Goa was the venue for the national conference of the Income Tax Appellate Tribunal (ITAT) held on July 12-13. The conference celebrated the 84th anniversary of the tribunal with members from various tribunal state benches arriving for the occasion together with judges as well as legal and tax experts. Quick adjudication of tax cases is the noticeable difference in the functioning of the tribunal in recent years. Here ITAT president, Justice CV Bhadang, who is instrumental in streamlining the functioning of the tribunal and ensuring speedy disposal of cases speaks to Shoma Patnaik, on a range of issues. impartiality in tax fair justice
Q. The ITAT is a success story having brought down the dockets of pendency from 3 lakh to 40,000 cases presently. How was this achieved?
The reduction is on account of the efforts taken by all the members of the tribunal and introduction of technology has also helped. Paperless courts as well as e-filing are contributed to reducing the backlog. Another important factor was the introduction of dual- conferencing and hybrid hearing. To share my experience, transfer applications for matters are exclusively dealt with by the president. There were several matters pending across the country, which I could hear by video conferencing. Every day I heard matters from Delhi, Kolkata, Chennai, etc. It reflects the strength that technology can give if appropriately used. The reduction in pendency is due to all these factors put together. However the role of the government by introducing schemes such as Vivadh se Vishwas, increasing the tax limit, among other measures is also important. I would say the overall efforts of the tribunal members coupled with the proper use of technology resulted in reducing the overall pendency.
Q. In Goa, about 60 per cent of the appeals to the tribunal are from institutions. What is the all-India trend?
At the all-India level, individuals comprise 70 per cent of the cases, but the stakes are comparatively higher in the remaining 30 per cent of the cases as it comprises corporate and institutional tax payers. The corporate appeals are concentrated in metropolitan cities like Delhi, Mumbai, and Ahmedabad. The smaller stations have tax disputes from small players. Corporate adjudication mostly takes place in the major tribunal centres.
Q. Is there a trend in the appeal outcome, viz. in terms of the decision going in favour of the tax payer or the IT department?
The trend would be mixed. We do not have any statistics as to whether it went in favour of the assessee or the IT authorities. The tribunal does not think in that direction at all. It gives justice. If the case of the assessee is justified naturally the case is in his favour.
Q. How does the ITAT plan to continue to do good work of further reducing the pendency?
We are looking at the developments which will happen in the near future. With the country making international strides it is likely that, tax disputes may increase. International tax disputes are likely to occur which may be comparatively more complex. So we are trying to see that there is expert domain knowledge developed in the field of international taxation and transfer pricing. At least the major centres of the tribunal must be equipped to handle such complex tax cases.
Q What are the challenges facing the ITAT in the coming years?
I don’t think there are challenges on the infrastructure front. By and large we are well placed for infrastructure. Of course there are bound to be vacancies in tribunal benches because of retirement. But we are ensuring that measures to fill up the vacancies are initiated well before the vacancies happen because the recruitment process also takes time. Keeping the state benches functioning at all times are the measures we are taking to see that the momentum continues.
Q. Faceless assessment is said to be one of the causes of increase in tax disputes. What do you think?
There are reservations on faceless assessment, but it is something to be addressed by the IT department and not the ITAT. Faceless assessment is not part of our work. The ITAT though is never faceless.
Q. What about more ease of doing business for tax payers who want speedy justice from the tribunal?
E-filing of appeals without coming to the tribunal office as well as hybrid hearings are part of EoDB. It is reflected in counsels from Delhi appearing in Mumbai or even smaller centres.
Q. Does the ITAT have a role to play in increasing tax revenues to the government?
The tribunal role has nothing to do with tax revenue. It cannot contribute to revenue or reduce it. Tax revenue is the responsibility of the IT authority. The ITAT is a quasi- judicial body that decides disputes between the assessee and the IT department. If the tax payer has a justified case the tribunal grants him relief. Tax revenue is for the Central Board of Direct Taxes and the revenue department to decide. The ITAT always ensures that broad justice is done which is in interest of both the government and the assessee. It cannot be one-sided.
Delhi tops in dispute cases filed with ITAT
The Income Tax Appellate Tribunal (ITAT) is a quasi judicial institution set up in January, 1941. It is the final, fact-finding authority in settling tax disputes under the Income Tax Act, 1961. Tax payers when they are aggrieved by an assessment order must first appeal to the Commissioner (Appeals). If they are not satisfied with the decision, they can appeal to a higher appellate authority, viz. the ITAT.
The orders passed by the tribunal are final. An appeal lies to the High Court only if a substantial question of law arises for determination. The tribunal carries out adjudicatory function similar to that of courts where appeals are filed, arguments are heard in an open court and judgments delivered.
Delhi, Maharashtra, and Gujarat are the top three states which have the highest appeals before the ITAT. In Goa a permanent bench of the tribunal was set up in October 28, 2024. The pendency before the tribunal in the state presently is about 390 cases. The two-member ITAT, Goa bench comprises G D Padmahshali and P Gadale.
