A reference from the Prime Minister’s Office or a VIP reference will help your Income Tax Appeal to be taken up on priority or out of turn disposal, Central Board of Direct Taxes (CBDT) has said in its new guidelines.

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The new guidelines, will replace the 2021 mechanism and will also set a framework for priority or out of turn disposal of pending appeals at the level of Commissioners of the Income Tax (Appeal/Appeal Unit) and Additional/Joint Commissioner of Income Tax (Appeal). New guidelines have listed five situations for priority or out of turn disposal. These include, ‘cases having demand above ₹1 crore, cases where a VIP/PMO reference is received for expeditious disposal, cases where request is made by senior citizens and or super senior citizens or any other case of genuine hardship.’ The 2021 guidelines also prescribed five situations, out of those, four have been retained while a refund of ₹1 lakh has been replaced.

Guidelines also mentioned that requests for such disposal of appeals, covering genuine and exceptional circumstances, raised at the instance of the appellant or referred at the instance of the appellant or referred to by Assessing Officer/Range head may be considered by the Principal Commissioner, Chief Commissioners or Director General of Income Tax. The recommendations need to be made by the Jurisdictional Principal Commissioner of Income Tax. In case of appeals falling under faceless Commissioner, it will be referred to the Principal Chief Commissioner.

Disposal of appeals have been the key focus of the appeal, as huge amounts of money demanded involved in cases pending before the Commissioner of Income Tax (Appeal). For example, earlier last year, Finance Ministry informed the Lok Sabha that over ₹14 lakh crore amount locked up in appeals at the end of Fiscal Year 2021-22. Similarly, Central Action Plan for FY24 mentioned while closing number of appeals at the end of FY23 was over 5.16 lakh, approximate pendency in respect of appeals filed prior to April 1, 2020, as on March 31, 2023 was over 2.82 lakhs.

The appeal mechanism says, if an assessment order is passed and the taxpayer does not agree with the tax demand raised by the tax officer, he can file an appeal against such an order. The first level of appeal is CIT(A), who is also an Income Tax Department official. In case the CIT(A) order goes against the taxpayer, then he can appeal to the second level of appellate authority, the Income Tax Appellate Tribunal (ITAT). After the ITAT, higher appeals are made to the high court and ultimately to the Supreme Court.

In order to make efficient and effective administration for disposal of appeal at the first level, the government launched the concept of Faceless Appeal in 2020 which was replaced by a new updated system next year. Under the overall supervision of the National Faceless Appeal Centre (NFAC), the faceless appeal system comprising of 285 CIT(Appeal) Units spread all across the country, has completely done away with the requirement of physical presence of the appellant.

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The board also fixes targets for disposal every year. For example, each Commissioner of Income Tax (Appeal/Appeal Unit) posted in Central and faceless appeal charges is expected to dispose of a minimum of 450 appeals (excluding Vivad Se Viswas Scheme or VSVS orders) for the financial year 2023-24. Similarly, each CIT(A) posted in IT (International Taxation and Transfer Pricing) appeal charges is expected to dispose of a minimum of 350 appeals (excluding VSVS orders) for the financial year 2023-24.

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