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FM Sitharaman flays tax officials, says OGE issuance delays 'unpardonable'

FM Sitharaman flays tax officials, says OGE issuance delays 'unpardonable'

Finance Minister Nirmala Sitharaman, on the 166th Income Tax Day on Thursday, sharply criticised delays in the issuance of Orders Giving Effect (OGEs), calling them 'unpardonable,' and urged the income tax department to act decisively on five priority areas identified during a high-level review in June 2025. OGE refers to the implementation of appellate or court decisions by tax officers. It ensures that the outcomes—such as refunds, reassessments, or adjustments—are formally carried out based on the ruling.
'After all the decisions are taken, the delay in OGE issuance is just not explainable. But we have a category—would you believe it? You have a category of OGE issuance delay. Why pray? The decisions are all done. You just have to issue the OGE. Unpardonable,' she said, addressing senior officials.
Reinforcing the need for accountability, she said that good policies alone are not enough. What matters, actually, is timely execution. Referring to the progress made in redrafting the Income Tax Act, she added, 'For a group or the CBDT, which is able to reduce five lakh words of the 1961 Act within a matter of three months to give me a draft bill which is half the size of that earlier 1961 Act… you're able to do that, but you can't issue OGEs? What's going on?'
Recalling the key action points from the June 2025 review, Sitharaman said: 'I would recall five of them (including the issue of OGE), which I would think are important for all of us to re-look at—not because things have changed from then to now, June 2025 to now, but to refresh ourselves that these were things which all of us spoke about together.'
The first, she said, is to 'accelerate disposal of disputed tax demands pending before the faceless appellate authorities and ensure timely resolution of litigation backlog.' Second, departments must 'identify and withdraw departmental appeals falling below the revised monetary threshold announced during the Union Budget 2024–2025 within the next three months.' The Union Budget 2024–25 raised the monetary thresholds for filing departmental appeals in tax-related cases, setting the new limits at ₹60 lakh for tribunals, ₹2 crore for High Courts, and ₹5 crore for the Supreme Court. These enhanced limits apply to disputes under Direct Taxes, as well as legacy cases in Excise and Service Tax.
The third priority is to 'ensure timely processing of tax refunds and proactive and timely resolution of taxpayer grievances,' said the Minister. Fourth, departments must 'analyse the grievances and devise strategies not only to resolve the existing pendency but also to address the challenges that are causing the grievances in the first place.' And fifth, Sitharaman said, is to 'undertake region-wise performance reviews to help identify factors hindering performance and streamline operations through indicators such as grievance disposal and orders giving effect issuance.'
Calling the Income Tax Day 'the moment when we reaffirm the unsaid social contract between the state and the taxpayer,' Sitharaman said this contract must not be allowed to 'fray at the edges' or 'become loose, become diluted.' She urged officials to raise the benchmark and ensure that the reform process is matched by efficient delivery on the ground.
In addition, the Finance Minister lauded the drafting of the new Income Tax Bill as the first-ever comprehensive review of the Income Tax Act since 1961. She said that several members of the select committee of the Lok Sabha had informally appreciated the drafting of the IT Bill 2025. She expressed hope that 'Parliament actually looks at the good work done… we will welcome the suggestions by honourable members and… expect with enough engagement, discussion, and debate in the House… this bill… passes through Parliament's scrutiny.'
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