Around 75 per cent of the cases decided by the authority originate from Maharashtra, said K Shivaram, chairman, representation committee of the All India Federation of Tax Practitioners (AIFTP) adding that representatives appointed to appear before the AAR are also mostly from Mumbai.

The AAR is a quasi-judicial authority with a bench of three members. Set up in 1993, the independent authority was deciding only income-tax matters for the non-resident Indians and foreign companies until this year when its scope was extended to customs and excise matters. Residents are also permitted to approach the AAR.

The AIFTP has urged the ministry to constitute an additional bench to cover Maharashtra, Gujarat, Goa and Madhya Pradesh. "After analysing the work of the additional bench, the government can set up more benches at Calcutta and Chennai," hesaid.

Initially, the Settlement Commission also had one bench at Delhi but in a short period additional benches were set up at Mumbai, Calcutta and Chennai so that more assessees could avail themselves off the benefits, said Shivaram. "The additional benches have worked well and have benefited revenue and tax payers," he added.

In a communique to the finance ministry, the AIFTP has said that a new bench at Mumbai would not only encourage small assessees to approach the authority but will also help reduce litigation.

According to the federation, of the three lakh appeals pending before the Income Tax Appellate Tribunal (ITAT) around 75,000 are from Mumbai. "If a additional/permanent bench of AAR is constituted, these litigants may avail the benefit of the authority," the communique states.

"There are hardly 22 rulings which are reported in the income tax reports (ITRs) of which 75 per cent are availed by Mumbai-based assessees and also attended by representatives of Mumbai," it adds.

For instance,the rulings in the case of MA Rafik and Dr Rajnikant Bhatt on the issue of India-UAE DTAA also emanated from Mumbai. Thereafter, more than 60 cases were decided on the same issue where all the applicants and the representatives were from the city.