Despite mounting pressure from stakeholders and over 5 lakh pending appeals at the Commissioner of Income Tax (Appeals) [CIT (A)] level, the Finance Ministry has decided against introducing statutory deadlines for the disposal of income tax appeals under the proposed Income Tax Bill, 2025.
The Select Committee of the Lok Sabha, which reviewed the Bill, received multiple representations from tax experts and industry bodies urging the government to include a defined time frame for disposing of appeals. However, the Ministry has justified its position, citing the judicial nature of appellate proceedings and the risk of compromising the quality of adjudication if arbitrary timelines were imposed.
Judicial Proceedings Cannot Be Rushed, Says FinMin
In its written submission to the Select Committee, the Finance Ministry stated:
"For any appellate level, whether it be the Supreme Court, High Court, ITAT or CIT (A), time limits have not been provided as appellate proceedings are judicial in nature. Fast-tracking them without considering case complexity may not be desirable."
The Ministry emphasized that rather than statutory deadlines, improvements are being pursued through administrative measures, and notable progress has been made.
Administrative Push Leads to Record Appeal Disposals
According to the Finance Ministry, the year 2024-25 saw a record 1.72 lakh appeals disposed of, surpassing the number of fresh filings. This marked the first time that annual disposals outpaced new cases, thereby reducing the overall pendency as of April 1, 2025.
The Ministry reiterated that while there is no statutory deadline under either the current Income Tax Act, 1961 or the new Bill, the goal of timely and efficient appeal resolution is being addressed continuously at the administrative level.
Experts Question FinMin's Rationale
Tax professionals, however, expressed concern over the lack of statutory accountability. One expert noted that the Dispute Resolution Panel (DRP), which deals with international tax disputes and comprises three CITs, is mandated by law to deliver rulings within nine months.
"If a collegium of three CITs can be bound by time, why not a single CIT (A)? Timely relief is crucial for taxpayer confidence," the expert argued.
Another expert highlighted the ongoing issue of delays and ineffective prioritization. "Even petitions seeking early hearings are overlooked, as such requests have become commonplace. This leads to prolonged uncertainty for taxpayers and sometimes, rushed judgments to meet disposal targets," he said.
Call for Balanced Approach
While the Finance Ministry's stance underscores the importance of fair adjudication, the absence of any legal timelines continues to frustrate taxpayers. Many believe a middle path-such as reasonable statutory benchmarks combined with flexibility for complex cases-could improve both efficiency and quality.
As the Income Tax Bill, 2025 inches closer to becoming law, stakeholders will be watching whether the final version incorporates any mechanisms to address delays at the appellate level-a crucial step for restoring faith in the dispute resolution system.
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