MUMBAI (TIP): The Central Board of Direct Taxes (CBDT) wants to make it easier to pay taxes in India. And the measures to be introduced in the near future, after obtaining an internal committee’s report, could include peer review of assessment orders in certain cases. The concept of a peer review, CBDT feels, would improve the quality of the assessment process and send the right signal to large domestic and foreign taxpayers. The recommendation of a peer review of select assessment orders was made by the Tax Administration Reform Committee (TARC) in its report in May last year. A committee was recently set up to examine the efficacy of the TARC recommendation and also another suggestion to shift away from the current territorial operational structure of tax administration towards a one that is more functional and industry specialized.
An internal memorandum notifying the setting up of this committee under the leadership of V K Saxena, principal commissioner, Delhi, adds, “The department has already accepted the recommendation (of TARC) to create large business service units to assess large and complex cases on a pilot basis.” As regards peer review of assessment orders, TARC had recommended: “The assessment team could comprise more than one assessing officer (AO) in complex cases. In cases where the tax assessed by the AO is higher than what the taxpayer considers is due and the addition proposed is more than a specified amount, the amount should be approved by a team of superiors from outside the AO’s jurisdiction. This would bring quality to the assessment orders, as there would be a peer review. The taxpayer should be allowed to explain his position to the team of superiors and the draft order should be finalized based on the final directions.”