Inordinate delay in revenue tax enchantment hearings

Justice delayed is justice denied – this can be a maxim said by William Gladstone, the previous prime minister of the UK within the nineteenth century, and infrequently repeated by eminent jurists through the years. Unfortunately, revenue taxpayers in India have turn out to be a sufferer of such denial of justice, because of the inordinate delay in deciding their appeals by the primary stage appellate authority, the Commissioner of Income Tax (Appeals), or CIT(A).

If an evaluation order is handed in your case, and you don’t agree with the tax demand raised by the tax officer, you may file an enchantment towards such order. Such enchantment is heard by the CIT(A), who can also be an Income Tax Department official. In case the CIT(A) order goes towards you, you may enchantment to the second stage of appellate authority, the Income Tax Appellate Tribunal (ITAT). If the CIT(A) had determined the enchantment in your favour, the Income Tax Department may file an enchantment towards such order on the ITAT. After the ITAT, increased appeals are made to the excessive court docket and in the end to the Supreme Court.

Till 2020, the primary appeals disposal course of was that one needed to bodily seem earlier than the jurisdictional CIT(A) for a listening to, and after listening to your arguments, it might move the enchantment order. This course of usually took about two years from the date of submitting the enchantment until the ultimate order.

In September 2020, the faceless enchantment scheme was launched, whereby all the enchantment listening to course of was moved on-line. Before the scheme might calm down, a few of its unfair provisions have been challenged by taxpayers earlier than the courts, as being towards the ideas of pure justice. For instance, solely written submissions have been to be supplied, with no proper of private listening to which might be by video-conference – and it might or will not be granted relying on the discretion of the CIT(A). The authorities subsequently introduced an amended scheme in December 2021, offering the precise of on-line listening to.

If we discuss in regards to the expertise because the amended scheme was launched, there have been only a few appeals disposed of thus far, even after written submissions have been made. Probably, lower than 5% of the pending appeals have been disposed of over the previous eight months. A telling statistic which proves the purpose – second appeals to the ITAT in Mumbai (the place the most important variety of appeals are filed) earlier took about 3-4 years for disposal, due to the massive variety of circumstances pending earlier than the Tribunal. Today, there’s hardly any pendency earlier than the ITAT, and issues come up for listening to inside six months of submitting the enchantment. This is due to the negligible variety of orders handed by the CIT(A) over the previous three years, which might usually have been appealed towards to the ITAT. A stage has come the place there would in all probability be no pendency in any respect earlier than the ITAT– this may already be the case in benches of the ITAT in different cities.

Unfortunately, there’s a full silence from the tax authorities on the standing of pendency earlier than the CIT(A), as to what has brought about the issue (know-how or process or manpower points) and what’s being carried out to sort out it. Pendency of appeals for over 4 years has turn out to be fairly regular. Taxpayers don’t have any recourse in looking for expeditious disposal, as a result of there is no such thing as a individual whom they will method asking for an early listening to.

Most of the taxpayers would have already got paid 20% of what would usually be a frivolous demand, not in accordance with the regulation, and have seen their hard-earned cash locked up. Unfortunately, numerous the appeals within the current years pertain to defective processing of IT returns by the Centralised Processing Centre, for which rectifications have been refused by that centre.

Faulty implementation of all the know-how course of, from processing of tax returns, rectifications and appeals, has brought about untold harassment to numerous taxpayers, with no aid in sight. The worst half is that there was no communication in any respect from the tax division as as to if the progress of the method is being monitored or not, whether or not the rising pendency earlier than the CIT(A) has been realized by the topmost ranges of the division, whether or not steps are being taken to take away the obstacles and smoothen the method, and by when taxpayers can count on their appeals to be heard.

Ideally, taxpayers ought to have a time-bound course of inside which their issues are handled. The least they count on is a course of, possibly on-line, the place they will test the anticipated date of listening to and disposal of their appeals or make an software looking for expeditious listening to of their lengthy pending appeals. Is this an excessive amount of justice to ask for?

Gautam Nayak is accomplice, CNK & Associates LLP.

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