Speaking at the 167th Income Tax Day celebrations, Union Finance Minister Nirmala Sitharaman urged the Central Board of Direct Taxes (CBDT) to urgently address the heavy backlog of income tax appeals. While total pendency dropped by over 34,000 cases to 5.4 lakh appeals, the minister noted that the current rate of reduction is insufficient given the continuous influx of new appeals.
“I would have thought the pending appeals would have come down to less than 1 lakh… It cannot be that the cases keep mounting; it will take a century to clear them if growth in complaints outpaces reduction.”
— Nirmala Sitharaman, Union Finance Minister
Key Highlights & Tax Department Directives
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Shift to Litigation Prevention: Sitharaman emphasized moving from passive “litigation management” to proactive “litigation prevention” to ensure tax certainty and encourage voluntary compliance.
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Empathetic & Balanced Enforcement: The FM instructed tax officials to exercise statutory powers with humility, drawing a clear distinction between deliberate tax evaders and taxpayers making bona fide mistakes.
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Filing Progress (AY 2026–27 / FY26): As of July 21, over 3.2 crore ITRs have been filed. Nearly 94% have been verified, and 60% processed.
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Refund Disbursal: Of the 1.3 crore refund claims submitted, 96% have been verified, with 40% already processed. The FM called for further shortening of processing timelines.
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Tech Capabilities: The e-Filing portal demonstrated improved capacity during the peak season, processing over 1 crore taxpayer interactions daily and hitting a peak of 1.6 crore.
The 5 Priorities for the Income Tax Department
The Finance Minister outlined a five-pillar framework to transition the department’s focus from traditional revenue collection toward fairness, efficiency, and taxpayer service:
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Recognize: Identify and acknowledge taxpayer concerns promptly.
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Respond: Address queries with clarity, courtesy, and empathy.
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Redress: Resolve genuine grievances fairly within set timelines.
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Reflect: Analyze the root causes of recurring taxpayer disputes.
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Reform: Continuously streamline underlying tax procedures and systems.
