Finance Minister Nirmala Sitharaman said record 2.24 lakh tax appeals disposed last year was not enough, with 5.4 lakh still pending, and urged a shift to preventing disputes through tax certainty.
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Finance Minister Nirmala Sitharaman on Friday said income tax authorities must accelerate the pace of clearing taxpayer appeals. The record 2.24 lakh appeals disposed in the last fiscal year was not enough, she said at the 167th Income Tax Day celebrations. Pending appeals still total 5.4 lakh.
Sitharaman urged the Central Board of Direct Taxes to review its litigation strategy. Disposing 2.24 lakh appeals against 1.79 lakh fresh filings had reduced pendency. The remaining backlog remained too high, she said, and the rate of clearing pending appeals has to match the rate of new filings.
CBDT Chairman Ravi Agrawal told the gathering the department disposed over 2.24 lakh appeals during FY26, significantly more than the 1.79 lakh fresh appeals filed. Around 6,000 departmental appeals were withdrawn after revised monetary thresholds in the 2024-25 budget, he said.
Sitharaman said the department should shift from managing litigation to preventing disputes through greater tax certainty. Implementation of the Income Tax Act, 2025, should come with consistent guidance and continuous engagement with taxpayers, professionals and industry. Tax certainty was critical for ease of doing business and India's attractiveness as an investment destination, she said.
On taxpayer services, Agrawal said nearly all verified income-tax returns for the 2025-26 assessment year had been processed. Of roughly 8.6 crore verified returns, only about 1.5 lakh remained pending. Out of 3.82 crore verified refund cases, 1.47 lakh were pending, mostly due to risk assessments. The department disposed 5.68 lakh appeal-effect orders out of 6.29 lakh, a disposal rate of 90.3% in FY26.
Grievance redressal improved as well, Agrawal said. The department disposed 94% of nearly 77,765 CPGRAMS complaints and resolved 95% of over 3.43 lakh e-Nivaran grievances. He said the department was identifying root causes of recurring complaints.
On international taxation, the CBDT signed 220 Advance Pricing Agreements during FY26, taking cumulative APAs to 1,035 by March 2026. The virtual assistant Kar Saathi recorded 38 lakh hits. The department held 304 physical outreach programmes, 11 Samvaad sessions on the new tax act, and 12 sessions on new income-tax forms.
Revenue Secretary Arvind Shrivastava called the new act a landmark reform. The law reduced sections from 819 to 536, chapters from 47 to 23, rules from 511 to 333, and forms from 399 to 190, he said.
Sitharaman set out seven principles for the department: deepening voluntary compliance, simplifying taxpayer experience, strengthening tax certainty, harnessing technology responsibly, building institutional excellence, strengthening public trust and embracing continuous improvement. She called for specialised training of tax officers in artificial intelligence and data analytics, along with forensic accounting, international taxation, transfer pricing, digital assets and cybersecurity.
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