Covid hits IT appeal process, Lucknow CAs want hearings put off till Dec

New Delhi

The Covid-19 pandemic is hitting the new initiative of expeditious disposal of Income Tax appeals as chartered accountants have sought a delay in hearing of such appeals till November.

Hundreds of chartered accountants in Lucknow have written to P.C. Mody, Chairman, Central Board of Direct Taxes (CBDT), to defer these hearing in the light of the pandemic.

Normally, an expeditious hearing of an Income Tax appeal would be a happy occasion for both parties, tax authorities and companies/individuals but the deferment is being sought because of the epidemic and restrictions in Lucknow and Uttar Pradesh.

"Needless to mention that the tone and tenor of such restrictions by the government is to ensure social distancing and action of Ld. CIT(A) in fixing the hearing of appeals, due to pressure of disposal of minimum 80 appeals in a month, is clearly defeating this object of the government," the Lucknow CA Tax Practitioner Association said in a letter, pointing to the contradiction in Commissioner of Income Tax's urgent methods and what the state government is doing as epidemic control measures.

The Lucknow CA Association has asked the CBDT chief that the internal order of disposal of a minimum 80 appeals in a month, given to all Principal CCITs, may be withdrawn during these days of pandemic and no hearings of appeals be fixed in the months of July to November.

Dates fixed for hearing of appeals in the months of July to November may either be adjourned sine die or be re-fixed in December, they said.

"No ex-parte orders should be passed by the Ld. CIT(A), Lucknow. Hearing of appeals where assessees have communicated to the CIT(A) that the assessee is availing the Vivad se Vishwas Scheme, 2020 should be adjourned sine die. Only those appeals may be taken up for hearing where the assessee himself requests for the appeal to be heard," they said.

"Please refer to your internal instruction to all Pr CCIT for disposal of 80 appeals in month by each CIT (Appeal). We have to bring to your kind attention that in the past few days, the assessees are receiving notices from the Offices of the Commissioner of Income Tax (Appeals), Lucknow (CIT(A), Lucknow) fixing the date of hearing of appeals during this period of Covid-19 pandemic," the association said.

"Whereas, at any other occasion, the assessees and their counsels would have welcomed the fixation of hearing of appeals as it would have resulted in expeditious disposal of the appeals, resulting in reduction of litigation for the assessees as well as the department. However, such fixation of hearing of appeals, in the present scenario of Covid-19 and the present spate of increase in infections across the country and particularly in Lucknow, is creating major problems to assesses and their counsels," it added.

The first appellate authority is an important forum for redressal of grievances of the assessees against the orders of the lower authorities and submissions and representations before them are meticulously prepared, bringing all facts and legal issues involved in the appeal for a judicious disposal of appeals by the Ld. CIT(A), they said.

"Such preparations require perusal of relevant papers and face-to-face discussions by employees within the assessee's organisation, discussions between the assessee and their counsels and written and oral submissions by the assessee/counsels before the first appellate authority. Needless to mention such discussions are not possible through an online mode due to limitations of infrastructure and technical knowhow with the assessees, counsels and the income tax department," the CA Association said.

They have also cited the Covid restrictions. "Moreover, most of the assessees and counsels are working in a Work from Home (WFH) environment barely able to make day to day compliances of running their businesses with limited staff attending the offices and limited access to relevant records and documents for preparation of the appeals," they said.

The present spurt of cases in Lucknow has resulted in several measures being taken by the government to limit the spread of infection. There is a complete lockdown on Saturdays and Sundays in entire Uttar Pradesh and several locations covering large chunks of population and geographical areas of Lucknow have been declared containment zones for the next few days, with all possibilities of its extension resulting in complete restriction of movement of people to and from such areas.