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Report No. 162

Chapter VI

Income-Tax Appellate Tribunal (ITAT)

6.1. So far as ITAT is concerned, the Commission is of the opinion that no change is called for in the working of this Tribunal since it has been working satisfactorily for the last several decades. There is however one measure of improvement which we wish to propose, namely, the dispensing with of the requirement of applying to the Tribunal in the first instance for making a reference to the High Court as provided by sub-section (1) of section 256 of the Income-tax Act, 1961.

The procedure can be simplified and'a lot of time can be saved by providing that a person aggrieved with the decision/judgment of the Tribunal may apply to the High Court straightway requesting the High Court to direct the Tribunal to state the questions of law which according to him (the applicant) arise from the decision of the Tribunal. The present practice of clearly stating the questions of law which a person wants to raise must be continued.

The applicant must be further directed to specify the paragraphs in the decision of the Tribunal which are relevant to each of the questions of law raised by him, separately. It should also be provided that such applications should be listed before the appropriate Bench in the High Court as soon as they are ready for hearing. This is being emphasised for the reason that in certain High Courts, applications under section 256(2) are kept pending for years together before they come up for hearing.

6.2. It has been observed that the same question of law is involved in the case of many assessees every year repeatedly in the taxation matters, till the question of law is finally decided by the higher courts. This results in a geometric increase in the number of cases on similar questions and also leads to uncertainty in respect of the payment of taxes.

In the event of a decision holding against the assessee on those recurring questions of law, the cumulative interest on taxes payable, under various heads as determined by the court to be payable by the assessee, sometimes reach very high figures, which may give a jolt to the industry and even lead to the closure of the industry in some cases. Therefore, justice demands that the recurring disputes on account of common questions of law should be finally settled at the earliest.

The solution to this problem may lie only if adequate attention of ITAT is drawn to such common issues. Therefore, the ITAT may, through the assistance of research officers specified under paras 4.9 and 4.10, supra, invite applications regarding such common issues/recurring issues from the assessee/appellants or from the Respondent/Revenue department by advertising from time to time in newspapers and on notice boards. The research officers may also delve into court files to find out such common questions of law and put them up before the ITAT.

The Tribunal should decide such issues on a priority basis. In their judgment, the Tribunal may refer to the fact of taking up the common issue on an expeditious basis, so that the High Court may also take it up on a priority basis. Similarly, the High Court may mention in their judgment about taking up the matter on a priority basis, so that in case the matter goes to the Supreme Court, it may also decide the case expeditiously to settle the matter.

6.3. The recommendations made regarding Central Administrative Tribunal under paragraphs 4.9, 4.10, 4.11 and 4.13, supra, shall also be extended to ITAT also.

Review of functioning of Central Administrative Tribunal - Customs, Excise and Gold (Control) Appellate Tribunal and Income-Tax Appellate Tribunal Back

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