Tax Experts Propose Reforms for Quicker Disposal of Pending Appeals and Reduced Compliance Burden

Last updated: 30 October 2024

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Tax experts are proposing significant reforms to the Income Tax Act to speed up the resolution of over 580,000 pending appeals and reduce the compliance burden, particularly for MSMEs. Key suggestions include clearing cases within 1-2 years, clarifying the 45-day payment rule for MSMEs, and offering more flexibility for taxpayers to settle disputes. These changes aim to improve tax administration efficiency and ease financial pressure on businesses.

As part of the ongoing review of the Income Tax Act, 1961, tax experts are calling for significant reforms, including faster resolution of pending cases at the Commissioner of Income Tax (Appeals) level, reduction of compliance burdens on MSMEs, and greater flexibility for taxpayers to settle select litigation cases. The Ministry of Finance recently issued a notification outlining its direct tax policy focus for the medium term, which includes phasing out tax incentives and rationalizing tax ra

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FAQ :

There are over 580,000 pending cases with the Commissioner of Income Tax (Appeals), with some cases taking over six years to resolve due to delays in hearings and orders.

Experts suggest a phased plan to clear pending cases within 1-2 years and potentially increasing the number of adjudicating commissioners. They also propose time-bound disposal of appeals under the faceless regime.

The proposals aim to ease the compliance burden on MSMEs, particularly by clarifying the 45-day payment rule which impacts their working capital and the tax deductions for larger businesses.

Experts recommend amending Section 270AA to allow taxpayers more flexibility to settle specific disputed orders, rather than being compelled to contest or settle all of them.

Yes, experts suggest extending the carry-forward of tax losses to all sectors, not just industrial undertakings, to provide relief for businesses undergoing amalgamation, including the service sector.

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CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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