The Income Tax Department has drawn up an aggressive litigation management strategy for 2026-27 with a view to speeding up disposal of tax appeals. The new drive will focus on high-value disputes, and cutting long-pending legacy cases despite substantial vacancies in appellate authorities.
It has disposed of over 2.24 lakh appeals in FY26, substantially higher than the 1.79 lakh fresh appeals instituted during the year, bringing down pending appeals to 4.95 lakh from 5.4 lakh a year earlier, according to the Central Action Plan (CAP) 2026-27.
The litigation management framework focuses on expediting disposal of appeals pending before first appellate authorities, improving representation before the Income Tax Appellate Tribunal (ITAT), and strengthening judicial coordination.
Redefining Legacy
Under the revised framework, appeals instituted up to March 31, 2022, will now be classified as “legacy appeals”, expanding the scope from the earlier cut-off of September 2020. The department said higher weightage points would be assigned for the disposal of such old cases to incentivise faster clearance.
The plan also seeks a sharper focus on high-demand litigation. Appeals involving disputed tax demands above Rs 5 crore have been categorised as “O-1”, while a separate “T-category” has been created for top high-demand cases identified system-wise for each appellate authority.
Targets and Accountability
To improve accountability, the tax department has prescribed detailed Key Result Areas (KRAs) for appellate officers. Faceless Commissioners (Appeals) have been tasked with disposing of 725 appeals each, including priority top-demand cases, by March 2027, while JCIT(A)s have targets of 800 appeals.
The action plan also mandates the quicker submission of remand reports, time-bound disposal of Black Money Act appeals, quarterly monitoring of pending matters, and the preparation of updated master lists of appeals pending before the ITATs, High Courts, and the Supreme Court.
Additionally, the National Faceless Appeal Centre (NFAC) has been directed to prepare a comprehensive standard operating procedure by June 30, 2026, to facilitate faster adjudication, including mechanisms for handling legacy appeals lacking digital records and incentive schemes for high performers.