It is a welcome news as reported in Business Recorder the other day that the Central Board of Revenue (CBR) has at long last taken notice of the frivolous appeals filed by the Income Tax department against the orders of various of adjudication forums in favour of tax-payers.
The CBR has instructed the department not only to refrain from the practice of appeals on flimsy grounds but also to review the cases still pending in courts and to withdraw those not based on solid grounds.
In this connection, the CBR has asked each regional office to set up a task force with a view to examining the status of pending appeals to decide the ones that are to be pursued.
This policy is unquestionably reflective of an enlightened approach by the CBR under the stewardship of its new chairman, Abdullah Yousuf, who is an outsider to the revenue service and therefore untainted by the institutional bias against the tax-payers.
These instructions to the department also amount to an implicit admission that the department is prone to employing all tricks of the trade, dirty ones at times, to show achievement of tax targets.
The appeals which are likely to be withdrawn by the department would fall in the category of frivolous proceedings and waste of departmental resources, for which somebody will have to take the blame. It is well known fact that in same cases the tax departments in their bid to achieve the targets of collection take recourse to rather unfair practices such as holding back payments of tax refunds to deserving taxpayers, filing frivolous appeals against taxpayers' claims and other measures either to restrict the outflow of funds to meet the claims of the tax-payers or to complicate assessment procedures so as to block or delay determination of tax refunds.
It is indeed encouraging to note that the CBR Chairman has identified these practices as being unfriendly and tactics of harassment of the tax-payers.
The harassment tactics of taxation officials also betray attempts on their part to extort bribes from the tax-payers and in some cases the taxation staff go as far as to guide the tax-payers as to how to reduce their tax liabilities if they were prepared to share their illegal gains.
Thus this rational policy in respect of appeals alone would win the confidence of a large number of potential tax-payers. But its objective cannot be achieved in letter and spirit unless the tax-payers are convinced about the sincerity and professionalism of the tax collectors.
The recent restructuring of the income tax departments through establishment of large and medium tax-payers units in big cities combined with the restructuring of the regional commissioners' offices appear to be steps in the right direction.
The classification of various categories of tax-payers and providing them with exclusive facilities for their assessments, it may be expected, would lead to the development of closer understanding between the tax-payers and officials concerned.
The CBR's restructuring process has also identified the need for strengthening the institutions dealing with adjudication and appeals besides allowing adequate powers to their sub-offices so that they might be able to decide cases without any monetary limits.
This will also preclude counter-appeals from the income tax department. Further, it has been decided to fully utilise the role of Additional Commissioners or Collectors who are reported to be sitting idle at some centres. The uneven distribution of workload is certainly one of the causes of long delays in the disposal of appeals.
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