Bid to reduce tax litigation
The tax department hopes to cut down on repetitive appeals through the establishment of a collegium of senior tax officials which will use the changes proposed under new section 158AB in Finance Bill 2022.
The collegium will comprise two or more chief commissioners or principal commissioners or commissioners of income-tax.
Section 158AB works in the following manner:
- A question of law Q1A1 has arisen in case of an assessee A1 and A1 has received a favourable decision on Q1A1 from commissioner (appeals)
- For another assessee A2, the department’s appeal on identical question of law Q1A2 is pending before High Court or Supreme Court and the collegium is of the opinion that Q1A1 and Q1A2 are identical questions of law.
- In this situation, proposed section 158AB can be invoked by Revenue to defer the filing of appeal for decision on Q1A1 to the higher appellate authority in ITAT till a decision on Q1A2 is communicated to the assessing officer having jurisdiction over A1.
- Decision on deferment will be subject to acceptance by the assessee A1 that question of law in his case Q1A1 is identical to Q1A2 in the case of the assessee A2. The section comes into effect from April 1, 2022.
CBDT chairman J.B. Mohapatra on Friday speaking at an Assocham organised event said that the long-term expectation from this section is to unclog tax litigations at a faster pace.
As per CBDT data, the total number of litigations across appellate tribunals, high courts and Supreme Court has increased from 70,371 in 2015-16 to 1,24,287 in 2019-20. The pendency of cases before commissioner (appeals) was 82.2 per cent in 2019-20 covering an amount of Rs 8,83,331 crore.
The government wants new domestic companies to set up their manufacturing units in India fast and hence the concessional tax rate of 15 per cent has been extended by a year till March 2024, revenue secretary Tarun Bajaj said .
Meanwhile, Moody’s Investors Service said conservative budget assumptions leave room for the government to respond to prevailing macroeconomic and pandemic risks over the next year.