The industry body said that the long pendency, worsened after the rollout of the faceless appeals mechanism in 2021, is undermining taxpayer confidence and delaying refunds.
It noted that technical issues, repeated notices, and limited access to virtual hearings have slowed case disposals under the new system.
FICCI recommended that 40% of vacancies at the CIT(A) level be filled immediately and that a dual-track system be introduced—fast-tracking simple, low-value cases while assigning detailed scrutiny to complex, high-value appeals.
It also suggested setting time-bound disposal targets and quality audits of appeal orders, on the lines of the US IRS’s Appeals Quality Measurement System.
The chamber proposed automatic approval of virtual hearings, allowing taxpayers to present documents in real time, and mandatory stays on tax demands if appeals remain unresolved for over two years without taxpayer fault. It further recommended that refunds collected during appeal pendency be released and that remand report delays from assessing officers be capped at 90 days.
FICCI said that addressing this issue is critical to the credibility of the faceless appeals regime and could improve ease of doing business, company valuations, and investor sentiment. “Pending litigation reflects as contingent liabilities in company books, pulling down valuations during stake sales to foreign investors,” the submission noted.
The Central Action Plan for 2025–26 targets disposal of two lakh cases and ₹10 lakh crore of disputed demand, but FICCI cautioned that without differentiated timelines or capacity expansion, the backlog may persist.
