Good news for taxpayers! Income Tax grievances to be addressed in 2 months

New Delhi: Taxpayers facing "high-pitched" assessments or unfair scrutiny by the Income Tax Department can now attempt to get their grievances redressed in a short time before undertaking the arduous litigation route of courts or other appellate mechanisms.

In a maiden initiative, the Finance Ministry, through the Central Board of Direct Taxes (CBDT), has asked the department to create "local committees" comprising senior officers in each region, and has directed them to dispose such grievance and complaint petitions "within two months" from the end of the month in which such a petition is received.

These committees are expected to become functional across the country from next month.

"The CBDT has asked the taxman to constitute these committees in all the Principal Chief Commissioner ranges of the country. It is expected these will begin functioning from the middle of next month," a senior official said.

A taxpayer, who feels unsatisfied by an order of a tax assessment officer or thinks it is irrational, can petition the committee which will be publicised in the media by the respective tax regions, the official said.

The local committee of chosen tax officers will examine "whether there is a prima facie case of high-pitched assessment, non-observance of principles of natural justice, non-application of mind, gross negligence or lack of involvement of assessing officer".

"The committee would ascertain whether the addition made in assessment order are not backed by any sound reason or logic, the provisions of law have grossly been mis-interpreted or obvious or well-established facts on records have outrightly been ignored. The committee would also take into consideration whether the principles of natural justice have been followed by the assessing officer."

However, the CBDT has made it clear that these committees "in no way, can be considered to be an alternative or additional appellate channel" but are being created to effectively and efficiently deal with genuine grievances of taxpayers and "help in supporting an environment where assessment orders are passed in a fair and reasonable manner."

The senior official said if a taxpayer is not happy with the assessing officer's order, the normal way is to approach the Commissioner of I-T (Appeals) and subsequently appeal to the Income Tax Appellate Tribunal, High Court and finally the apex court.

"But with this new mechanism in place, department expects taxpayers will get faster solution to their problems rather than the long time that these procedures and hearings take," the official added.

In case the committee finds that a said order has been un-reasonable or high-pitched, it would submit its report to the senior most I-T officer in a given range who would then decide on taking a suitable administrative action in this regard.

"Further, departmental position as determined by the local committee in such cases would be appropriately presented before the Appellate authorities so that litigation is curtailed," the order said.

The new mechanism has been created by the CBDT after it found that the tendency to frame high-pitched and unreasonable assessment orders is "still persisting" in the department due to which grievances are being raised by taxpayers.

"Such (high-pitched scrutiny assessments) grievances not only reflect harassment of taxpayers but also leads to generation of unproductive work for department as well as appellate authorities," the order said.

The new mechanism is part of the CBDT's initiative to make tax processes and procedures fair, objective and rational.