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CIT(A), CA And MD Of Essar Group Held By CBI For Bribe Of Rs. 2 Crore

In a shocking incident, an IRS officer who is presently serving as a CIT(A), a Chartered Accountant and senior officials of a large blue-chip company have been arrested by the CBI on allegations of demanding, and accepting, a bribe for passing favourable orders.

According to a press release issued by the CBI, B.B. Rajendra Prasad, an IRS officer of 1992 batch and presently posted as CIT(A-30) in Mumbai, Pradip Mittal, Managing Director of Essar Group of Companies, Shreyas Parikh, a CA working with M/s G.K. Choksi, and others have been arrested by the CBI.

Modus operandi


(Image Credit: One India News)

The CBI has alleged that the CIT(A) passed an order allowing an appeal filed by Balaji Trust, a private trust of the Essar Group.

It is claimed that the CIT(A) demanded a bribe of around Rs 2 crore for passing the said favourable order.

The CIT(A) directed that the bribe should be delivered to Manish Jain, who in turn was required to transfer it to Suresh Kumar Jain in Visakhapatnam, Andhra Pradesh.

The CIT(A) took leave and went to Visakhapatnam and demanded that a part of the money be delivered at his residence in Visakhapatnam.

To the bad luck of the CIT(A), the sleuths of the CBI laid a trap and caught Prasad while receiving a part of the bribe amount – Rs 19.34 lakh – from Suresh Kumar Jain. Both were arrested.

The balance bribe amount of about Rs. 1.50 crore was seized by the CBI from Suresh Kumar Jain.

Essar Group pleads innocence

The Essar Group claimed that they engaged a reputed CA firm named M/s G.K. Choksi to prepare written submissions and that the CIT(A) allowed the appeal because he was convinced with the merits of the matter.

Our executives are innocent and the company stands by them. We are confident that on investigations the CBI will come to the same conclusion,” the company said.

Recovery of property

The raids at the offices and residences in Mumbai and Visakhapatnam of all the accused has led to seizure of several property investment documents, details of bank accounts, three bank lockers and other incriminating papers.

Earlier, several high-level IRS officials have been arrested for alleged corruption

There is a long list of high-level officers of the Income-tax department who have been caught red-handed by the CBI.

Earlier, a Principal Chief Commissioner (IRS) named Janaki Arun Kumar was arrested By the CBI for alleged corruption.

Another Chief CIT named Anil Goel was arrested for allegedly amassing a fortune of Rs. 30 crore from extortion.

M Krishnaswamy, an officer of the 1988 batch of Indian Revenue Service (IRS), who is of the rank of Commissioner of Income-tax and is presently posted as Director (Investigation), Settlement Commission, Delhi, was arrested for amassing wealth of Rs. 6 crore which was evident from the palatial bungalow that he built in Palani, Chennai.

There have also been convictions of the accused from time to time. One V. P. Shamsuddin, then Joint Commissioner of Income Tax (Appeals-II), Bangalore, was convicted u/s 13(2) r/w 13(1)(d)(ii) of Prevention of Corruption Act and sentenced to three years Rigorous Imprisonment with fine of Rs.3,00,000.

Summary dismissal of officials for incompetence, corruption

Earlier, the Government took the view that there is no point in trying to prosecute the alleged corrupt officials because of the weakness in the judicial system. Instead, it decided to summarily dismiss all officials who were perceived to be corrupt and or incompetent. This press release makes that position clear:

There is a general perception that no action is taken against the defaulting tax officials for their non performance as well as in case of harassing the tax assesses among others. The present Government has taken various steps to change this perception following the principle of good governance. After the present Government took over two years back, it has taken strict action against such revenue officers/officials in order to fix their accountability.

For the first time, 33 officers / officials of the Revenue Services, including seven Group ‘A’ officers, have been prematurely retired for non-performance under Rule 56(j) of CCS (Pension) Rules. Further, 72 officers / officials have been dismissed including six Group ‘A’ officers, in other departmental/ disciplinary actions in the last two years.

More dismissals required

Unfortunately, the momentum of the Government in weeding out the alleged corrupt and incompetent officials appears to have waned. The Government needs to wield the broom again in an aggressive manner and sack a large number of officers so as to send the clear message to the remaining that corruption and/ or incompetence will no longer be tolerated.


17 comments on “CIT(A), CA And MD Of Essar Group Held By CBI For Bribe Of Rs. 2 Crore
  1. Varaprasad Daitha says:

    The CBDT is filled with many cadre loving and supporting IRS Officers and they forgotten the Rule 56(j). If at all it were to implemented to the lower levels. Even in 1980s it was applied to subordinates and not to the cadre of IRS.

  2. R Swaminathan says:

    Rule 56(j) has been invoked earlier also to dismiss officers of the department,in early 80s and it is not the first time as mentioned in the press release.

  3. CA Deepak Soni says:

    Where the matter is right now as on 11 July 2017 ? The matter will be amicably settled by the CBI , The Income tax officials , The CA and all their political and bureaucratic friends. It is only the people who have no influential contacts are being punished.The fishes caught are very big and have lots of fat and therefore there is no fear of any scar.

  4. CA Deepak Soni says:

    All the big guns are involved in the scandal.All are very influential having very powerful contact in the North Block and South Block. All are very very wealthy having millions of rupees to protect themselves.nothing is going to happen to them.The w
    case will be made absolutely weak on the papers and all will be acquitted with the honor. The CA has already started having reputation of settling big cases and has established his capacity of bribing rs @ crores.

  5. b.s.waghela says:

    Well said. Nowadays most of the CIT(A)s are reading demand notices first, instead of Grounds of Appeal. Thereafter they demand minimum 20 % bribe with reference to demand raised. If there is no response, they give frequent adjournments. This is my personal experience. Remedy is to post persons of integrity as CIT(A)s. and corrupt should be posted as CIT(TDS), CIT(Audit), CIT(DR) etc.. Some corrupt should be sent home under Rule 56(j) of the FR.

  6. V N KULKARNI says:

    EVEN IF YOU HANG IN PUBLIC THESE CORRUPT OFFICIALS,THERE WILL BE NOT BE ANY LET UP IN ACCEPTING BRIBES.IT IS THEIR BIRTH RIGHT TO DEMAND BRIBE AND IT IS OUR DUTY TO PAY THEM.

  7. Varaprasad Daitha says:

    It appears that the issues involved appears to be linked to exemption of funds to a trust under Corporate Social Responsibility. The concept of CSR is a laudable one. But recently it is being heard that funds are being flown back to the corporate from the receiving trusts. A systematic schemes had been designed to be fool the Incometax department. So the Finance Ministry should make a study of all such schemes.

  8. Varaprasad Daitha says:

    There are still some higher officers who did not mend their attitudes even after the present government had taken some steps like Rule 56(j) as reported in the above note. It reminds the concerned to address all the higher authorities the need for mend lest face the consequences through a series of class room sessions. The CVC should consider a series of programs of education. The government should also resort to use the Rule 56(j) extensively so that the corrupt or tempted to be corrupt should weigh all repercussions. Similarly the discretionary powers vested in the hands of such corrupt officers should be minimized. This is not a difficult task.

    • b.s.waghela says:

      Invoke Rule 56(j) of the FR and send them home. Let them go to Courts-CAT. There should be quarterly Review of cases for this purpose ; and a quota should be fixed for each CIT/CCIT and if any one fails to suggest names, he should be sent home under this Rule. Such quota was fixed in 1975 and 1985; and since then this Rule is forgotten. Most of the Officers even do not known in which book Rule 56(j) is to be found.

  9. sudhir kulkarni says:

    why we are appeal to such higher authorities for justice,when these types of incidents happens, no trust and no natural justice is expected.

  10. BHALCHANDRA VYAS says:

    Corruption is human weakness. This can not be eradicated. IF FORMULA LIKE STT IS INTRODUCED THE ENTIRE CORRUPTION CAN BE REMOVED. It is because, There is no any scope of providing relief or harassing assessee. MODIJI HAVE A GREAT TEAM OF EXPERT DEVOTEES. IF HE CAN DO IT WITHIN HIS TENURE NEXT GENERATION OF INDIA MAY BE TREATED AS LUCKY ONE.

  11. vishal says:

    Mindset of the officer need a radical change. Simultaneously it is also true that unless and untill assessee’s will not stop misusing the income tax provisions to garner undue benefits, bribing of the officers will not stop. Further, it is also an open secret that even after an assessee has all the valid documents and he has claimed deductions in justifiable manner and according to income tax act the assessing officers and below rank people demands money and other valuables (mobiles, washing machine, cricket match tickets, etc.). When will this mentality change? One cannot carry money to the heaven (hell) after the death….

    • CA Deepak Soni says:

      Narendra Modi has hired in his economic the politicians and the bureaucrats who are highly arrogant ,totally ignorant and corrupt.The nation is fast moving towards unprecedented financial crisis.It is a stupidity to expect anything from him.

  12. NATARAJAN GANESAN says:

    IN THE INCOME TAX DEPARTMENT 75% OF HIGHER LEVEL OFFICIALS ARE CORRUPT. ONLY THE POLITICIANS ARE SAFEGUARDING THE CORRUPT OFFICIAL BY TAKING BRIBE FROM THEM. OUR DELHI CM KNOWS VERY WELL ABOUT THIS SINCE WAS WORKED IN THE IT DEPARTMENT. BUT HE WILL NOT OPEN HIS MOUTH ABOUT IT DEPARTMENT. I HAD VERY GOOD OPINION ABOUT UNION FINANCE MINISTER ARUN JAITELY. HE KNOWS WHAT IS HAPPENING IN THE IT DEPT. BUT HE WILL NOT TAKE ANY ACTION AGAINST THEM FOR THE BEST REASONS KNOWN TO HIM. IF THE GOVT REDUCES THE TAXES, PEOPLE WILL NOT RESORT TO BRIBE AND PAY THE TAX HONESTLY AND THE GOVT WILL GET MORE REVENUE

    BUT FOOLS ARE RULING OUR COUNRY AND FOOLS ARE ELECTING OUR REPRESENTATIVES

    I DON”T THINK, GOD WILL HELP US TO OVERCOME THIS MENACE

    • ABHIRAJ RANAWAT says:

      Dear Sir, After announcement of demonetisation the GOI could have continued earlier income disclosure scheme but they come ahead with another novel scheme of 50% tax and 25% interest free deposits for 4 years that to after a months time. Had they continued with the old scheme people would not have gone to bankers and jewellers for conversion. Here in the name of the equity GOV wants everything under the sun (incl which is not legitimately due to it.)
      The tax rates should have been reduced. The list of exemptions and deductions should be shortened. It will reduce corruption. But not in the name of simplification and rationalisation we have GST (made on the back drop of excise laws). The GOI for increasing GDP( not be increasing production but by tax collection) has introduced GST. The higher rates and tedious rules mentioned in it will further increase corruption. Minimum 37 Returns for 1 single registration is all what we get in the name of simplification.

    • b.s.waghela says:

      Very well said. But reducing tax rates is not the remedy. High peached assessments should be avoided and the AOs who are in habit of making high-peached assessments without any reasonable basis should be punished.

      • ca.dev kumar kothari says:

        Read with interest earlier comments posted by various visitors. Reasons for corruption are greed and power, particularly power to harass. Power to allow relief is not source of corruption but power to deny allowable relief, or delaying favourable action, are the source of corruption.
        Power to threaten taxpayers is another source of harassment. Merely by threating to carry survey , search make additions, levy penalty etc. Many of notices issued by tax authorities contain warning that in case there is no compliance there can be levied penalty. This itself is enough for small taxpayers to compromise with tax officers. If a taxpayer do not compromise, it is likely that he will be harassed.
        In case of Essar also it may be case that just to obtain lawful relief they had to bribe, because if officer acted in illegal manner and denied lawful relief, the tax payer will be burdened with huge demand for tax, interest, penalty and possible prosecution.
        At level of CIT(A) hearing appeals again and again and not disposing off or disposing them wrongly denying relief allowable as per binding precedence is common in many cases.
        Therefore, there should be accountability of Tax officers for wrong additions, disallowances, rejections of petitions wrongly or keeping matters pending for long periods and all such kind of wrong actions or inactions.
        Unfortunately in NAMO government also field officers are getting more and more power and freedom to harass tax payers. Then how you can expect that corruption shall reduce?

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  1. […] that an IRS officer named B.B. Rajendra Prasad, who is presently posted as CIT(A) in Mumbai, was arrested by the CBI for allegedly receiving a bribe of Rs. 2 crore for passing favourable appellate […]

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