About 70-80 per cent of the direct tax disputes — nearly 5 lakh involving tax demands of Rs 9.5 lakh crore at last count and piling up — may get resolved in one stroke, as the government has decided to move the Supreme Court, pleading for definitive rulings on 20 issues identified by the tax department as being at the heart of these disputes, Revenue Secretary Ajay Bhushan Pandey said on Monday.
The Revenue Secretary also said that even though the lenient 15 per cent corporate tax rate for new manufacturing units was for a limited window (till FY23-end), the government was taking efficient steps to widen the tax base, which could facilitate further pruning of various tax rates including those for corporate and dividend incomes, in the coming years. The idea is the apex court rulings would accord finality to who is in the right in the intractably fractious disputes between the taxman and taxpayers, helping mass disposal of about 4 lakh cases lingering on, at various fora — from the commissioner (appeal) level to the tax tribunals to courts and arbitration panels.
“We have identified 20 issues on which maximum number of disputes occur every year and till Supreme Court takes a decision, additions (to tax amount) keeps happening. We will request the Supreme Court to give us final verdicts on these issues,” Pandey said at the Indian Express Group’s Idea Exchange programme.
The move comes close on the heels of the launch of the Vivad Se Vishwas scheme, under which if the tax department has won a case in a lower forum and the assessee has appealed, the assessee has to pay only the disputed tax amount (125 per cent of such amount in case of search cases) as penalty and interest are waived off. If the dispute is only about penalty and interest, then only 25 per cent of the disputed penalty and interest is payable. Also, the assessee could pay just half the tax amount sans penalty and interest if she had won the case at a particular forum and the taxman’s appeal is being heard at the higher forum.
Pandey said that the Vivad Se Vishwas scheme could help resolve even big corporate tax cases as in many such disputes the interest and penalty amounts had risen to multiple times the original tax demand. “We are saying here that we will waive off penalty and interest even if these are in many multiples of tax demand. Because tomorrow, in the court, a decision can go either way and then penalty and interest can’t be waived off. It is going to be attractive to a large class of taxpayers,” he said, but refused to comment on individual cases like Vodafone and Cairn.
Responding to whether the move to appraising income-tax officials on their performance vis-a-vis the scheme could lead to overzealous approach and harassment of taxpayers, Pandey said that the department was only preparing proactively before the scheme is launched so that taxpayers can be facilitated fully. “We have 10,000 assessing officials so each one would have 50 cases in their charge. They have been asked to prepare a list of cases and proactively facilitate the taxpayers so that they don’t have to go to the officials. To that extent, certain objective and performance parameters have been defined for the assessing officers but that can’t be termed as putting pressure on the officials or that they will resort to harassment,” Pandey said. —FE
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