LETTER [F.NO. 279/M - 73/2012-ITJ],

MINISTRY OF FINANCE, DEPARTMENT REVENUE

CENTRAL BOARD OF DIRECT TAXES, AUDIT & JUDICAL DIVISION

378, Hotel Samrat, kautilya Marg, Chanakyapuri, New Delhi, 110021

New Delh, dated 25^th October, 2012  

To

All Chief Commissioner of Income-tax (CCA)

Madam/Sir,

Subject:- Mounting Pendency of Appeals before CsIT(A) & tardy disposal by CsIT(A) - Performance appraisal of CsIT(A)-reg.

Kindly refer to the above.

2. Mounting pendency of appeals before CIT(A) and huge amounts disputed therein has been a matter of serious concern for the Department. The C&AG, Standing Committee on Finance, PAC have been adversely commenting upon this issue and calling upon the department to take up the issue on priority to clear the pendency and liquidate the demand locked up in the appeals, urgently.

3. CAG in its report No. 20 of 2009-10 on 'The Appeal Process' recommended steps for managing inventory of appeals (paragraphs 2.1 to 2.8). One of the recommendations read as under:

"reasons for low disposal of appeals by CsIT(A) need to be analysed; wherever pendency is due to lower efficiency, strict administrative measures need to be taken."

4. In terms of Para 4.2 of the Central Action Plan for F.Y. 2012-13 relating to disposal of appeals by CsIT(A), the exercise of redistribution of workload and communication of annual and quarterly targets (basket wise) for each CIT(A), must have been completed by all the CCsI(CCA). The Board is yet to receive the reports from some of the CCsIT(CCA).

5. An analysis of the disposal of appeals by CsIT(A) for FY 2011-12 shows that the average disposal per CIT(A) was 312 (including B-1 appeals). However, 99 CsIT(A) could not reach the average disposal of 312. 64 CsIT(A) disposed of appeals in the range of 300-400 and an equal number of CsIT(A) disposed of appeals in the range of 400-500. 14 CsIT(A) disposed of more than 500 appeals and 3 of than disposed of more than 600 appeals in the year.

6. Taking note of the situation, it has been decided by the Board that the CCsIT may hold quarterly, reviews in October 2012, January 2013 and April 2013 to review the work of CsIT(A) functioning under them and bring the fact of shortfall in the disposals, lack of quality in the orders etc. to the notice of the officer(s) concerned with a copy to the Zonal Member.

7. It has been further decided that the CCsIT while recording the APAR should consider. Inter-alia, the disposal of appeals from the perspective of the all India average number of appeals disposed of. It is to be noted that while doing so the CCsIT shall give due weightage to High Demand Appeals and the appeals related to Transfer pricing in the ratio of 2:1 and 4:1 in comparison to other appeals.

8. In case of CsIT(A) who have been transferred to other charges during the recent AGT, the disposal by them vis-a-vis the targets fixed for them for the period they worked in that charge, may be communicated to the new Reporting Officer for incorporation in the APAR.

Yours faithfully

(Gaurav Kanaujiya)

Deputy Secretary, ITJ

Appeal pendency management: target-based reviews and APAR-linked weightage to prioritise high-demand and transfer pricing appeals. Administrative directions require completion of workload redistribution and annual and quarterly targets for CsIT(A), quarterly reviews by CCsIT to record disposal shortfalls and order quality issues, and inclusion of disposal performance in APARs with increased weight for High Demand and Transfer Pricing Appeals; disposals by transferred officers must be communicated to new reporting officers for APAR incorporation.