Soon your tax appeals before the Income-Tax Appellate Tribunal (ITAT) will be decided in a month or two. The process at present takes as long as 6-7 years. Finding itself under the glare of international tax authorities and professionals, the tribunal, which is the face of the Indian tax judiciary, is planning to quicken its pace to match global standards.
It will soon put in place special benches, exclusively for deciding international tax disputes including transfer pricing issues. The bench, expected to have specialists in cross-border taxation, is expected to raise the quality of the ITAT orders.
The decision-taking process is already on a fast track. Pending appeals in small tax disputes are reduced to just 127 in Mumbai, as against five-digit figures a few years back. Even the large tax disputes need not wait for more than a year now. In centres like Kolkata and Bangalore and non-metros, appeals are decided in less than six months.
The ITATs decision to speed up the process is driven by the understanding that it is now closely watched by international tax bodies, tax journals and tax gurus like professor Klaus Vogel. The tribunals decisions are now reviewed in prestigious journals like Asia Pacific tax Bulletin, Amsterdam; Tax Notes International, US; and the Bulletin of International Standards, Amsterdam. With the international focus on it, ITAT feels the need to raise the bar to standards adopted by tax judiciary in developed countries.
The ITAT is waking up to the global reality that an efficient tax judiciary is a major factor in deciding the location of investments. While its reputation abroad is better than the judiciary in China, it lags behind the systems followed in developed countries where pending cases are less than 500.
Its long-term plan is to dispose of appeals as and when it is filed (in a week or so). The ITAT benches have already started moving towards this direction. The ITAT in Kolkata takes just a month to decide on an appeal.
The ITAT has streamlined the system by taking a few steps. It first identified all the securities-scam related cases to a special bench and freed other benches for taking up normal cases.
Similarly, appeals on identical issues were grouped together so that whenever such issues come up for hearing, they are heard and disposed of at one go. Also, it has undertaken a special four-weeks drive to clear old cases. During this period, only old cases were heard and decided. All cases related to Section 80 HHC of the IT Act were taken up on out of turn basis.
As a result, the number of cases pending, on an all-India basis, has come down to around 90,000, from about four lakh cases a few years ago.
Vimal Gandhi, president, ITAT, said, I look forward to a time when we will be able to hear the appeals the same month in which they are filed. He is certain that he will achieve this in a year or two.
However, in the process ITAT is facing a shortage of lawyers. It has suddenly discovered that there arent enough tax lawyers in the city. Often judges have to be politely told that the lawyer is busy in other courts, said an ITAT member. On an average, 15-20 cases are adjourned in a day because of non-availability of tax lawyers.
This, he said, is an opportunity to bright new comers. When the ITAT started an additional bench for small and covered issues, a whole new bunch of chartered accountants and lawyers who have never appeared before ITAT were seen appearing for clients.