The year 2020 began on an upbeat note as the Finance Bill 2020 proposed to insert new provisions regarding Assessment and First Appeal; but alas, all of us are eagerly waiting to bid farewell to this year, which became notorious for the long spells of lockdown, anxiety, disease and death. The ongoing disruption caused by the pandemic has thrown all economic and also professional activity to a standstill for four months. Yet, it is commendable that all we professionals and members of AIFTP in particular had put this period to optimum utility by updating our knowledge and upgrading our proficiency with technology; the perseverance and the ability to stretch and adapt displayed by the individual professionals and the organization remind me of Wordsworth’s ‘’Happy Warrior’’:
Who is the happy Warrior? Who is he
That every man in arms should wish to be?
It is the generous spirit, who, when brought
Among the tasks of real life, hath wrought
Upon the plan that pleased his childish thought:
Whose high endeavors are an inward light
That makes the path before him always bright:
Who, with a natural instinct to discern
What knowledge can perform, is delight to learn.
(Character of the Happy Warrior)
The lessons learnt in the last few months are invaluable. For many, the growing use of technology in rendering professional services had been a challenge; however, it is gratifying to note that many of us have put the lockdown period to optimum use by making ourselves proficient in using online platforms to render professional services. While we were upgrading our skills during the lockdown, the Government was not far behind; it came up with several reforms, which were pending for long; for example, the supply chain, which got disrupted due to the lock down, was provided with the much desired financial assistance.
As mentioned earlier, through Finance Act, 2020 certain amendments were carried out in the Income tax Act, 1961, to make the First Appeal proceedings seamless and transparent. Sub-sections 6B to 6D of section 250 were introduced to conduct ‘Faceless Appeals”. The statutory provisions provided that to impart greater efficiency, transparency and accountability, the interface between the commissioner (Appeals) and the appellant, in the course of appellate proceedings should be eliminated to the extent technologically feasible. It further introduces the concept of “Dynamic Jurisdiction” in which the appeal shall be disposed of by one or more commissioner (Appeals). All these efforts culminated into launching of the scheme known as “Transparent Taxation-Honouring the Honest” by the Hon’ble Prime Minister of our country. The object is laudable, for the first time such concerted efforts were made to bring accountability into the system. The recommendations were made by the Dr. Raja J. Chellaiha report (1992) 197 ITR (St.) 99; but no major steps were taken towards fixing the accountability on the tax gatherers. The scheme introduces the “Faceless” regime to the first appellate proceedings. The system will throw up new challenges and will take its own time to evolve. As professionals, we would extend our support to the same, despite wide spread skepticism regarding the following:
i. The adequacy of infrastructural support: We are witness to the problems faced by the tax-payers as well as the tax professionals after the introduction of the GST.
ii. How will the new system ensure that the assesse has been provided with an “Effective Hearing”. In the absence of the same, the matters might move back to First Appellate forum from ITAT and the High Court.
iii. The appellate authority has an inherent right to grant stay against recovery proceedings. Under “Dynamic Jurisdiction” concept, how this inherent power is going to operate and how the same is going to be availed by the appellant is an arena, riddled with doubts.
Another important piece of legislation is Vivad Se Viswas Act, 2020. It has been introduced after the success of a similar scheme under the indirect taxes for diluting the pendency of litigation. However, the same has not gained momentum as offices of tax consultants are not fully operational even today; the key to success of this scheme is with tax consultants as they would be in a position to explain their clients the pros and cons of the scheme. The scheme is slowly gathering momentum; one more extension may provide the taxpayers an opportunity to avail the benefit of the scheme.
We all are looking forward for a bright new year 2021 with an expectation that the Hon’ble Finance Minister would provide stimulus to the economy that is stretched thin and is under immense pressure through tax incentives under direct as well as indirect taxes. The business community of this country is badly in need of a package to ease its compliance burden. Hope and wish the Government adopts a sympathetic view on this, on a priority basis.