Federation of ITAT Bar Associations (Federation), an umbrella association of Income Tax Appellate Tribunal Bar Associations of the country has objected to the finance bill’s proposal to make the Income Tax Appellate Tribunal adopt a ‘faceless’ mode while conducting proceedings to review appeals on tax assessments.
The federation, as well as various bar association of ITAT, have approached the Union Finance Ministry as well as the Law Ministry and raised various points as to why this open court system should not be demolished which are as under:
- The existing open court system where both the sides of the litigation, the tax-payers and the department, produce their arguments and counter-arguments in the open court, and this is the first level where tax-payer as well department present their views in open court. As in all previous proceedings the hearing is done in closed door.
- This is the highest and the last fact-finding authority under the Income-tax Act, 1961, dealing with varied matters involving complicated issues of facts, law, international taxation, transfer pricing.
- Faceless is a very new scheme and one needs to first check its implication on the lower level and then apply the same on ITAT.
- Before implementing the above system which will be a major shift views of stake holders needs to be taken.
The proposal seeks to replace the open court hearings with the mere filing of written submissions. “Nowhere internationally second appellate machinery like the ITAT, which is acknowledged as having all trapping of a Court – has been made to such an extent ‘faceless’,” ITAT Mumbai claimed in its release.
Referring to detailed representations made by various ITAT Bar Associations to the finance minister, law minister and Prime Minister’s Office, Mumbai ITAT Bar Association stated it logically demolished reasonings provided in the proposal, including raising efficiency and transparency by eliminating interface between parties and optimizing resources and introducing dynamic jurisdiction. The move will be counterproductive, said the ITAT press statement
Hence all the ITAT Bar associations are opposing the new proposal in the Finance bill of making ITAT online and faceless.