The disputed tax amount under ‘income other than corporation tax’ is about seven times the undisputed tax amount at the end of FY19.
The trust deficit between taxpayers and the tax administration is widening, as is reflected in the amount of income tax under dispute and litigation. According to Receipts Budget 2020-21, the total income tax under dispute has increased by 29% in one year, to over Rs 8 lakh crore at the end of reporting year 2018-19. Disputed taxes on ‘income other than corporation tax’ have increased by over 77% in one year, to about Rs 4 lakh crore.
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The disputed tax amount under ‘income other than corporation tax’ is about seven times the undisputed tax amount at the end of FY19. More than 50% of outstanding disputes have come up in the last two years. The ratio of disputed to undisputed corporation tax at the end of reporting year 2018-19 has reduced to 4.9 times, compared to 5.7 times at the end of 2017-18. According to the annual CBDT Central Action Plan 2019-20, 3.41 lakh appeals were pending with CsIT (Appeals) as of March 2019, and the demand involved was Rs 5.71 lakh crore. In December 2019, CBDT wrote to all Principal CCITs highlighting that only 24% of appeals pending for more than five years, and 20% of appeals pending for three years and more, were disposed of till the end of November 2019. CBDT directed CsIT(A) to fully dispose of pending appeals of more five years as on April 2019 by March 31, 2020. We have reached this state in the face of the BJP’s promise to provide a non-adversarial and conducive tax environment, and overhaul the dispute resolution mechanisms, which is currently repulsive for honest taxpayers.
Source: Financial Express
