If all goes well, the Income Tax Appellate Tribunal (ITAT) may soon be able to fast track the process of tax hearing and prioritise the hearing of cases under appeal before it for certain categories of people, including senior citizens and salaried employees.
The Committee set up on the revision of ITAT rules has released the new ITAT Rules, 2017 in place of the existing ITAT Rules, 1963.
Tax experts say that these draft rules are a welcome step and, if implemented, will help in transforming the litigation problems currently faced by taxpayers in India. These rules have currently been placed in public domain for inviting suggestions and comments from the stakeholders.
Although the Committee has suggested many changes, we are taking a look at some of the major changes:
# Mandatory listing of stay applications on Friday, as long as these are filed before Wednesday
# Mandatory hearing of rectification petitions within 4 weeks of filing
# Expert’s depositions permissible as additional evidence
# Orders to be uploaded within 24 hours of pronouncements
# Emailing of orders and text alerts about adjournment and pronouncements
# Out-of-turn hearing in the cases of salaried employees, charitable institutions, senior citizens, taxpayer who has passed away, cases where issue in litigation has already been dealt with higher courts, other ITATs, in case undue hardship is caused to the taxpayer due to pending appeal, etc.
# Any ground can be taken up, on the issue in appeal, by the respondent even one day before hearing as long as the other party informed a week before – old rule 27 strengthened
# Ordinarily no more than 5 adjournments in a case
# E-filing of appeals with effect from a date to be notified by the President
# Appeals of persons more than 80-year old to be taken on priority basis in all cases
# Adjournment requests to be filed a day in advance till 1.30 pm
# No orders to be passed beyond 90 days. In case of delay beyond 60 days, reasons for delay to be recorded by the bench on case file
# Notice will be sent by email
# Tribunal empowered to award costs for adjournments
# Hearing of appeal by video conference shall be at the option of the assesse
# Paper book is to be filed in digital form for hearing on video conference
# Power is given to senior member to hear the appeal out of turn basis
“Primarily the changes which would impact the tax payer positively are the prioritization of hearing of cases under appeal before ITAT for senior citizens more than 80-year old, salaried employees, charitable institutions, etc (as mentioned above). Besides these persons, committee has also suggested to give ITAT judges power to hear the case on out-of-turn basis if an application is filed by the taxpayer,” says Gautam Kapil, Chartered Accountant, V K Kapil & Co.
The use of technology will be a landmark change in the functioning of the tribunal as currently if one files an appeal, it normally takes 1-2 years for the case to come up for hearing. “With the newly-prescribed draft rules, it would fast track the process of tax hearing and result in ease of litigation in India before the Income Tax Appellate Tribunal, although, we have to wait until these draft rules are implemented,” says Gautam.
However, with the acute shortage of judges in ITAT along with the several backlog of cases pending, there is a lot which is still required to be done by the income tax authorities.
Another important development is the hearing of appeal via video conference. This would clear a lot of pending cases, especially in small towns and cities where due to lack of members/ presiding officers in ITAT, cases are adjourned for months together — more than a year in some high-profile cases.
E-courts and filing of appeal in digital form are the future of litigation. Hearing conducted through webcast would also reduce the hardship which was being caused on small taxpayers. It would also be helpful for senior citizens, salaried employees and other persons who due to some reasons are not able to attend their case hearings. They would now be able to do so through the video conference.
Currently, the paper form is still a preferable form for receiving notices, orders or any communication from the ITAT. Therefore, many times the communication is lost in transit or change in physical address of the person, leading to unnecessary adjournment in hearing of cases. “With these prescribed changes, the taxpayer will now be able to receive notice or any other form of communication via WhatsApp, receive orders through e-mail and get information about adjournment and pronouncement of orders through SMS,etc. This will reduce the harassment that is caused by the staff in giving a copy of these orders/ notices and asking for gratification in return from the taxpayer,” informs Gautam.
Admission of additional evidence, including deposition by an expert, can now be admitted by ITAT, at its discretion. This is another welcome step, as it is in line with the quasi-judicial powers ITAT enjoys like a lower court.