Reduction of Income Tax Litigation
| Date | 01 October 2016 |
| DOI | 10.1177/0019556120160414 |
| Published date | 01 October 2016 |
| Subject Matter | Article |
NOTEl
REDUCTION OF INCOME TAX LITIGATION
KRISHNA MOHAN PRASAD
1.
The litigation under the Income Tax Act has reached alarming
proportions leading to uncertainty in the minds
of
corporate and
non- corporate taxpayers regarding their final tax liability leading
to indecisions about investment decisions and huge compliance
cost, uncertainty about final
tax
coJlectible in the minds
of
Budget
making authorities and enormous administrative and legal cost.
As the present government
is
keen to reduce litigation, the CBDT
has constituted a six-member committee on July 17, 2014, to
recommend steps to reduce litigation.
2. One amendment in the Income Tax Act that would go a long
way in overhauling the entire tax administration and increased
collection
of
revenue,
improvement
of
Indian
economy,
reduction in administrative cost
of
the Income Tax Department
&
compliance cost
of
the tax payers, besides reducing frivolous
litigation,
is
to omit the provision regarding filing
of
appeal
by Principal Commissioner
of
Income Tax (PCIT) against the
appellate orders
of
Commissioner
oflncome
Tax (Appeals), i.e.
CIT (A).
To
overcom~
the cases
of
bad and perverse order
of
the
CIT (A), the power
of
revision u/s 263
of
the Income Tax Act,
1961,
in
such cases may be extended to the
Chief
Commissioner
of
Income Tax,
as
was earlier available to Commissioner
of
Income
Tax
(CIT) to revise the order
of
DCIT/IAC (Appeals).
The provision that provides for appeal-filing power and duty to
CIT
is
sub-section (2)
of
Section 253
of
the Income-tax Act, 1961.
Section 253(2) reads as: "The Commissioner may,
if
he objects
to any order passed by a [Deputy Commissioner (Appeals)]
[before the 1st day
of
October, 1998] [or, as the case may be, a
Commissioner (Appeals)] under [section 154 or] Section 250,
direct the [Assessing] Officer to appeal to the Appellate Tribunal
against the order."
3. Deletion
of
the provisions
of
Sub-Section (2)
of
Section 253
of
the Income Tax Act (and the corresponding provisions
of
other
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