Tax litigation in India require a positive approach involving people with sound understanding of law to provide practical solutions to tax payers to help them in resolving their income tax disputes.
Recently it has been proposed by an industry body to arrange for ‘e-hearing’ on income tax issues to deal with the disputes instead of physical appearance of assessees before assessment officers with the object to make it easy for the taxpayers in India to handle such disputes.
This suggestion has been given through a letter addressed to the Prime Minister, Narendra Modi, wherein various changes in tax laws have been sought for to check the delay which is often caused in income tax refunds, etc. to make it easy for the taxpayers of the country.
It has been proposed by the Secretary General, Assocham to build up a tax-payer friendly regime to help in making the programme of “Make India Successful” and also in increasing the tax revenue collected in the country.
It was also requested in the letter that income tax laws should be made easier in order to help the taxpayers to compute their tax liability and comply with the same on their own without seeking professional assistance.
It was also suggested that scrutiny assessment should be followed through e-hearings in place of the requirement of physical presence before the assessing officer. Such physical presence should be called upon only when it will be extremely necessary.
The letter suggested that the income tax department should use the e-technology in their assessment hearings to expedite the assessment process.
Other suggestions given:
In case of undue delay in refunds, the industry body stated that it is unfair to the taxpayers if the system is biased. It was emphasized that administration of tax laws should always be fair to both taxpayer and the tax administrator. Rules and regulations should be identical to both of them.
It was mentioned that any delay in income tax refunds which gives rise to appellate order leads to high amount of borrowing costs and should be processed within a reasonable time. The income tax law in India does not specify the time limit for refund. In the absence of time limit, refunds are often not processed in due time and there is delay in most of the cases. It has also been suggested that surcharge on higher education should be abolished.
The amendments made by the Finance Act, 2012 in connection with the provisions related to income deemed to accrue or arise in India as per section 9 of the Income Tax Act, 1961, have been referred in the said letter. It has been said that there is an urgent need to review the amendment which is retrospective in nature to provide confidence in the economy of India. It has been suggested that such amendment should be withdrawn.