Executives seek less room for tax disputes: Survey

Bengaluru: When it comes to direct tax simplification, 84 per cent of industry respondents to a survey from across sectors prioritised dispute or litigation reduction as the most critical need, according to a survey run by one of big four global accounting firms, KPMG, put out on Tuesday.

Dispute resolution and litigation reduction emerged as areas affecting many, as 69 per cent supported introducing a mediation scheme to facilitate early and amicable dispute resolution.

With over 6 lakh tax cases pending, of which 5.5 lakh are at the CIT(Appeals) level, 98 per cent want mandatory timelines for disposal of appeals by CIT(A) to reduce litigation backlog.

In fact, 62 per cent believe allowing tax authorities to appeal Dispute Resolution Panel (DRP) decisions would enhance its effectiveness.

About 60 per cent of respondents identified a solution of CIT(A) appeals being taken out of faceless mode for better dispute resolution.

When it comes to uncertainty in interpretation, 96 per cent of respondents supported the creation of a government-published income-tax commentary to provide clarity.

Ahead of the new Income Tax Bill, that promises to simplify the law, set to be tabled this week, 93 per cent of survey respondents batted for existing beneficial clarifications from tax circulars to be incorporated directly into the Income Tax Act.

With compliance emerging as a clear challenge, 61 per cent preferred a hybrid model also for interactions with tax officials. However, 41 per cent said that faceless assessments have not reduced aggressive assessments. 

At the same time, 43 per cent pointed out that the simplified tax regime has eased compliance. 

When it comes to timelines, 82 per cent want the deadline for filing belated or revised returns extended to March 31 of the relevant assessment year.