Understanding India’s Income Tax Appellate Tribunal (ITAT) — The ‘Mother Tribunal’ of Fiscal Justice

— by vishal Sambyal

India’s Income Tax Appellate Tribunal (ITAT), established in 1941, plays a crucial role in resolving tax disputes. Here’s how it functions, its structure, and why it matters.

Introduction: A Courtroom Balancing Billions

At a time when India’s economic machinery relies heavily on timely tax adjudication, the Income Tax Appellate Tribunal (ITAT) stands as the nation’s oldest and most vital quasi-judicial institution. Yet, as Chief Justice of India B.R. Gavai recently revealed, tax disputes amounting to a staggering ₹6.85 lakh crore remain pending before the tribunal. Speaking at a symposium in New Delhi titled “Income Tax Appellate Tribunal (ITAT) – Role, Challenges, and Way Forward” on October 8, the CJI both acknowledged the challenge and commended ITAT’s success in slashing its case backlog from 85,000 to 24,000 over five years — a significant stride in India’s pursuit of fiscal justice.

Context: The Birth and Legacy of the ITAT

The Income Tax Appellate Tribunal was established on January 25, 1941, predating India’s independence. Often referred to as the “mother tribunal”, it paved the way for the creation of several other quasi-judicial bodies in the country.

Under Section 252 of the Income-Tax Act, 1961, the central government is empowered to constitute the ITAT, comprising judicial members and accountant members. The tribunal specializes in handling appeals under India’s Direct Tax laws, ensuring that citizens and businesses have a fair and accessible platform to challenge decisions made by tax authorities.

With 63 benches across 30 cities, the ITAT covers nearly all major judicial jurisdictions, serving as a bridge between taxpayers and the government.

Structure: Who Runs the Tribunal?

At the top of ITAT’s hierarchy sits a President, supported by 10 Zonal Vice-Presidents and a sanctioned strength of 126 members.

Eligibility for Key Roles:

  • President: Must be a sitting or retired High Court judge with at least seven years of service.
  • Judicial Members: Candidates must have 10 years of judicial or legal experience — either as a District Judge, member of the Indian Legal Service, or practicing advocate in income tax law.
  • Accountant Members: Must have 25 years of accountancy practice or be from the Indian Revenue Service (IRS) with experience in adjudicating fiscal disputes.

This dual composition — one judicial and one accountant member per bench — ensures that legal interpretation and financial expertise work hand-in-hand. It’s a system designed for balance, accuracy, and fairness in resolving complex taxation matters.

How the ITAT Operates: The Final Fact-Finder

The ITAT functions as the final fact-finding authority in India’s tax dispute system. It does not re-investigate cases from scratch but reviews appeals against orders issued by tax authorities under various Direct Tax Acts — including income tax, wealth tax, and gift tax.

Each bench is empowered to interpret intricate questions of law and fact, often involving revenues worth hundreds of crores. Importantly, while its decisions are binding on both taxpayers and the Income Tax Department, appeals can still be made to High Courts, but only on substantial questions of law. The Supreme Court serves as the ultimate arbiter, again focusing solely on legal questions.

Recent Developments: Progress and Pendency

CJI B.R. Gavai’s remarks underscore both progress and pressure. While the ITAT’s reduction in backlog from 85,000 to 24,000 cases is commendable, the remaining ₹6.85 lakh crore in pending disputes signals the scale of fiscal bottlenecks still awaiting resolution.

The tribunal’s efficiency has improved through digitization, e-filing systems, and virtual hearings, particularly post-pandemic. These initiatives have made tax adjudication faster, more transparent, and accessible to taxpayers across India.

However, staffing shortages, complex legislative amendments, and rising volumes of appeals continue to challenge its capacity to deliver timely justice.

Expert Insight: A Call for Reform

Tax experts and legal analysts emphasize that while ITAT’s reforms are commendable, procedural delays and member vacancies often hinder its functioning.

“The ITAT is the backbone of India’s tax justice system. To unlock billions stuck in disputes, we need continuous modernization, faster appointments, and more accountability in case management,” says Dr. Ramesh Singh, a Delhi-based tax policy analyst.

Others argue that strengthening alternative dispute resolution mechanisms — such as mediation or settlement commissions — could further reduce the caseload burden on ITAT.

Impact & Implications: Beyond the Tribunal

The ITAT’s functioning directly influences India’s ease of doing business, investor confidence, and tax compliance culture. When disputes linger for years, they lock up massive funds that could otherwise fuel economic growth.

A well-functioning ITAT helps both taxpayers and the government by ensuring predictability in tax administration, reducing litigation costs, and reinforcing trust in the rule of law. The tribunal’s efficiency, therefore, isn’t merely an administrative matter — it’s a cornerstone of India’s fiscal stability.

Conclusion: Strengthening the Pillars of Tax Justice

For over eight decades, the Income Tax Appellate Tribunal has upheld the delicate balance between taxpayer rights and the government’s revenue interests. As India’s economy expands, so does the complexity of taxation — making ITAT’s role more crucial than ever.

The way forward, as emphasized by the Chief Justice, lies in capacity building, technological upgrades, and swift case resolution. In doing so, ITAT will continue to serve as the trusted guardian of fiscal fairness — ensuring that India’s pursuit of growth remains firmly anchored in justice.

Disclaimer:This article is for informational purposes only. It is not intended as legal or financial advice. Readers should consult qualified professionals for specific tax guidance.