India's National Tax Tribunal Attacked By Professional Bodies

by Lorys Charalambous, Tax-News.com, Cyprus

01 September 2003

The Indian government's decision to establish a National Tax Tribunal (NTT) to hear tax dispute cases has been sharply criticised by a group of professional bodies representing the legal and taxation professions, it emerged from reports last week.

The National Tax Tribunal will replace the current system where tax disputes are heard in the high court and court of appeal; the government's reasoning is that a specialist tax panel will be more efficient in terms of cost and time and will improve revenue flows.

However various organisations, including the All-India Federation of Tax Practitioners (AIFTP), Income Tax Appellate Tribunal (ITAT) Bar Association, The Chamber of Income tax Consultants (CITC) and the Bombay Chartered Accountants Society (BCAS) are objecting to an NTT overseen by bureaucrats and have called the new tax panel unconstitutional.

Speaking at a recent press conference, Dinesh Vyas, vice president of the ITAT Bar Association told reporters that important issues of law often requiring interpretation cannot be left to bureaucrats and called for a public debate on the matter. The AIFTP meanwhile says the new tax tribunal should be the responsibility of the ministry of law rather than the ministry of finance and instead favours the creation of a National Tax Court.

Nevertheless, the government appears likely to forge ahead with the NTT despite these objections and the cabinet is set to make a final decision on the issue this week.

In an announcement in July, Finance Minister Jaswant Singh said previous guidelines were too restrictive and revealed that as a result of this, around 27,000 cases are currently pending for technical breaches alone. Therefore the new Tribunal will endeavour to apply a single interpretation of the Income Tax Act, said the Finance Minister. In addition, Singh is intending to make provision for an extra 50 benches of appellate tribunal for resolving tax disputes, a measure which is designed to conclude all cases within six months. A Tax Ombudsman will also be appointed to deal with tax cases.

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