Chartered Accountants Association, Surat

Ref: CAAS/Representations/2022-23/09 Date: 10-03-2023

To,
The Finance Minister,
134, North Block,
New Delhi – 110011

Subject: Oblivious status of appeals before CIT(A)

Respected Madam,

We are an association of Chartered Accountants based at Surat, representing the hardships arising undertaken under various taxation laws, out of the professional work of Chartered Accountants, their employees, their clients and employees of their clients (hereinafter referred to as the “Stakeholders”).

Issue:

Appeals filed half a decade ago (and even a decade ago in some cases), are yet to decide the fate of the taxpayer who is anxiously anticipating a favourable outcome. To show hope of justice is a good thing, but to linger one or rob the hope out of them is the most deplorable act of all. Such is the situation of the taxpayers who had filed appeal, which is their legal right to protect their interests, irrespective of the outcome. The number of such hapless taxpayers is on a rise and has already surpassed half a million. On the other hand, disposal of cases is snail-paced.

Litigation Pendency

Source: Report No. 29 of 2022 – Union Government, Department of Revenue Direct Taxes which can be found at https://cag.gov.in/en/audit-report/download/117824

Kindly note that the number of pending litigations are all time high in the last 5 years. Also, there is a substantial increase in the number of litigations in FY 2021-22 and FY 2022-23 not sufficiently complemented by disposal of such appeals.

Amount locked up in First Appeal Cases (in Cr)

Financial Year

Amount Locked up in Appeal Cases (in Cr) Appeal Cases due for disposal (in Lakhs) Blockage per case (in Cr) Increase
in %
2016-17 6,11,227 4.59 1.33
2017-18 5,18,647 4.58 1.13 85
2018-19 5,62,806 3.39 1.66 125
2019-20 8,83,331 3.04 2.91 218
2020-21 24,64,610 2.90 8.50 638

With the rising number of pending litigations, the amount locked up in appeal cases has almost quadrupled in recent times, such that the Blockage per case has gone up more than 6 times.

It is interesting to note that FY 2020-21 was the year of implementation of the new income tax portal and also the year of shift of faceless assessment from earlier portal to the new portal. on one hand, the portal glitches are highly responsible for creation and pile up of the aforesaid cases, due to faulty processing of returns, while on the other hand, the “not so favorite” faceless assessment/faceless appeal, amongst the department officials, is pictured as faulty and futile to tackle the situation.

We understand that the Government has taken up the matter of faceless assessment and faceless appeals as a noble gesture to remove corruption, yet those forces which feel threatened by the very idea of powerlessness, have resorted to actions which may soon result into collapse of the whole appellate structure under Income Tax, if not timely intervened.

It is sensitive when once sees former CJI shedding tears on this dismal situation, but when our Hon’ble Prime Minister Shri Narendrabhai Modi is keen on bringing Judicial reforms, atleast those reforms which are already in your good hands can better be catered without any hustle viz. the pendency of appeal under one of your department – Income Tax. It is unfortunate that for GST too, time and again we had reminded GST council for allotment of tribunals. But GST Council under your able Chairmanship, is yet to yield fruitful results despite GST implementation which took place half a decade ago, and taxpayers in GST also are also feeling hapless.

There is a Slok from Bhagwad Gita in Chapter 18, Verse 28 which goes as follows:

अयुक्त: प्राकृ त: स्तब्ध: शठो नैष्कृततकोऽलस: |

तिषादी दीर्घसूत्री च कताघ तामस उच्यते ||

meaning

“The doer who is unbalanced, vulgar, obstinate, deceitful, malicious, indolent, despondent and procrastinating (Dirghasutri), he is said to be of the nature of dullness (Tamasik)”

With all the powers yielded with your office, miracles can happen if “Dirghasutri” attitude is shed away and tasks are taken up on a timely basis.

Our Representation:

We demand that

1. Pendency of undisposed appeals be reduced by timely and expedited hearings or based on submissions.

2. Turnaround time, if any, for disposal of appeals should be implemented strictly.

3. The wrong prima facie adjustments are being made by CPC and that increases the filing of appeal load substantially. This system of wrong CPC processing should be reviewed and the wrong adjustments should be withdrawn. Such appeals should be heard on pilot and priority basis.

4. Considering the actual disposal of cases only 50 cases per annum per CIT(A) has been disposed per annum. Hence, adhere to the quota of 50 cases per CIT(A) per month, allotted as per the existing quota system for CIT(A) atleast 600 cases per CIT(A) per annum, to reduce the pendency of First Appeals. Also, the proposal to empower JCITs/Ad.CITs to exercise powers of CIT(A) should be expeditiously implemented after passing of the Finance Bill.

5. Office of Appeals are severely understaffed. They should be sufficiently staffed by intra-departmental candidates.

In case of any assistance, your good office may contact us. We shall be glad to provide the necessary support, guidance and innovation for fulfilment of our demands. We hope our demands shall be met in full, impairing us not to follow up with your good office.

Thanks & Regards,

For Chartered Accountants Association, Surat.

Rasesh Shah | Lalit Hirpara
President | Secretary

Copy to: –

(1) Prime Minister,

152, South Block, Raisina Hills, New Delhi – 110011

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One Comment

  1. CA Shankar D Kurtakoti says:

    This condition is spreading everywhere. There is another problem – giving effect to orders of courts / ITAT – Refunds are not getting processed for years with AO blaming CPC and CPC blaming AO. Even CP grams grievance have not solved these problems.

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