The author, one of the innumerable victims of the department’s gross inefficiency in matters of TDS credit & refunds, sees a ray of hope in the High Court’s tough stand in seeking to rein in the department’s wayward ways. The author urges all affected tax payers to raise their voices against the department’s harassment and strengthen the Court’s hands.

“Courts are not meant only for the rich and the well-to-do, for the landlord and the gentry, for the business magnate and the industrial tycoon, but they exist also for the poor and the down-trodden the have-nots and the handicapped and the half-hungry millions of our countrymen” Bhagwati J. in Peoples Union for Democratic Rights v. Union of India (AIR 1982 SC 1473)

When Anand Parkash, FCA, wrote a letter dated 30.4.2012 to the High Court, he did so in a sense of utter helplessness and frustration. He was voicing the angst of millions of tax payers across the Country at the numerous difficulties faced by them due to the faulty processing of Income-tax returns and TDS credit. In heart-felt emotion but with a clarity that years of professional training as a Chartered Accountant had bestowed, Anand Parkash meticulously listed out his litany of woes. Anand Parkash pointed out that in processing the s. 143(1) intimation, there was invariably a mismatch between the TDS credit claimed and the TDS credit granted and demands were raised on this score. The department ignores the figure of TDS credit claimed and mechanically grants credit for the credit shown in the online computer records of Form No.26AS. If the assessee writes a letter to protest against the department’s action and produces proof of the TDS, he is ignored. Against the bogus demand so raised, future refunds are adjusted.

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The author compliments the Supreme Court for its sagacity in dealing with a potentially explosive communal issue in a sensible & mature manner whilst rapping the Government hard on its knuckles for perpetrating loot by the system of patronage and granting of favours in the guise of the “Goodwill Hajj Delegation”

It started as a political stunt with an eye on the powerful Muslim vote bank but over the years, the expenditure was ever-increasing and putting an enormous strain on the exchequer. Thanks to the burgeoning population and inflation, the number of pilgrims and cost for the Haj Pilgrimage soared from 21,035 pilgrims and Rs. 10.51 crores in 1994 to 125,000 pilgrims and Rs. 685 crores in 2011. While the air-fare was Rs.54,800, the pilgrims were charged Rs.16,000 and the balance of Rs.38,000 was borne by the State as a “subsidy”. One would have thought that in a secular State pledged to treating all religions equally, singling out one community for preferential treatment would smack of discrimination but surprisingly, in an earlier judgement in Prafull Garodia vs. UOI, the Supreme Court upheld the constitutional validity of the subsidy.

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The author is upset at the recent judgement of the Supreme Court in Post Master vs. Living Media India that if the department delays filing an appeal without sufficient cause, the appeal has to be dismissed to “teach the department a lesson“. This amounts to punishing innocent citizens for the incompetence of one officer says the author. Instead, the incompetent officer(s) should be made to pay costs from his pocket to “teach him a lesson” rather than to dismiss the appeal and prejudice innocent citizens, argues the author.

I just can’t understand why Judges keep talking about it but just can’t do anything about it. Since time immemorial, Judges have been lamenting the indifferent attitude amongst the officers in the department towards filing appeals in time. Almost every single appeal is delayed – some by a few months and some by a few years! Judges give an earful to the department’s counsel but then meekly condone the delay. This has become a ritual.

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What was in the realm of fantasy till yesterday is now in the realm of reality thanks to the forward-looking approach adopted by the Tribunal. The Tribunal, grappling with the problems of paucity of Members and the increasing case load, is contemplating setting up E-Courts/ E-Benches to solve the problem. This will help clear the pendency of cases and bring justice to the assessee’s doorstep. If the concept is successful, it can be extended to the High Courts & the Supreme Court. The author explains the practical implications of the proposal and makes suggestions on how the concept should be implemented to make it a grand success

The Income-tax Appellate Tribunal which was established on 25th January, 1941 has completed more than 71 years of its existence. It is considered as mother of all Tribunal’s established in our country. It has 63 benches at 27 stations. The Hon’ble President of ITAT Mr. G. E. Veerabhadrappa with the help of Hon’ble Vice-presidents and Members desire to establish e-Tribunal for better administration of justice.  Tax Bar, Departmental representatives and Hon’ble Members of the Tribunal had an interactive meeting with the Hon’ble President of ITAT on 2-3-2012 and all the members present at the meeting are of the considered view that the concept of e-Tribunal will benefit the assessees, tax administration and tax consultants. It will also benefit the Institution in reducing the pendency of tax appeals and substantial amount of tax payers money will be saved which otherwise required to be spent for setting up the Benches, at different places.

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Its’ that time of the year when Tax Officers across the Country go into a frenzy to collect taxes by fair or foul means. And with the CBDT Chairman’s brazen promise to link promotions and postings to the quantum of tax recovered, it will be a no-holds barred blood fest between the assessees and the Tax department apprehends the author. The absence of an accountability mechanism to punish the Officer in case the tax demands are held to be untenable means that there is no deterrent to prevent frivolous high-pitched assessments muses the author

January, February & March of every year is very important for the tax administration as they have to meet the target of tax collection and the assesses have to face the recovery proceedings, whether the additions are justified or not. Recent paper reports says “Income tax raids to increases as tax collection falls short”. Another leading paper carried the news that “Collect more taxes to get rewarded”.

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On the occasion of the “Foundation Day” of the Tribunal, the author ponders over what can be done to improve the functioning of the Tribunal. Using his vast experience, he makes a check-list of the known problem areas which invariably result in adjournments & delays. The author implores professionals to be proactive in ensuring that speedy justice is delivered to the assessees. The author also gently reminds the Hon’ble Members of the immense power vested in them to do justice to the parties

The 25th January, 2012 will be the foundation day of the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal which was established on 25th January, 1941 will be completing the 71st year. When we enter 72nd year it is the time to look back and learn which are the areas which requires to be debated and implemented for better administration of justice, so that this mother Institution retain its glory as one of the finest institution of country. In the year 1988-89, the pendency before the Appellate Tribunal was 3,00,597 cases where as on 1-1-2012 the pendency before the Appellate Tribunal is only 60,241, out of which 18,193 appeals are pending before the Income-tax Appellate Tribunal Mumbai. (Refer page56) One must give deserved credit to the institution for making all efforts to reduce the pendency of cases. This is the only institution where the pendency has reduced where as all other courts and institutions the pendency of cases have been increasing every year. For better administration of justice delivery system before the Appellate Tribunal we make an appeal to professionals to consider the following check lists, which will help the Appellate Tribunal to deliver speedy justice:-

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The author goes ballistic over the Rolls Royce Plc vs. DDIT case and claims that Rolls Royce’s “timid surrender” against the damning findings of the AO proves that even marquee companies like Rolls Royce are not averse to pinching a few dollars from the exchequer of third world countries if they think nobody’s looking. Rolls-Royce must be prosecuted for tax fraud demands the author

The recent report in the Economic Times about how multinational companies were using their subsidiaries and affiliates to avoid taxes in India made for shocking reading even as a lot of readers reacted with disbelief and a sense that the author was exaggerating the issue.

However, the case of Rolls Royce Plc, UK vs. DDIT which ended in a whimper in the Delhi High Court, exposes the myth that marquee companies like Rolls Royce, with supposedly high governance standards, are supposed to above board when it comes to compliance with the laws of the foreign countries that they do business in.

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