Grievance before Local Committee against high-pitched assessment
Introduction
The Central Board of Direct Taxes (CBDT) has constituted Local Committees in each Principal CCIT region to deal with Taxpayer Grievances arising from the High-Pitched Scrutiny Assessment Orders. The Local Committees are constituted to effectively and efficiently address taxpayers" genuine grievances and to create an environment in which assessment orders are passed fairly and reasonably.
1. About
1.1. Applicability of instruction issued under the ITA 1961
Section 536(2)(j) of the ITA 2025, which is a repeal and saving clause, provides that any circular, direction, instruction, notification, order, etc. issued under any provision of the repealed Income-tax Act shall, so far as it is not inconsistent with the corresponding provisions of this Act, be deemed to have been issued under the corresponding provision of this Act and shall continue in force accordingly. Thus, this instruction provided under the repealed ITA 1961 shall also apply under the ITA 2025 to the extent it is not inconsistent with its provisions.
1.2. What is a Local Committee?
The Local Committees are committees constituted
1.2-1. Constitution of Local Committees
The Local Committee shall consist of 3 members of Principal Commissioner (Principal CIT) or Commissioner of Income-tax (CIT) rank. The senior-most member is designated as the Chairman of the Committee. The Local Committees may co-opt other members, if necessary.
1.2-2. Jurisdiction of Local Committees
The Local Committees shall deal with the grievance petitions of the assessee related to high-pitched scrutiny assessments completed (Faceless and non-Faceless) within the jurisdiction of the respective Principal CCIT. These Committees will also handle the grievances pertaining to Central Charges located under the territorial jurisdiction of the Principal CCIT concerned.
1.3. Who can apply to a Local Committee?
Any taxpayer aggrieved by a high-pitched scrutiny assessment can file a grievance petition to the Local Committee.
1.4. How to approach the Local Committee?
1.4-1. Where the assessment is completed in a faceless manner
The grievances related to High-Pitched Scrutiny Assessments completed under the Faceless Assessment regime will be submitted to NaFAC through a dedicated e-mail id:
Grievances so received shall be forwarded by NaFAC to the Local Committee, under intimation to the Principal CCIT of the concerned region.
1.4-2. Where the assessment is completed in a non-faceless manner
The grievances related to High-Pitched Scrutiny Assessments completed under the non-Faceless Assessment regime will be submitted to the office of the Principal CCIT concerned, physically or through e-mail. Grievances so received shall be forwarded to the Local Committee.
1.5. Process to be followed after submission of the grievance petition
Step 1 – Acknowledgement of the petition
A Grievance petition received by the Local Committee would be acknowledged. Member-Secretary would maintain a separate record for dealing with such petitions.
Note: The Additional Commissioner of Income-tax (Headquarters) to the concerned Principal CCIT would act as a Member-Secretary to the Local Committee.
Step 2 – Application to be forwarded to Local Committee
On receipt of taxpayers" grievances, Member-Secretary will forward the same to the Chairman and Members of the Local Committee within 3 days of receipt of the grievance.
Step 3 – Examination of application by the Local Committee
The grievance petition received by the Local Committee would be examined by it to ascertain whether there is a prima-facie case of High-Pitched Assessment, non-observance of principles of natural justice, non-application of mind, or gross negligence of Assessing Officer/Assessment Unit.
Step 4 – Call for the records or seek inputs
The Local Committee may call for the relevant assessment records to peruse from the Jurisdictional Principal CIT concerned.
The Local Committee may seek inputs from the Directorate of Systems (ITBA/e-filing/CPC-ITR, CPC-TDS, etc.) on System-related issues emanating from the grievance/matter under consideration, if considered necessary.
Step 5 – Find out the accuracy of addition(s) and submit its report to Principal CCIT
The Local Committee would ascertain whether the addition made in the assessment order is not backed by any sound reason or logic, the provisions of the law have grossly been misinterpreted, or obvious and well-established facts on records have outrightly been ignored. The Committee would also consider whether principles of natural justice have been followed by the Assessing Officer/Assessment Unit. After that, the Local Committee shall submit a report treating the order as High-Pitched/Not High-pitched, along with the reasons, to the Principal CCIT concerned.
Step 6 – Follow-up action by Principal CCIT
On receipt of the report of the Local Committee, Principal CCIT concerned may take suitable administrative action in respect of cases where the assessment was found to be High-Pitched by the Local Committee, which inter-alia include:
(a) Calling for an explanation of the Assessing Officer/Assessment Unit (through Principal CCIT, NaFAC) and any other administrative action as deemed fit.
(b) Administratively advise the Principal CIT concerned to prevent any coercive recovery in cases identified as high-pitched by the Local Committee.
The Principal CCIT may also share the findings of the report of the Local Committee concerned with NaFAC and the Directorate of Income-tax (Systems), as feedback, for revisiting the SOP/policy on Faceless Assessment and addressing the systems-related issues.
1.6. Time limit to dispose of the grievance petition
The Local Committee shall endeavour to dispose of each grievance petition within 2 months from the end of the month in which such petition is received by it.
Further, the Member-Secretary will ensure that the meetings of the Local Committees are held at least twice in every month during the pendency of the grievance petitions and that timely reports are submitted to the Principal CCIT concerned.
References
Instruction F. No. 225/101/2021-ITA-II, dated 23-04-2022.
This article is general information and not tax advice. Provisions change. Confirm your position with a qualified professional before acting.