Tax Dispute Management: Dear FM, Routine Measures will not help!

A dispute between the Department and Tax Payer arises either on facts or on law. In case of dispute on facts before CIT (A), the dispute shall end before the CIT (A) by ensuring adequate representation by both the Department and the assesse and also affording opportunity to furnish further details and evidences to arrive at consensus on the facts of the case. And such consensus arrived on the facts shall be binding on the Department if not on the assesse. In order to defend its case before the CIT (A), the Department shall nominate independent officer as Authorised Representative before each CIT (A). It will also facilitate not only the CIT (A) but also to regular Commissioner to take his help in proper appreciation of the facts and law in the disputed case. In case of short of officers to post before the CIT (A), the Department may utilize the services of competent retired officers by nominating as Authorised Representatiave before the CIT (A). So that there cannot be further litigation from the Department on the facts of the case before the Tribunal.

In respect of dispute on application and interpretation of law on the consensus facts of the case, in case the decision of the CIT (A) is not acceptable to the Department, decision to file an appeal before the ITAT shall be taken independently by the Commissioner. In practice no Commissioner would like to deviate on the opinion given by the Assessing Officer and Range Head, procedure of calling for report on the adverse appellate order shall be discontinued, which also saves time and manpower of the Department. Thus further litigation on law on the consensus facts can be minimized if not avoided.

Dispute on facts necessarily should end with the finding of Tribunal. Many a times cases are remanded back to the Assessing Officers to verify the facts of the case. A provision be made not to remand the case again to the Assessing Officer. If necessary it shall be remanded to the CIT (A) in case of failure to arrive at consensus on facts before the CIT (A). In any case, Tribunal shall not remand the case before the CIT (A) on application and interpretation of law on the facts of the case.

In case of any perverse findings or mistake in application of law on facts by the Tribunal, a provision to be made for filing a review petition before the Special Bench of the Tribunal to avoid filing of appeals before the High Court. This will also act a check on frivolous orders and minimize issue of faulty orders by Tribunal Members. Further appeal against the decision of the Special Bench on application and interpretation of law shall be filed by the Department only in case of erroneous in literal interpretation of the provisions of law or where the decision is contrary to the prevailing decision of any High Court or Supreme Court . The decision for filing an appeal before the High Court shall be taken by the Chief Commissioner independently based on the opinion of the Commissioner in charge of the Departmental Representatives. In case the decision of the Special Bench is not erroneous in literal interpretation and it is against the intention legislation or resulting in huge loss to the revenue in large number of similar cases, a reference to be made to the Board for either for issuance of proper clarification or suitable amendments to the Act to ensure intention of the legislation is carried out by the said provision of law. This will minimize filing of appeals not only before the High Court but also before the Supreme Court by the Department.

Further, immediately on filing of a case before any High Court against dispute on interpretation of law, the Board shall refer the said issue to a Committee, which shall consider feasibility of continuing litigation or to settle interpretation on a particular provision of law by suitable instructions, notification or amending the provisions of law, so that there cannot be any more ambiguity of law in the minds of the tax payers and further litigation on the said provision of law can be avoided.

V.G. Irkal

vasantirkal vasantirkal 04/06/2015