Over Rs 12,000 crore in tax demands was locked on account of disputes, pending resolution at various courts, as on June 30, 2010, Parliament was informed on Friday.

While cases involving tax demand of about Rs 7,635 crore are pending in Income Tax Appellate Tribunal (ITAT), around Rs 3,849 crore is locked up in cases with High Courts, Finance Minister Pranab Mukherjee told the Lok Sabha in a written reply.

Besides, disputed matters over tax liability of about Rs 550 crore are lying with the Supreme Court, he said.

There are 4,739 cases pending in the Supreme Court, 21,568 disputes lying with High Courts and 17,522 matters with ITAT, Mukherjee said.

Recently, the Finance Minister had called the Income Tax Department as the biggest litigant and asked it to re-examine the way it handles tax disputes.

"One area of concern is litigation with taxpayers. The Department is filing appeals in a routine manner, without careful thought and examination leading to the Department earning the dubious distinction of being the biggest litigant in the Government of India," Mukherjee had said.

Later, the Central Board of Direct Taxes (CBDT) set up a committee to monitor and minimise litigations and asked its officials to look into the merits of cases before moving court.

"We have to monitor and minimise the litigation. Don't go in for frivolous litigations," CBDT Chairman SSN Moorthy had said.

In reply to another question, Minister of state for Finance S S Palanimanickam said processing of returns and issuance of refund is a continuous process in the income tax department.

Normally, after processing the returns, the refund generated is issued in due course, he said.

He said delays may be caused at times due to wrong quoting of PAN by assesses while filing tax returns, illegible recording of addresses, non-reporting of new addresses and incorrect particulars about bank accounts.

In another reply, Palanimanickam said complaints of tax evasion, including those related to the real estate sector, are received by CBDT and various field formations of the income tax department.

However, no instance of involvement of any income tax official in complaints related to tax evasion in the real estate sector has come to the notice of the government, he said.