NDTV Profit on LinkedIn: Finance Ministry Seeks Input On Tax Reforms From Trade Bodies For Upcoming

It promotes transparency by conducting assessments through a digital platform where cases are randomly allocated to officers, reducing the risk of bias or corruption. The CBDT oversees various departments, such as the Investigation Wing, which looks into cases of tax evasion, and the International Taxation Department, which handles taxes related to international transactions. The CBDT has a Chairperson and six Members, each responsible for different areas such as legislation, revenue, investigation, and judicial matters. The Chairperson oversees all the functions and coordinates with the other Members for smooth running of the department. Taxation law is not only very complex as it requires specialised knowledge and expertise to implement, but also it necessitates various kinds of deterrent actions to ensure compliance by taxpayers. At present Income Tax Department (ITD) field offices are divided into 18 regions with territorial jurisdiction and one region for international taxation.

E-Verification of Returns

Excise duty is an indirect tax levied on a ‘manufacturer’ on the manufacture of dutiable goods. The liability arises upon ‘manufacture’ which may well include intermediary stages of production of final product. However, for ease of collection, duty is payable at the time of removal of goods from the factory. Non-residents are taxed only on income that is received in India or arises or is deemed to arise in India. A person not ordinarily resident is taxed like a non-resident but is also liable to tax on income accruing abroad if it is from a business controlled in or a profession set up in India. Non-resident Indians (NRIs) are not required to file a tax return if their income consists of only interest and dividends, provided taxes due on such income are deducted at source.

1. The liability arises upon ‘manufacture’ which may well include intermediary stages of production of final product.
2. The court will interfere by way of writ if the action is mala fide or arbitrary or does not comply with the statutory requirement.
3. The board’s history traces back to the Income Tax Act, under which it was formalized as the top authority for all matters related to direct taxes in India.
4. Under the Advance Ruling option, the taxpayer can approach the tax authorities to determine the taxability of a specified transaction in advance before entering the transaction, which is binding up to the second appellate authority.

Understanding the Role of the Central Board of Direct Taxes (CBDT)

Some of the grounds on which penalty imposed by the tax authorities can be set aside are absence of mens rea and bona fide intent of the party. Under the ITA, the tax authorities may impose a penalty in the case of under-reporting of income or in the case of misreporting of income by a taxpayer in the tax return. The GST laws in India allow for an appeal to be filed by a taxpayer or the tax authority against any order issued by an adjudicating authority or the appellate authority. The GST laws empower revisional authorities to revise an order passed by a subordinate authority. Appeal by the taxpayer against an order passed by the adjudicating authority, the appellate authority or the revisional authority can be filed within three months from the date of receipt of such order. The officials of the CBDT in their ex-officio capacity also function as a division of the Ministry of Finance dealing with matters relating to the levy and collection of direct taxes.

1. Before the high courts, there are approximately 40,000 to 50,000 cases pending, while before the Supreme Court there are approximately 6,000 tax cases pending, as of the last financial year.
2. Taxpayers can resolve issues through the e-Nivaran portal, which is designed for the online submission and tracking of grievances related to tax assessments, refunds, or other matters.
3. The Aadhaar card  is used by the Indian government to offer its citizens a number of services.
4. The Tribunal is also empowered to hear the appeals against orders passed by the designated authority with regard to Anti Dumping Duties under the Customs Tariff Act, 1975.
5. It is part of the Department of Revenue under the Ministry of Finance and acts as a liaison between the government with taxpayers.

The department can search residential and business premises of any taxpayer to check records and valuables to ensure that no evasion of tax is taking place. Section 132 of the Income Tax Act, 1961 provides the department the power to conduct search and seizure. The budget for the financial year 2000 streamlined the provisions relating to rates of excise duty.

Taxpayer Compliance and Enforcement

These documents can be asked for by the tax authorities during the review of the tax return, and the taxpayer is under legal obligation to present them. The tax department usually inspects a taxpayer when a proper officer, not below the rank of Deputy Commissioner, has reason to believe that the taxpayer has suppressed any transaction or escaped any payment of tax. This decision is based on a risk profiling of the taxpayer looking at their past tax history, current tax disputes, high income and allied criteria. The hierarchical structure of the CBDT ensures a clear division of responsibilities and effective administration of direct taxes in India, covering policy formulation, taxpayer services, legal matters, audit, investigation, and revenue collection.

Whether you’re a tax professional, a student, or just someone curious about how India manages its direct taxes, this guide will give you a clear understanding of CBDT’s critical role. CBDT operates Taxpayer Facilitation Centers across the country to help taxpayers resolve queries, file returns, and avail of various services. Many tax procedures have been made easier, including pre-filled tax forms, quicker refunds, and simpler paperwork, to make compliance easier for taxpayers, especially for individuals and small businesses. It ensures the collection of taxes, which is a main source of revenue for the government. Through taxes, the CBDT supports many government projects, welfare programs, and development efforts, helping to build the nation. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) hears the appeals against orders and decisions passed by the Commissioners of Customs and Excise under the Customs Act, 1962, Central Excise Act, 1944, Finance Act 94 relating to Service Tax.

The Tribunal is also empowered to hear the appeals against orders passed by the designated authority with regard to Anti Dumping Duties under the Customs Tariff Act, 1975. The sanctioned strength of the Members (including President and two Vice Presidents) is 21. It has 3 benches in Delhi and 4 benches in Mumbai and one each at Kolkata, Chennai and Banglore.

The CBDT is a statutory authority functioning under the Central Board of Revenue Act, 1963. The officials of the Board in their ex officio capacity also function as a division of the ministry dealing with matters relating to the levy and collection of direct taxes. The CBDT is headed by a chairman and also comprises six members, all of whom are ex officio special secretaries to the government of India. For verifying whether the taxpayer has complied with the tax laws and made payment of taxes in time, the tax authorities review the tax return electronically.

After independence, the CBDT made reforms that made tax laws simpler, increased the number of people paying taxes, and improved how well people followed the tax rules. We, at Hello Counsel, provide assistance and comprehensive advice on Indirect Taxes viz., Customs Duty, Excise Duty, Sales Tax/ Value Added Tax, Entry Tax, Service Tax, Octroi Duty etc. We advise our clients in matters of taxation laws and add value to their business and transactions. Our tax legal team has a great deal of experience in varied range of tax issues, from complicated cross-border transactions to tax exemption qualification. Indirect taxes are primarily levied on transactions relating to goods and services. As matters stand, there are between 120,000 and 140,000 cases pending before the Income Tax Appellate Tribunal and other tax tribunals on tax disputes.

This includes making sure taxes are collected properly, implementing amendments in taxation, and handling disputes related to taxes. It is part of the Department of Revenue under the Ministry of Finance and acts as a liaison between the government with taxpayers. The Central Board of Direct Taxes (CBDT) is at the heart of India’s direct tax system. This important group manages income tax policies, rules, and how they are enforced.

The Central the cbdt is a statutory authority functioning under the Board of Direct Taxes introduced electronic verification for tax returns to make the process of filing returns simpler. Now, taxpayers can confirm their returns online using methods like Aadhaar OTP, which speeds up processing and refunds. The CBDT issues circulars and notifications to provide clarity on various provisions of the tax laws. These help taxpayers stay informed about changes in procedures, new tax programs, and compliance requirements. Important events include the Income Tax Act of 1961, which is still the main law for India’s direct taxes, and the newer Taxation Laws (Amendment) Act from 2021, which tried to fix old issues with past tax demands.