Lok Sabha Question No. 3370 (UNSTARRED), answered on 2017-08-04
Subject: Recovery of Direct Taxes
Ministry: FINANCE
Asked by: MANSUKHBHAI DHANJIBHAI VASAVA, VIJAY KUMAR HANSDAK

## LOK SABHA

## UNSTARRED QUESTION NO.3370

## TO BE ANSWERED ON FRIDAY, THE 4 TH  AUGUST, 2014

## SHRAVANA 13, 1939(SAKA)

## RECOVERY OF DIRECT TAXES

| 3370: SHRI MANSUKHBHAI DHANJIBHAI VASAVA: SHRI VIJAY KUMAR HANSDAK: Will the Minister of Finance be please to state:                                       | 3370: SHRI MANSUKHBHAI DHANJIBHAI VASAVA: SHRI VIJAY KUMAR HANSDAK: Will the Minister of Finance be please to state:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| (a) whether the Government has made any provision regarding appeal category so as to speed up the recovery of direct taxes and if so, the details thereof; | (a) To meet the core objectives of budget collection, reduction in outstanding tax effect and litigation management, provision for two-pronged strategy has been adopted with focus on optimizing disposal in terms of numbers and maximizing disposal of appeals involving high quantum of tax effect at the level of Commissioner of Income Tax (Appeals) in the Central Action Plan of Income Tax Department for the Financial Year 2017-18. The targets in respect of disposal of appeals by Commissioner of Income Tax (Appeals) during Financial Year 2017-18 are set out as under: Each Commissioner of Income Tax (Appeals) shall dispose of a minimum number of 500 appeals or earn 700 units during the financial year 2017-2018, which must include disposal in ratios as below: i. Disposal of at least 30% of appeals that involve tax effect of Rs.10 lakhs and above including 100% of appeals pending as on 01.04.2017 that involve tax effect of Rs.50 crore and above. ii. Disposal of at least 70% of appeals that involve tax effect of less than Rs.10 lakhs. The above targets, along with demarcation of units, are represented by the following Table: |

|                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                               | Target                                                                                                                                                                                                                                                                                                                        | Minimum number of 500 appeals or earn 700 units during the year                                                                                                                                                                                                                                                               | Minimum number of 500 appeals or earn 700 units during the year                                                                                                                                                                                                                                                               | Minimum number of 500 appeals or earn 700 units during the year                                                                                                                                                                                                                                                               | Minimum number of 500 appeals or earn 700 units during the year                                                                                                                                                                                                                                                               |
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|                                                                                                                                                                  | 30%                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                               | Category                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                               | Unit per appeal                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                  | 30%                                                                                                                                                                                                                                                                                                                           | (>10                                                                                                                                                                                                                                                                                                                          | A lakhs)                                                                                                                                                                                                                                                                                                                      | A1                                                                                                                                                                                                                                                                                                                            | Above 50 Cr                                                                                                                                                                                                                                                                                                                   | 3                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                  | 30%                                                                                                                                                                                                                                                                                                                           | (>10                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                               | A2                                                                                                                                                                                                                                                                                                                            | Above 1 Cr. to 50 Cr.                                                                                                                                                                                                                                                                                                         | 2                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                  | 30%                                                                                                                                                                                                                                                                                                                           | (>10                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                               | A3                                                                                                                                                                                                                                                                                                                            | Above 10 Lakhs to 1 Cr.                                                                                                                                                                                                                                                                                                       | 1                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                  | 70%                                                                                                                                                                                                                                                                                                                           | B (< 10 lakhs - filed upto 31.03.2017)                                                                                                                                                                                                                                                                                        | B1                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                               | Appeals Filed Before 01.04.20114                                                                                                                                                                                                                                                                                              | 1                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                  | 70%                                                                                                                                                                                                                                                                                                                           | B (< 10 lakhs - filed upto 31.03.2017)                                                                                                                                                                                                                                                                                        | B1                                                                                                                                                                                                                                                                                                                            | B2                                                                                                                                                                                                                                                                                                                            | Appeals Filed from 01.04.2014 to 31.03.2017                                                                                                                                                                                                                                                                                   | 1                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                  | Balance appeals to meet overall target                                                                                                                                                                                                                                                                                        | C (<10 lakhs)                                                                                                                                                                                                                                                                                                                 | C                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                               | Current Appeals Filed during FY 2017-18                                                                                                                                                                                                                                                                                       | 1                                                                                                                                                                                                                                                                                                                             |
| (b) whether the said objectives have not been achieved, if so, the reaction of the Government thereto along with the remedial measures taken in this regard; and | (b) The aforesaid targets for the Financial Year 2017-18 have been laid out for Commissioner of Income Tax (Appeals) vide Central Action Plan on 07.07.2017. The performance of Commissioner of Income Tax (Appeals) is being regularly monitored on monthly basis for the same.                                              | (b) The aforesaid targets for the Financial Year 2017-18 have been laid out for Commissioner of Income Tax (Appeals) vide Central Action Plan on 07.07.2017. The performance of Commissioner of Income Tax (Appeals) is being regularly monitored on monthly basis for the same.                                              | (b) The aforesaid targets for the Financial Year 2017-18 have been laid out for Commissioner of Income Tax (Appeals) vide Central Action Plan on 07.07.2017. The performance of Commissioner of Income Tax (Appeals) is being regularly monitored on monthly basis for the same.                                              | (b) The aforesaid targets for the Financial Year 2017-18 have been laid out for Commissioner of Income Tax (Appeals) vide Central Action Plan on 07.07.2017. The performance of Commissioner of Income Tax (Appeals) is being regularly monitored on monthly basis for the same.                                              | (b) The aforesaid targets for the Financial Year 2017-18 have been laid out for Commissioner of Income Tax (Appeals) vide Central Action Plan on 07.07.2017. The performance of Commissioner of Income Tax (Appeals) is being regularly monitored on monthly basis for the same.                                              | (b) The aforesaid targets for the Financial Year 2017-18 have been laid out for Commissioner of Income Tax (Appeals) vide Central Action Plan on 07.07.2017. The performance of Commissioner of Income Tax (Appeals) is being regularly monitored on monthly basis for the same.                                              |
| (c) the other steps being taken to bring down pendency and the time taken for disposal of cases?                                                                 | (c) Following other steps are being taken to bring down the pendency and the time taken for disposal of cases: 1) Emphasis on disposal of appeals having high tax effect : In view of the mounting tax effect locked up in appeals before Commissioner of Income Tax (Appeals) special attention was accorded to the disposal | (c) Following other steps are being taken to bring down the pendency and the time taken for disposal of cases: 1) Emphasis on disposal of appeals having high tax effect : In view of the mounting tax effect locked up in appeals before Commissioner of Income Tax (Appeals) special attention was accorded to the disposal | (c) Following other steps are being taken to bring down the pendency and the time taken for disposal of cases: 1) Emphasis on disposal of appeals having high tax effect : In view of the mounting tax effect locked up in appeals before Commissioner of Income Tax (Appeals) special attention was accorded to the disposal | (c) Following other steps are being taken to bring down the pendency and the time taken for disposal of cases: 1) Emphasis on disposal of appeals having high tax effect : In view of the mounting tax effect locked up in appeals before Commissioner of Income Tax (Appeals) special attention was accorded to the disposal | (c) Following other steps are being taken to bring down the pendency and the time taken for disposal of cases: 1) Emphasis on disposal of appeals having high tax effect : In view of the mounting tax effect locked up in appeals before Commissioner of Income Tax (Appeals) special attention was accorded to the disposal | (c) Following other steps are being taken to bring down the pendency and the time taken for disposal of cases: 1) Emphasis on disposal of appeals having high tax effect : In view of the mounting tax effect locked up in appeals before Commissioner of Income Tax (Appeals) special attention was accorded to the disposal |

| 2016-17, it resulted in disputed tax effect of Rs.  1.92  lakh  Crore  being  unlocked  in  362 cases.    Further,  in  order  to  emphasise  the disposal of high tax effect appeals, redistribution  of  high  tax  effect  appeals  to Commissioner of Income Tax(Appeals) so as to  ensure  equitable  distribution  of  the  said appeals have also been mandated.  - 2) Emphasis  on  disposal  of  cases  having  tax effect  less  than  10  lacs :  Since  the  appeals having tax effect of less than 10 lacs amount to around 66% of the pendency of the appeals before Commissioner of Income Tax (Appeals)  before  Commissioner  of  Income Tax(Appeals) and only  1.6% in disputed tax effect,  these  appeals  have  been  targeted  for disposal on a priority basis in an expeditious manner. Directions have been issued that the said  appeals  may  be  decided  without  going into  detailed  discussion  on  each  ground  of appeal except in the cases where Commissioner of Income Tax (Appeals) consider that there is scope for further investigation. Further, it has been directed that these  appeals  may  be  finalized  in  preferably one or maximum of two hearings.  Bunching of appeals having common issues and decision on covered issues on priority has also been decided upon.  - 3) DTDRS :  To  reduce  tax  payer  grievance  and uncertainty caused due to long pending litigation before the Commissioner of Income Tax (Appeals), the Direct Tax Dispute Resolution Scheme, 2016 (DTDRS) was introduced by Finance Act 2016.  The Scheme provides for various benefits if certain conditions  are  fulfilled.  A  total  of  10,444 applications  have  been  received  under  the Scheme amounting to a tax arrear of Rs. 1,163 Crore. Till date, the tax collected in pursuance of  the  declarations  under  the  Scheme  is  Rs. 766  Crore  due  to  the  orders  passed  in  9,659 cases.  - 4) Income Tax Business Applications (ITBA): For  effective  monitoring  of  pendency  and disposal  of  appeals  on  timely  basis  before   |
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| Commissioner of Income Tax (Appeals), a module of appeals before Commissioners of Income Tax (Appeals) has been instituted in ITBA. The said functionality ensures transparency and facilitates ease of doing business by providing for e filing of appeals. It is expected to improve the control and management of litigation before Commissioners of Income Tax (Appeals).   |
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