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In a far reaching step, the Finance Ministry will soon create a separate vertical within the income tax administrative set up so as to meet the current day needs on “dispute resolution”.
New dedicated dispute resolution panels (DRP) would soon be set up across the country, Revenue Secretary Shaktikanta Das said at the 2nd Global Tax Summit, organised by Confederation of Indian Industry (CII) here on Wednesday.
The new vertical will go a long way in reducing tax litigation in the country, Das said, adding that unlike the current regime where existing commissioners double up as DRP members, the newly set up DRPs will be staffed by dedicated personnel, Das said.
Das also said that the existing DRP framework had “not worked” to the expectations and therefore the Government was now looking to revamp the administrative system for efficient dispute resolution.
All efforts will be taken to see that the new DRPs will work in a “neutral and objective manner”.
Satya Poddar, Partner, Tax and Regulatory Services, EY India, urged the Revenue Secretary to ensure that the new DRPs are given the necessary autonomy. Later, Das told BusinessLine on the sidelines of the summit that the Revenue Department would soon issue the circular for this purpose.
“It will be on a pan-India basis,” he said when asked if the new DRP framework will be rolled out across the country.
Sanjay Sanghvi, Partner, Khaitan & Co, a law firm, hailed the announcement while stressing that it was most important for such panels to have a “justice oriented mindset”.
The practice of summarily/causally confirming the additions made by the Assessing Officers in the tax assessments without appreciating the merits of taxpayers’ case, needs to be addressed on priority, he said.
Aseem Chawla, Partner, MPC Legal, a law firm, said the announcement made by the Revenue Secretary was a welcome step. The existing DRP framework had failed due to structural deficiency, he said.
This has come with the possible realisation that it is high time to set the house in order and curb the ever increasing phenomenon of rise in tax appeals, he said.
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