The Hindu Business Line : For smoother appeals

With a plethora of appeals filed over a period of time, the pressure of performance before the CIT(A) has increased tremendously. Complexities in business transactions have also compounded the problems

The First Appellate Authority, namely, the Commissioner of Income-Tax (Appeals), is a crucial limb in tax litigation.

A case well represented before the CIT(A), and dealt with successfully, would more often than not ensure finality on the issue on appeal. Conversely, cases dealt with shoddily before the CIT(A) can result in the additions being confirmed; and it is a Herculean task to get them reversed at the Tribunal stage and thereafter.

Hence, assessees are required to be thorough on facts and law while representing cases before the CIT(A). With a plethora of appeals filed over a period of time, the pressure of performance before the CIT(A) has increased tremendously. Complexities in business transactions have also compounded the problems since one needs to understand the nuances of business before understanding the issues on appeal.

The process

Under Section 246 of the Income-Tax Act, any assessee aggrieved by the order of the assessing officer can file an appeal before the CIT(A). The process involves preparation of the statement of facts and the grounds of appeal in a designated form and filing the papers in the office concerned. Personal hearing is conducted and, thereafter, the CIT(A) passes the order. Tax experts generally advocate two approaches while dealing with the CIT(A).

The first advocates preparing a detailed statement of facts and making the grounds of appeal as elaborate as possible so that the narrative part of the appeal is so comprehensive that a personal hearing becomes redundant.

The other approach is to make the written part brief and concise and reserve the main arguments for the personal hearing. Much can be said on both approaches, as these are merely a question of strategy. Quantitative yardstick is applied for evaluating the performance of the CIT(A).

In other words, the number of cases, and not the quality of orders, is the basis of performance. Gone are the days when well-drafted orders of the CIT(A) were scrutinised by the Chief Commissioner and even sent to the CBDT as a matter of appreciation.

As in the world of business, where top line growth is the basis of performance, the CIT(A)'s performance is evaluated on the basis of number of cases disposed of. There are, of course, exceptional orders of high quality that unfortunately go unnoticed.

Re-engineering the process

Time has come to use the e-mail facility to conduct appellate proceedings. Once the papers are filed in the office of the CIT(A), an e-mail questionnaire can be sent to the assessee seeking additional details or particulars that are not covered by the statement of facts and grounds of appeal. Assessees can respond via e-mail and provide the information required.

If the relevant facts and accompanying statements are in order, the CIT(A) can dispose of the case without personal hearing. If such a process requires amendments to the law, then so be it. After all, if whatever is required is communicated through e-mail why should there be a need for personal hearing on routine matters?

It is said that the body language of the assessee plays a role in deciding some of the issues. Such cases can anyway be decided through personal hearing. Commuting and parking of vehicles is a major problem in the metros, with traffic jams adding to the woes.

Unless absolutely essential, assessees need not be personally present, especially if the papers are foolproof. Standard paragraphs and reproduction of circulars/case laws can always be preserved in the system and retrieved by the touch of a button.

Also, appellate orders can be communicated to the assessees and physical delivery undertaken only as a part of regularisation. If the aforesaid issues are addressed, there is bound to be qualitative improvement in the appellate proceedings. And the corridors of the office of the CIT(A) will be less crowded than what it is today.

(The author is a Chennai-based chartered accountant.)

More Stories on : Taxation | Courts/Legal Issues

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Trading by SAFTA norms

O, in what sweets dost thou thy sins enclose!

For smoother appeals

Retrospectively unfair

Huff and puff over PF

Tackling extremists

Economic growth is about better life for individuals

Taxing windfall gains