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The officer’s only interest in issuing the assessment order is to meet the
unrealistic collection targets. By collecting 20 per cent. tax amount, some portion
of the target is met. All tax appeals are decided by Commissioner of Income Tax
(Appeals) who are career Income Tax officials. Somehow, they are expected to
magically rid themselves of their department leanings and maintain a judicially-
neutral approach while deciding appeals. In practice, the CIT(A) routinely en-
dorses the ITO’s assessment order.
The taxpayer, then, has to file a second appeal before the Income Tax
Appellate Tribunal. In the ITAT, the taxpayer gets justice for the first time. In
most cases, they are thrown out. And the taxpayer gets his 20 per cent. back as a
refund, and the balance 80 per cent. demand is extinguished.
The Tax Department routinely goes in for appeal to the High Court
against such ITAT decisions without bothering about the winnability of such
appeals. Nobody in the tax department wants to take responsibility for not filing
appeals where a large tax demand is at stake. The appeal at the High Court (and
Supreme Court later) takes years or decades to be decided. Mostly, the tax de-
partment loses the case since it was weak in the first place. However, if the tax-
payer loses the case at ITAT, he would need to pay the balance 80 per cent. tax.
Consequently, taxpayers rarely appeal to the High Court due to the high cost,
time involved and because the balance demand of 80 per cent. has to be paid
anyway.
The tax arrears’ figure of 9 trillion will comprise most of the cases where
the 80 per cent. tax demand has been kept in abeyance. However, the fresh addi-
tions every year are significantly higher. Hence, tax arrears keep climbing every
year.
Recognising that the department’s appeals mostly have a very weak
case, the Vivaad se Vishwas scheme allows the taxpayer to pay only 50 per cent.
of the tax due where the department’s pending appeal is settled under the
scheme. However, it is unlikely to cut too much ice as most such tax demands,
barring a few, are completely unjustified.
The Department would be well advised to set up a panel consisting of re-
tired ITAT members/retired judges. They can decide whether the department
should settle on some points and let go of others. This will allow the Government
to collect some arrears.
[Source : Harsh Roongta in Business Standard, New Delhi, dated 23-4-2020]
MSME Ministry for resuming production in unaffected
zones
Manufacturers should be allowed to resume operations in areas that
aren’t classified as COVID-19 hot spots and where the virus hasn’t spread wide-
ly, subject to the condition that they strictly follow sanitation and social distanc-
ing norms to curb the spread of the outbreak, said the Ministry of Micro, Small
and Medium Enterprises (MSME).
The suggestion was put forward by the Ministry to the Prime Minister’s
Office for consideration. Nitin Gadkari, who has the MSME portfolio, said on
11-4-2020 that the Ministry was working out guidelines in collaboration with
State Governments on how to bring back migrant workers to restart production
in the MSME sector.

EXCISE LAW TIMES  1st May 2020  53