The income tax department, known to be the largest litigant in the country, is working towards reducing the burden of court cases, a move which is in line with the National Litigation Policy mooted by the government last year. The department is mulling over an increase in limits above which it files appeals against tax evaders in the tribunal or courts, an official familiar with the development told .
“The department is planning to change the tax limits for appeals. Now, for filing an appeal in Income Tax Appellate Tribunal (ITAT), the tax effect should be Rs 3 lakh, for high courts it has been increased to Rs 10 lakh and for Supreme Court it is Rs 25 lakh,” the official said.
As of now, if the tax effect is Rs 2 lakh, the department can file an appeal in Income Tax Appellate Tribunal. If the tax effect is Rs 4 lakh, the appeal can be filed in high court and if the tax effect is Rs 10 lakh, appeal can be filed in the Supreme Court.
With the move, the income tax department expects to reduce up to 13 per cent cases at ITAT level and 25-30 per cent cases at high court and Supreme Court level each, the source added.
“Even if the case is strong enough to be taken to the tribunal, the department will not do so. This will cut down the wastage of resources in unnecessary litigation and reduce the burden of overburdened courts while at the same time assessee would also benefit from this policy,” the official added.
According to the National Litigation Policy, the government should work towards reducing litigation in courts so that valuable court time would be spent in resolving other pending cases. This will help in achieving the goal in the National Legal Mission to reduce average pendency time from 15 years to 3 years.
The policy envisages that government and its various agencies, which are the pre-dominant litigants in courts and tribunals in the country, should become efficient and responsible litigant.
The initiative by the income tax department comes in the backdrop of criticism by finance minister Pranab Mukherjee that the I-T department has emerged as the largest litigant in the country.
Last year, the Comptroller and Auditor General of India (CAG) had stated in its report that the disputed tax amount “can wipe off the revenue deficit of the government in 2008-09”.
The total amount of direct tax stuck at the commissioner (appeals) level is Rs 2.2 lakh crore for 2008-09, the CAG had pointed out.
Apart from that, Rs 12,757.59 crore is stuck at Income Tax Appellate Tribunal, Supreme Court and high court levels, the finance minister had told the Parliament last year.
* The department is planning to change limit for filing appeal in ITAT to Rs 3 lakh; for high courts to Rs 10 lakh and for Supreme Court to Rs 25 lakh
* Currently the limit for filing appeal in ITAT is Rs 2 lakh, for high courts — Rs 4 lakh and for Supreme Court it is Rs 10 lakh
* Even if the case is strong enough to be taken to tribunal, the department will not do so, sources in the IT department says
* The move is to cut down wastage of resources in unnecessary litigation and reduce the burden of overburdened courts