The government has linked the appraisals of commissioners of income tax (appeals) to the number of rulings they make in favour of the tax department. This has spooked companies and tax experts who have told the government that this will skew decisions and lead to greater litigation and so-called tax terrorism. The government has rejected the contention. The commissioner of income tax (appeals), or CIT(A), is the first court of appeal in a tax dispute.Their appraisals will depend on “enhancing the assessment, strengthening the stand of the assessing officer or levying penalty”, according to the Central Action Plan (CAP) of Central Board of Direct Taxes (CBDT) that ET has seen. Commissioners also have to meet annual targets, as per the action plan.The government appears to have changed the definition of a ‘quality order’ on the basis of which appraisals will be conducted, experts said. According to the CAP, a commissioner can get “extra credit” for enhancing, strengthening or levying penalties on a taxpayer. Tax experts say that the new system will mean that the CIT (appeals) would be focussed on strengthening the tax officer’s stand rather being neutral.“The government has been trying to reduce tax litigation and this may be against the overall intention to reduce tax litigation,” said Paras Savla, partner at tax firm KPB & Associates. “Many companies and industry institutes are looking to raise this issue with the government as this could potentially lead to a lot of problems for taxpayers even in genuine difficulties or cases.”The government said the new metrics wouldn’t affect rulings as appraisals were dependent on other factors as well.“Additional weightage to the disposal of appeals is provided in situations where the CIT(A) has to spend more time and make extra efforts for such appeals, thereby making disposal of such appeals a more strenuous/rigorous exercise compared to an appeal where no such action is required to be taken by the CIT(A),” a CBDT spokesperson told ET in an email.Legal experts said the new measures raise questions about possible conflict of interest.“The CIT (appeals) is a first appellate authority and linking performance appraisals to pro-department rulings could have an impact in long term,” said Amit Singhania, partner, Shardul Amarchand Mangaldas. “Legally it would be interesting to see if such rules amount to conflict of interest of CIT (appeals).”The spokesperson added that enhancing the tax assessment was done only in a very small percentage of appeals and the provision of additional credit can’t be said to influence rulings against taxpayers. Therefore, any fear in the minds of the taxpayers is unfounded, he said.