakeholders said.
According to Ajay R. Vaswani, founder of Aras & Company, chartered accountants, it takes over a year to receive the notice for the first hearing in many cases. “Despite the introduction of the faceless assessment scheme aimed at
. Read more on livemint.com
