A majority of taxpayers have stopped filing appeals against the department following introduction of universal self-assessment scheme (USAS), withdrawal of frivolous cases and provision of Alternative Dispute Resolution (ADR) mechanism.
Members of the Income Tax Appellate Tribunal (ITAT) told Business Recorder on Thursday that few taxpayers contact the ITATs to file cases against the department. The major reason being that the CBR is not conducting 'total audit' for the last few years. Usually, the taxpayers had to file appeals against the selection of their cases for audit.
Secondly, the trend of filing appeals has also reduced due to withdrawal of the frivolous cases filed by the department and the Commissioner Appeals, the first level of appeal, accepts taxpayer's viewpoint in a majority of cases. There is no need to go to the second stage of judicial fora against the department, as all the matters are settled at the first stage. Moreover, the department withdraws appeals involving meagre amount of revenue, which also resulted in reduction in litigation at the ITAT level.
The ADR provision has also encouraged the taxpayers to go for out of the court settlement, the sources maintained. ITAT Member stated that the nature of cases coming to the ITAT included cases pertaining to the 'books of accounts' maintained by the taxpayers. In case the books of accounts were not maintained by the taxpayer, the assessing officer makes assessment, which was usually rejected by the concerned taxpayers. Other discrepancies relate to the levy of tax under various provisions of the Income Tax Ordinance 2001, the Member added.