New Delhi: Chief Justice of India S.A. Bobde on Friday said quick resolution of tax disputes will act as an incentive for tax payers and free up the funds locked up in litigation, making a strong case for an efficient dispute resolution ecosystem. The Chief Justice also said that while tax evasion is a social injustice to fellow citizens, arbitrary or excessive tax also leads to social injustice by a government.
The Chief justice also warned that artificial intelligence should only be used to manage processes that are repetitive in nature, but not to substitute human discretion which is necessary for a just decision making.
The Chief Justice’s comments about taxation comes days before the presentation of the union budget for FY21 by finance minister Nirmala Sitharaman, who is expected to announce steps to modernize the Income Tax administration going by the advice of a task force that reviewed the tax law last year. Sitharaman has promised to de-criminalise the Income Tax Act and the Prevention of Money Laundering Act (PMLA) and to offer a scheme to resolve past income tax disputes as had been offered last year in the case of indirect taxes.
The Chief Justice said the tax judiciary plays a key role in resource mobilisation of the country and expressed worries over pendency of cases.
"A just and speedy dispute resolution is perceived as a tax incentive by the taxpayer. To the tax collector, an efficient tax judiciary assures that demands arising out of legitimate assessment are not strangled in delayed litigation," Bobde said at the 79th foundation day celebrations of Income Tax Appellate Tribunal (ITAT) here.
Referring to ancient laws in India around taxation, Bobde said that tax should be collected from people as honey bee draws nectar without harming flowers.
Bobde said that artificial intelligence should be used with caution in tax administration and that it should not replace the human discretion required for delivering justice. " I do not believe that artificial intelligence should ever be allowed to substitute the human discretion which is necessary for a just decision making," he said.
With inputs from PTI.