The scourge of tax arrears

Over four-fifths of the Centre's direct taxes are blocked in arrears. The goal now should be to reduce disputes, not increase them

The proposal to introduce a mechanism for faceless appeals against tax assessment cases seems to have stirred up a hornets’ nest. Recent newspaper reports suggest that tax officials are apprehensive that the transition from the existing appeals system to a faceless mechanism will face many logistical hurdles. Tax consultants, too, fear that the proposed online appeals system could lead to additional demands from the tax assessment officers since it is difficult to explain a case at the appeals stage based on electronic mail exchanges alone.

The danger is that tax demands may increase and more disputes could arise, overburdening the