The Income Tax Appellate Tribunal (ITAT) is the highest fact finding authority and the only specialised tribunal to decide on disputes between a taxpayer and the income tax department.
The Income Tax Appellate Tribunal (ITAT) is the highest fact finding authority and the only specialised tribunal to decide on disputes between a taxpayer and the income tax department. Accordingly, ITAT is the most important institution for dispute resolution in income tax matters.
In recent times, ITAT has been facing significant challenges in terms of large number of pending appeals, which is partly attributable to vacancy of posts of ITAT members and partly to age-old rules and procedures which have outlived their utility with advancement of technology and increase in tax disputes.
In order to bring functioning of ITAT at par with technological developments and to streamline the processes with an objective of speedy disposal of tax cases and reducing the pendency of appeals, the tribunal had set up a committee of three members to revamp the rules. On May 11, 2017, the committee issued draft new tribunal rules for comments. The new rules propose to bring in some very important changes in functioning of the tribunal and the way income tax disputes are resolved in India.
Provision of e-filing of appeals
With an objective to reduce paperwork and ensure e-governance, the government has already implemented electronic filing of income tax returns and appeal before first Appellate Authority. Moving towards the same objective, the new tribunal rules have also proposed to implement process of e-filing of appeals and applications before tribunal, communication of tribunal notices/ orders to concerned parties through e-mails and for mandatory uploading of tribunal orders and case status on tribunal website. The process of e-filing of appeals shall be introduced from a date to be notified by the president of the tribunal.
Priority for senior citizens
In order to reduce hardship of senior citizens, salaried individuals, charitable institutions, certain non-residents (who do not have income from business or profession), etc., and also considering that these appeals are not expected to involve complex time-consuming issues, the tribunal proposes to give out of turn hearing to such appeals. Similarly, it is also proposed that appeals involving those issues, which are already decided in taxpayers’ own case or identical issue in case of any other taxpayer decided by the Supreme Court, high court or the tribunal, will also be taken up for hearing on out of turn basis.
Categorisation of appeals
In order to streamline the process and assign matters to various tribunal members as per their expertise, the new rules also propose to list appeals before different benches as per their categories, namely international taxation and transfer pricing, appeals to be heard by single members and other appeals.
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Process of filing applications
Presently, there are no prescribed forms for filing stay applications, rectification applications, paper books, etc., and during course of hearing, tribunal benches are sometime unable to find relevant information for disposal of these applications. This results in unwarranted adjournments. The new rules propose to introduce new forms AT-1 to AT-4 streamline filing and disposal of these applications and to help tribunal members receive required information in an appropriate manner.
To ensure speedy disposal of cases and minimal pendency of appeals, it has been proposed that number of adjournments in a particular matter shall be limited to a maximum of five, leaving exceptional circumstances.
The writer is partner, Nangia & Co.