Delhi High Court Chief Justice D.K. Upadhyaya criticized India’s archaic tax system, stating that those who generate income are treated like culprits, and urged the need for simplified, transparent, and taxpayer-friendly tax reforms to boost economic growth.
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NEW DELHI: At a symposium organized by the Income Tax Appellate Tribunal (ITAT) on “Role, Challenges and Way Forward” at the Delhi High Court, Chief Justice D.K. Upadhyaya delivered a thought-provoking critique of India’s existing tax administration. His remarks struck a chord with many legal and financial professionals, particularly for calling the working style at the lower levels of tax assessment “archaic” and highlighting how “the one who generates income is looked upon as a culprit.”
The event, attended by Chief Justice of India B.R. Gavai and Union Law Minister Arjun Ram Meghwal, doubled as a felicitation ceremony for CJI Gavai. However, it soon evolved into a deep reflection on the state of India’s taxation framework, its challenges, contradictions, and the urgent need for reform.
Chief Justice Upadhyaya did not mince words in describing the outdated mindset prevalent among some tax officers. He pointed out that taxpayers, who form the backbone of the nation’s economy, are often treated with suspicion rather than respect.
“The one who generates income is looked upon as a culprit,”
he observed, adding that this approach discourages entrepreneurship and innovation.
He called for a “predictable and simplified system of taxation” as a key step towards realizing India’s ambition of becoming a $5 trillion economy. According to him, the current tax regime, burdened with excessive procedural complexity, often alienates honest taxpayers.
Chief Justice Upadhyaya also highlighted the inherent tension in India’s tax landscape, between the revenue department’s tendency to overcharge and the assessee’s attempt to minimize liability.
This adversarial dynamic, he said, arises from the perception that “tax is a burden on citizens.”
He further noted that the statutory framework of tax laws in India adds to this complexity, with legislation often spanning multiple pages, accompanied by layers of sub-sections, clauses, provisos, and circulars.
“Every tax practitioner understands the pain of going through statutory provisions… At times, one wonders if understanding the law of taxation is more taxing than the tax burden itself,”
he quipped.
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Echoing similar sentiments, Chief Justice of India B.R. Gavai underscored the importance of clarity and consistency in judicial interpretation of tax laws. He noted that conflicting rulings can create uncertainty, undermining trust in the legal system and hindering both compliance and economic planning.
“Taxpayers, practitioners and authorities rely on predictable outcomes to plan their affairs… Contradictory opinions can erode authority and hinder the administration of justice,”
CJI Gavai remarked.
He emphasized that tax law is not merely a technical domain, but one that directly affects livelihoods and daily lives, from individual entrepreneurs to large corporations.
Chief Justice Upadhyaya’s address concluded with a visionary appeal: it’s time India shifts from “unpleasant enforcement” to “cultivating a culture of tax planning.”
This transformation, he argued, requires not only legal reforms but also a change in mindset—recognizing taxpayers as partners in nation-building rather than adversaries.
“Time has come to embrace those who contribute to the economy of the nation,”
he urged.
