Unsolved IT litigations pile up at CIT-Appeal level, CBDT focuses

Central Board of Direct Tax (CBDT) is set to focus on litigation management during the financial year 2019-20. It is reported that income tax disputes aggregating to Rs.5.71 lakh crore are pending at the level of first appellate authority as of 31 March 2019. The number has considerably come down in a year’s time from Rs.6.38 lakh crore.

In contrast, the number of cases pending before the Commissioners of Income Tax Appeal (CIT-Appeal) has increased from 3.22 lakh cases in the previous year to Rs.3.41 lakh cases in the current year. 

To tackle the situation, CBDT has framed an action plan for the financial year 2020 (FY20) and stated that they have laid down targets for disposing of cases with CIT-Appeal. The action plan is not announced in detail. They are focusing on disposing of all cases with an IT demand of Rs.50 crore and above.

Meanwhile, they have also recognised the needs of smaller taxpayers with dispute demand of less than Rs.2 lakh. Smaller cases, constituting up to 90% of the whole picture, is to be processed during the financial year.

The Bombay High Court had stated about incentivising CIT-Appeals that gets just orders in the action plan of 2018-19. When it comes to the current year’s action plan, it suggests senior officials create a talent pool of IT cadre in every region.

These officials, who have knowledge of specific sectors can represent high-stake cases at CIT-Appeals level, tax tribunals, and courts. 

Similarly, the action plan also requests legal and research directorate to create a talent pool at a national level. This pool must comprise officials who have specialised knowledge in specific domains.