New Delhi, Jan. 26 -- The past few Union budgets have consistently acknowledged the problem of growing income tax disputes and litigation. Over time, various measures have been announced to tackle the high level of pendency at various forums but the progress in reducing disputes remains slow.

Consider this. Of the Central Board of Direct Taxes' (CBDT) total tax demand of about Rs.42.3 trillion in financial year 2023-24, about 74%, or Rs.31.4 trillion, was under dispute, as per the parliamentary standing committee's report in December.

The largest pendency in litigation lies at the first appellate level-the Commissioner of Income Tax (Appeals). In FY 2018-19, about 335,000 disputes were awaiting disposal by the CIT(A). This increased to ...