Union Finance Minister Nirmala Sitharaman has directed the Income Tax Department to analyze court cases it has lost over the past decade to derive lessons and minimize litigation disputes, official sources reported on Monday. The directive was issued during a recent high-level meeting between the Central Board of Direct Taxes (CBDT) and senior tax officials in Delhi.
Sitharaman emphasized the need for the department to audit cases won and lost in high courts and the Supreme Court, with a particular focus on understanding why cases were lost. This analysis will help identify areas for corrective action, ultimately reducing litigation between the tax department and taxpayers.
The Finance Minister also called for a detailed study of the duration of pending cases and the time taken for their resolution, as part of broader efforts to streamline legal proceedings.
Additionally, Sitharaman requested the CBDT to compile a list of expert tax law advocates to effectively represent the department in judicial forums, including the National Company Law Tribunal (NCLT), where insolvency matters are addressed. The move follows concerns raised over the performance of the department's current legal representation.
The IT department has recently raised the minimum threshold for filing appeals at various tribunals, high courts, and the Supreme Court, aligning with the government's objective of reducing unnecessary litigation. Sitharaman first announced this policy in her July Budget speech, with the CBDT reinforcing that appeals should be merit-based rather than driven solely by monetary thresholds.
In a move to improve accountability within the department, Sitharaman approved a proposal to print the name of the assessing officer on faceless assessment orders. This change aims to foster greater ownership of decisions among tax officials.
The Finance Minister's meeting also discussed merging the roles of Jurisdictional Assessment Officers (JAOs) and Faceless Assessment Officers (FAOs) to streamline the workload and improve efficiency in the tax assessment process. Additionally, there were calls to rename the "faceless assessment" scheme to reflect its technological advancements, as the term "faceless" carries negative connotations in Hindi.
The directives from Sitharaman highlight the government's commitment to reducing litigation, improving legal representation, and enhancing the efficiency and transparency of tax administration in India.
CAclubindia
