The Hindu Business Line : Dispute resolution

In Hamlet, Shakespeare wrote “Give every mine thy ear, but few thy voice; Take each man's censure, but reserve thy judgment”. The Income-Tax Appellate Tribunal (ITAT), High Courts and the Supreme Court may not have the liberty to reserve judgment on the multitude of cases lying before them.

Unclear provisions in tax laws, some trigger-happy revenue officials and a general tendency to take on the law in some cases has made both the Revenue and the taxpayer litigious. The ITAT and the courts are attempting their best to clear the backlog of cases but the number of cases far exceeds the time and personnel needed to judge them. The Dispute Resolution Authority (DRA) Rules notified by the Central Board of Direct Taxes (CBDT) could provide some relief here.

DRA rules

The DRA will function from the top eight cities in India and would be a collegium manned by three Commissioners of Income-Tax (CITs) for whom this would be an add-on responsibility. The office of the Chief Commissioner of Income Tax (CCIT) shall act as the Secretariat for the DRA to do the administrative tasks of receiving all correspondences related to the DRA.

Aggrieved taxpayers wishing to seek solace with the DRA need to file a paper-book of their objections which should contain four copies of the draft order duly authenticated by the eligible assessee or his authorised representative.

In the case of draft assessment under sub-section (3) of Section 143 read with Section 144A, the objections shall also be accompanied by four copies of the directions issued by the Joint Commissioner or Additional Commissioner under Section 144A. And in the case of draft assessment under sub-section (3) of Section 143 read with Section 147, the objections shall also be accompanied by four copies of the original assessment order.

The Panel may, in its discretion, either accept the objections which are not accompanied by all or any of the documents referred to above, or reject it. Other provisions in the Rules are administrative in nature and clarify the processes with regard to notice for hearings, calling for records, hearing of objections, power to call for or permit additional evidence, issue and communication of directions, passing of assessment orders, rectification of errors and mistakes and appeals against the assessment order. Forms and the broad grounds of appeal that accompany the rules are simple to comprehend and file.

Direct Taxes Code

The much-discussed Direct Taxes Code (DTC) surprisingly did not attempt too many innovations at dispute resolution, retaining the sequential hierarchy of Commissioner (Appeals), ITAT, High Court and Supreme Court. It did make a mention of a National Tax Tribunal (NTT) which, one assumes, is the ITAT with a different name.

As appeals against the orders of the DRA too would land at the doors of the ITAT, ramping up the ITAT becomes critical. The ITAT has done yeoman service and rendered some path-breaking judgments over the years. The Authority for Advance Rulings (AAR) has also judged many a controversial tax case but the unbinding nature of that authority does not make it very popular.

The CBDT has the difficult task of ensuring that needless and repetitive cases do not appear before the DRA and the orders of the DRA are not appealed against with the ITAT for the sake of it.

More Stories on : Income Tax | Courts/Legal Issues | Reassessment

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