Tax Experts Propose Reforms for Quicker Disposal of Pending Appeals and Reduced Compliance Burden

Tax experts propose significant reforms to expedite the resolution of pending cases at the Commissioner of Income Tax (Appeals) level and reduce compliance burdens on MSMEs. Over 580,000 cases are pending, with some languishing for over six years. Experts suggest a phased action plan to clear these cases within 1-2 years and increasing the number of adjudicating commissioners. They also recommend time-bound disposal of appeals under the faceless appeal regime to ease the burden on MSMEs. Additionally, they urge the Central Board of Direct Taxes (CBDT) to clarify the 45-day payment rule under Section 43B (h) of the Finance Act 2023, which has created a substantial compliance burden for larger businesses. Other proposals include extending the carry-forward of tax losses to all sectors and amending Section 270AA to allow taxpayers to settle disputes for select orders. These reforms aim to enhance efficiency in tax administration and reduce litigation burdens.