In a proactive move to alleviate the mounting burden of litigation faced by both the government and taxpayers, the income tax department has set ambitious targets for the resolution of appeals. With 285 appeal units spread across India, the department aims to streamline the appeal resolution process and has mandated each unit to submit a comprehensive report card to the board by January. This initiative precedes the finalization of measures slated for announcement in the upcoming budget.
Lingering Challenge of Appeals:
Recent data reveals a concerning trend where the disposal of appeals lags significantly behind the influx of fresh appeals filed annually. To counter this, the government is poised to introduce measures in the budget aimed at curbing litigation and enhancing efficiency in the appeal resolution process.
Escalating Appeal Backlog:
As of March 31, 2023, the number of pending appeals has risen to 5.16 lakhs from 4.96 lakhs recorded on March 31, 2022. Notably, more than 2.8 lakhs appeals have been pending for over three years, contributing to the persistent challenge faced by the income tax department.
Enforcing Rigorous Targets:
To expedite the disposal of appeals, the tax department has instituted strict targets for its officers. Each appeal unit is tasked with resolving a minimum of 450 appeals for the fiscal year 2024. Moreover, these units are mandated to dispose of all cases pending as of April 1, 2023, involving demands of ₹50 crore and above. Additionally, there is a compulsory resolution of all appeals filed prior to April 2020, especially if the demand exceeds ₹10 lakh. This strategic approach aims to address the backlog effectively and enhance the overall efficiency of the appeal resolution process.