To help people expedite their pending tax appeal(s), the Central Board of Direct Taxes (CBDT) has come out with a new process. Under this, there are five situations where an individual or income tax assessing officer (AO) can make such a request for expedition.

Among the five, one particular situation stands out because experts say that it was newly introduced and may have unintended consequences. The situation reads out as cases where a VIP/PMO reference is received then CBDT will consider that particular case for ‘expeditious disposal‘.

A copy of the circular has been seen by ET Wealth Online, which was sourced from Taxmann. “This circular is not in the public domain and is an internal circular by CBDT to revenue officials,” says chartered accountant Chirag Chauhan, a practicing CA from Mumbai.

What are the situations when requests for expedited tax appeals can be filed?

According to Advocate D.C. Agrawal, former Commissioner of Income tax and retired member of Income Tax Appellate Tribunal, these new guidelines replace earlier guidelines issued vide letter F.No. 279/Misc./ M-102/2021 dated 29-12-2021.

According to Agrawal, the new guidelines (issued on March 7, 2024) say that only in the below-mentioned situations can a taxpayer or AO can file a request for expedition of tax appeal cases:

Experts say that the earlier guidelines mentioned a situation wherein individuals having a refund claim above Rs 1 lakh were eligible to file a request for expeditious disposal.

According to Agrawal, “One guideline present in the old guidelines (29-12-2021), that is where there is a claim of tax refund above Rs 1 lakh arising on the basis of return filed, the taxpayer can apply for expeditious disposal, is missing in the new guidelines. In its place a new guideline i.e. if a reference from a VIP or PMO is received, the appeal can be disposed of out of turn, has been provided. The omitted guideline can be included in the genuine hardships cases.”

There have been multiple cases that remain unresolved with the Income Tax Appellate Tribunal (ITAT) and others due to various reasons, and this causes hardship to individuals. Experts say that the latest guidelines aim to solve this problem.

According to Anand Bathiya, vice president, Bombay Chartered Accountant Society (BCAS), these new guidelines aim to help people expedite the tax appeal disposal process. “Generally, when an individual files an appeal they have to deposit the tax amount in dispute and it can result in a huge financial burden if the tax appeal is stuck for a long time,” he says.

“To set a framework for priority/out of turn disposal of pending appeals at the level of CsIT(A/Au) and Addl./Jt.CIT (Appeals), it is decided that requests for such disposal of appeals, covering genuine and exceptional circumstances, raised at the instance of the appellant or referred to by the Assessing Officer/Range Head, may be considered by the Pr.CCsIT/CCsIT/DGsIT on the basis of recommendations of jurisdictional Pr.CIT/Pr.CIT(Central)/CIT(IT), in the following situations….,” CBDT stated in a circular dated March 7, 2024.

CBDT Circular

Source: Taxmann

How reference from a VIP or Prime Minister Office (PMO) can help in expediting tax appeals?

Experts say that even ordinary citizens of India can contact the PMO for filing such a request for expeditious disposal of their tax appeal cases. According to Chauhan, an ordinary individual can contact the PMO for expeditious disposal of their tax appeal. PMO can be contacted either by email or by posting a letter addressed to the PMO.

“However, it must be noted that the decision to give a reference for a particular case rests solely with the PMO,” says Chauhan.

Experts, however, have reservations regarding what might constitute a VIP for the purpose of this circular.

“Given that ‘PMO’ also includes the wing dealing with public grievances, there may arise a requirement to make such references. However, the direction to consider a reference from VIPs is unprecedented. Moreover, given the absence of the definition of the term ‘VIP’ for the purpose of Income Tax Act, it may lead to unintended consequences. It is also important to note that the preceding circular dated 29.12.2021 had no such stipulation to consider a reference from VIP/PMO,” says Gopal Mundhra, Partner, Economic Laws Practice, a law firm.

The new condition (VIP/PMO reference) may have been inserted to improve India’s global image, says experts. “The new condition i.e. VIP/PMO reference may have been inserted to improve India’s global image. The infamous Vodafone-Idea Income Tax case dragged on for multiple years, so if such a high-profile case comes in the future, then this condition (VIP/PMO reference) can help expedite the disposal of pending tax appeals. This condition can also help in cross-country or international cases, etc this will help put some matters in the fast track,” says Bathiya.

How can individuals file requests for expeditious appeal under other situations

The other four other situations when an individual can file a request for expeditious disposal of appeal include court directions, or a request is being made by senior citizens or super senior citizens or in case of any genuine hardship or in cases where the tax demand is more than Rs 1 crore.

“Individuals can go to courts and ask for a direction mandating the Income Tax Department to consider expeditious disposal of their appeals. Further a writ petition may also be filed under Article 226 and Article 32 to High Court or Supreme Court to quash any income tax assessments,” says Chauhan.

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