As many as 5,44,205 appeals were pending resolution with the Income Tax (IT) Department at commissioner (appeals) level as of January 31 this year, and 63,246 at various Income Tax Appellate Tribunals (ITATs), High Courts, and the Supreme Court, FE has learnt.
To be precise, the cases pending in ITATs were 20,266 High Courts, 37,436; and Supreme Court 5,544.
The large pendency is even as the Central Board of Direct Taxes (CBDT) has laid emphasis on disposing of income tax appeals in its 100-day action plan for FY25.
“Each Commissioner of Income Tax (Appeals) should focus on disposing of at least 150 appeals by June 30,” a senior official said. “This seems attainable, as an internal target would expedite the resolution process.”
The government has taken several initiatives in the past few budgets with an aim to speed up the appeal disposal time including the introduction of a parallel authority (Joint Commissioner of Appeal) at the level of CIT(A), however, backlog of cases has not reduced considerably, say experts while adding the latest number of pending appeals is an “eye opener”.
Amit Maheshwari, Tax Partner, AKM Global, says: “Once an appeal is filed before CIT(A) or ITAT, it still takes more than a year to receive the notice of first hearing and in some cases, even more which causes a backlog.”
“Hence, there is an urgent need to introduce a maximum time limit for deciding the appeals by ITAT and CIT(A),” he says.
Another reason for the pendency of appeals is the precedent based assessments conducted by the assessing officers. Assessing officers usually do not look at the tax issues with a fresh approach during scrutiny and try to conclude the case based on the decision in previous years, which leads to unnecessary tax additions in many cases and the issue ultimately travels to CIT(A) or ITAT adding to the appeal backlog, say experts.
Hence, some say, the government should bring in an amnesty scheme to offer a one-time settlement option to taxpayers, in the full Budget set to be introduced in July.
“The time and effort spent by corporate India and taxpayers on dealing with cases that may not result in any recoveries should be avoided,” said Kumarmanglam Vijay, partner, JSA Advocates & Solicitors.
“It may make a good sense to close previous chapters by an amnesty scheme and resolution mechanism and collect /refund the dues,” he said.
Gopal Mundhra, partner at Economic Laws Practice suggested the need to also increasing the strength in the judiciary, having a robust digital infrastructure and specialized benches for complex cases to expedite the system.
The Delhi High Court, last year, had asked the Centre to take appropriate measures for filling up all the posts of Income Tax Commissioner (Appeals) lying vacant, to aid in disposals of the pending appeals.
“The Union of India may also consider increasing the sanctioned strength of Commissioner (Appeals) substantially at least to the extent of 570 of such posts, to achieve the aims and objectives of the Central Action Plan which is formulated every year,” the High Court had observed. Till July 2023, about 230 Commissioners of Income Tax (appeals) were actively working against a sanctioned strength of 349.
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