The tax department has set an ambitious target to dispose of as many as 1.33 lakh appeals lying before the commissioners-IT (CIT-A), almost double the resolutions achieved last year, with a sharper focus on settling high-value disputes, reports Siddhartha P Saikia in New Delhi. Currently, about 2.6 lakh cases, including about 74,000 high-value ones, are stuck at the CIT-A level, the first recourse for a taxpayer in case the department seeks a higher tax than she thinks is due.

According to tax experts, if the FY-17 target for settling disputes at the CIT-A level is achieved, cases involving “tax effect” (the difference between the liability assessment of the taxman and the taxpayer) of over $1 billion could be resolved.

North Block also wants tax officials to devise and pursue “region-specific strategies” when it comes to settling disputes.

“The record targets set by CBDT for disposing of appeals pending with CIT-A this year is laudable and is understood to be set on a scientific basis given the automation in the revenue administration… This in simple terms is believed to take into account the number of CITs available (350-370) and a target disposal plan on a monthly/ annual basis for each CIT,” said Aravind Srivatsan, partner (direct tax) at PwC India.

“Further, it is also understood that a point system has been introduced for each CIT with higher points being allocated for disposal of old appeals and high-value/complex cases, which will incentivise faster appeal disposal,” Srivatsan added.

Our Finance Minister Mr Arun Jaitley said the tax department is moving towards a lower tax regime with non-litigious approach. Thus, while compliant taxpayers can expect a supportive interface with the department, tax evasion will be countered strongly. There are about 3 lakh tax cases pending with the first Appellate Authority with disputed amount being Rs 5.5 lakh crore.

“No penalty in respect of I-T cases with disputed tax up to Rs 10 lakh will be levied. Cases with disputed tax exceeding Rs 10 lakh will be subjected to only 25 per cent of the minimum of the imposable penalty for both direct and indirect taxes,” he said.

Mr. Arun Jaitley said any pending appeal against a penalty order can also be settled by paying 25 per cent of the minimum of the imposable penalty.

However, persons charged with criminal offences under specific Acts are barred from availing this scheme.

In addition, some appeals might also be withdrawn where taxpayers decide to opt for the tax dispute resolution scheme offered in the latest Union Budget, which should result in withdrawal of appeals and allow time for the CIT for further disposal of cases, explained Srivatsan.

“A region-wise approach will help address the underlying issues in a focused manner and hopefully help in an early resolution of the tax issues, many of which may be peculiar to an industry or a sector in a particular region,” said Vikas Vasal, partner (tax) at KPMG in India.

Source: The Financial Express

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