![\"\"](\"https:\/\/www.itatonline.org\/articles_new\/wp-content\/uploads\/S.-E.-Dastur.jpg\")
<\/p>\n<\/p>\n
Sohrab E. Dastur, the eminent jurist, has provided a masterful explanation of the reasons for the rampant corruption in modern-day society. He has offered tangible suggestions on what the Government and the judiciary should do to discourage the malaise from spreading further<\/strong><\/p>\n Hardly a day passes without the newspapers reporting an act of corruption by a businessman, a politician, a professional person and, now even sports bodies (the wag may say it\u2019s not cricket!) and, sometimes, (fortunately, very rarely) even by a judge of a High Court or the Supreme Court. As per a recent dismaying report, apparently even the armed forces are not immune from the cancer of corruption. Periodically reports appear of scandals and scams. About 60 years ago we had the \u201cJeep scandal\u201d involving Mr. V. K. Krishna Menon (then the Indian High Commissioner to the U.K. which was said to involve Rs 80 lakh. It is sad that each succeeding misdemeanour makes the earlier one look as “chicken feed: and which, therefore, gets consigned to history! <\/p>\n <\/p>\n One hundred and twenty-five years ago it was proclaimed \u201c\u2026 we meet in the midst of a nation brought to the verge of moral, political and material ruin. Corruption dominates the ballot box, the legislatures, the Congress and touches even the ermine of the Bench.<\/em>\u201d This is a good illustration of the popular belief that the world and its inhabitants do not change nor is the present necessarily an improvement on the past. <\/p>\n Apart from the monetary and economic consequences of corrupt practices, what is reprehensible is that it lowers the moral fibre of the country\u2019s citizens. In 2016 India ranked 79th out of 176 countries in the Corruption Perceptions Index researched by Transparency International. A large percentage of persons interviewed confessed that they had first hand experience of paying or, as they put it, being forced to pay, a bribe. <\/p>\n Corruption is often classified as being of two types. The first is what one may term as \u201cdishonest corruption<\/em>,\u201d that is, corruption motivated by a desire to gain a dishonest or unfair advantage. There is also the \u201cother\u201d type of corruption, which people, to soothe their conscience, label as \u201chonest\u201d corruption \u2013 really a contradiction in terms! It is corruption indulged in to procure or to obtain what is your right but which is being unreasonably and manipulatively withheld or denied. A citizen finds it frustrating, if, for obtaining what he is undoubtedly entitled to, say, a refund he has to grease someone\u2019s palm. The seasoned veteran will, of course, advise that it is better to part with some money today and consequently save the time otherwise wasted rather than to have one\u2019s matter kept hanging for an indefinitely long time and thereafter to receive the same sum in, by then, devalued currency! Though such an approach is morally insupportable it is often difficult, even for an honest person, to resist this temptation. <\/p>\n Edward Gibbon in \u201cThe Decline and Fall of the Roman Empire\u201d viewed corruption as, \u201cthe most unfailing symptom of Constitutional liberty\u201d whilst Edmund Burke in April 1777 warned, \u201cAmong a people generally corrupt, liberty cannot long exist.<\/em>\u201d Corruption is sometimes sought to be justified as being a necessary evil to attain a high and laudable objective. Even the most respected may succumb to this temptation. The story goes that Republican President Abraham Lincoln, a President uniformly and universally admired and who rid America of slavery, (the great emancipator as he is called) realised that though in the 1864 general election the Republicans had secured a sizable majority in the House of Representatives (which would have enabled Mr. Lincoln to get the required 13th Constitution Amendment Bill, passed) the \u201cnew\u201d House of Representatives with the required Republican majority was not to be convened until March 1865. A lame duck session of the members comprised in the outgoing House of Representatives was held from December 1864 to March 1865. Perhaps on account of a premonition, Lincoln wanted the Constitution Amendment Bill to be passed by this (old) House of Representatives even though the Democrats had a majority therein. Realising the difficulty, he tersely directed some trusted lieutenants \u201cthese votes must be procured.\u201d Apparently not the most laudable means were used by them to satisfy the President\u2019s desire. This issue raises the eternal debate of \u201cmeans and ends.\u201d The reason why I said that Lincoln had a \u201cpremonition\u201d is because, as it happened, he was shot on 14th April, 1865 by John Wilkes Booth as he sat in the Ford\u2019s Theatre in Washington. If he had waited for the March 1865 session of the House (with the requisite Republication majority) to be convened, one does not know whether slavery would have been abolished in his lifetime! <\/p>\n If linking of Lincoln with corruption raises a few eyebrows it is worth recalling that Lord Chancellor Francis Bacon, from whose writings we so often quote, was found guilty of being corrupt and fined 40,000 Pounds and, in addition, imprisoned in the Tower of London. His somewhat lame defence was that he was following \u201cthe custom of the age\u201d which is what many of us also plead when confronted with our having contributed to the spread of corruption. <\/p>\n A newspaper article published some 15 years ago very aptly summed up the situation by stating \u201cprotection breeds corruption and corruption finds protection.\u201d One often reads of civil servants going out of their way to shield an erring politician. They say that it is the small fish who get caught in the net: the net is not wide or deep enough to catch the big fish or at least to prevent their escaping therefrom. <\/p>\n It is worth recalling what Justice R. C. Lahoti (later Chief Justice of India) said whilst inaugurating the National Tax Conference organised by the All India Federation of Tax Practitioners (Central Zone) at Indore in September 2002. He perceptively observed, “I am amazed at the patience of the Indian people who endure injustice and unfairness with serenity and resignation. We bear the torture of the laws and brutality of corruption and endure ourselves in such circumstances which would lead to bloody revolution in any other polity \u2026. <\/p>\n Corruption is a cancer eating into the roots of the society. It is difficult to fight against corruption because the chances of success are bleak but this is no reason for despondency. Nobody is born corrupt: it is the vitiated atmosphere in the society and the system of governance which converts the clean into the corrupt. An honest person resists corruption but allurements and temptations at times prevail upon him and once corrupt, even an honest person prefers and finds it convenient to stay corrupt. The seeds of corruption are sown in the mind of the man and the cure, if any, lies in eradicating the seeds of corruption from his mind. An honest revenue official says ‘The honest are hounded; they are humiliated; they are ignored; they are manipulated; they are used, they are punished; they become the laughing stock in society and in their families; even their very honesty is suspected. In spite of that, there are many, many honest officers in the department who remain honest against all adversities. They are a special species; they have to be preserved and protected.’<\/em>” <\/p>\n If there are still some doubting Thomases who shut their eyes to the stark reality they should inquire from a trucker about his experiences at check points and entry points from and into different states\/cities. One estimate says that truckers annually pay unimaginable amounts to avoid unnecessary wastage of their time at check points. In 2009 The Times of India had reported that a survey had shown that Indian bureaucracy ranked the worst in Asia. <\/p>\n It is alleged that one of the sources of corruption is the vesting of discretionary powers in Government officials. Though this is true to some extent I am sure that most tax practitioners must have at some time experienced that the absence of discretionary powers means that an assessee, from whose income tax has been deducted at source, is not in a position to obtain appropriate credit therefor because of some magical Form AS-26 which is required to be filed by the tax deductors and which allegedly robs the officer of discretionary power to take an independent and just decision, whatever information Form 26-AS may\/may not contain. There are reasons too numerous to set out here why there may be a mismatch between what appears\/does not appear in this Form AS-26 and what sum an assessee claims as being tax which has been deducted at source from his income. Taking shelter under alleged non-conferment of discretionary powers to ignore Form 26-AS the Tax Authorities brazenly defy the clear mandate of section 205 of the Income-tax Act. <\/p>\n What is ironic is that though the amount claimed by the assessee to have been deducted at source is not regarded by the officer as TDS for which the assessee must be granted credit, still the same sum is included by the Officer as a part of the assessee\u2019s professional\/business income! Could there be a more glaring illustration of an Officer\u2019s Tax Code: \u201cHeads I win, tails you lose”. Whilst taking such a contradictory stand the Officers ignore even binding decisions of the High Courts. <\/p>\n Corruption does not adversely affect only the rich and powerful. Government collects taxes and levies and has introduced specific aid programmes for the farmers, the poor, the illiterate, the student and the weaker sections for whose benefit the collected levy\/tax is to be applied. Transparency International in a recent report records that only 40% of the grain handed out for the poor reaches the intended beneficiaries. It is reported that huge amounts set aside by the Government under the Mahatma Gandhi National Rural Employment Guarantee Scheme were pocketed by intermediaries and corrupt officials in the name of fake rural employees. Another report says that it is not unusual to pay 2\u00bd times the official fee for obtaining a driver\u2019s licence. Prof. Dibek Debroy and Mr. Laveesh Bhandari in their book \u201cCorruption in India: The DNA and RNA\u201d estimate that public officials may be cornering 1.26% of the GDP. To hide black money Indian businessmen and politicians go international: whether to Switzerland or Panama or wherever. India\u2019s geography is not and has never been a restraining factor. <\/p>\n The Government appears to be fully conscious of the rampant growth of corruption and repeatedly proclaims that it is anxious to control the same. As a first step one must attempt to remove the belief in the minds of the ordinary citizen that Government is out to shield politicians and political parties. For example, Complete (and I mean with a capital C) transparency must exist in respect of donations and donors to political parties. Removal of the secrecy provided by donating electoral bonds is desirable. In this connection it may be noted that it is ironic that though the Whistle Blower’s Protection Act was passed in 2011 and received the Presidential assent in 2014, in so far as I can ascertain, it has not yet been notified. Unless a person who complains about corrupt officials, politicians etc., is assured of some basic protection against vindictive action it may be difficult to track down\/obtain evidence concerning corruption and corrupt practices. <\/p>\n In the Jharkhand Mukti Morcha bribery case (Narasimha Rao vs. The State AIR 1998 S.C. 2120) the Supreme Court held that on account of Article 105 of the Constitution, action cannot be taken against a bribe-taking member of Parliament. Though several Constitutional Amendment Bills have been passed since then this abuse of a Constitutional privilege still remains unattended to. <\/p>\n Mr. C. K. Prahalad in an article in \u201cThe Financial Express\u201d has estimated that if the level of corruption in India was reduced to that which exists, say, in the United Kingdom, the growth rate in the GDP would greatly increase. He estimated that on account of corruption the growth in investment and jobs is less by over US$ 50 billion. <\/p>\n What then are the causes for this state of affairs? In so far as income taxation is concerned, presently, the maximum rates are undoubtedly reasonable, though perhaps the initial slabs could be broadened and the maximum rate reached at a level higher than as at present. It is also for consideration whether the general rate of 20% for tax on long term capital gains requires a reduction. Unfortunately and inexplicably there was a time when the income-tax rate in respect of incomes over Rs 2 lakh went up to 97.5%. At that time in addition to the income-tax a citizen was also subjected to expenditure-tax, wealth-tax, gift-tax and surtax (for companies). Such rates fostered the belief that it was not dishonourable to avoid payment of income-tax when the laws were such that the direct tax payable by a citizen may exceed his total income. This led people to believe (quite wrongly) that it was not wrong or dishonourable to evade the payment of an unconscionable rate of income-tax. After all, human beings are not saints! It is true that these rates were in force for a limited period of time and that this was the position more than 40 years ago. However, the horrendous rates of tax created tax evasion habits and, unfortunately, bad habits die hard and are easily transmitted from generation to generation. People openly flaunted their \u201cachievements\u201d in this behalf \u2013 which egged on others to follow suit. The few years when the rates had zoomed, created a psychology which \u201cjustified,\u201d if not encouraged, tax evasion by corrupt means and this has permeated down the years to successive generations. <\/p>\n A reason often put forward to justify transactions which generate black money is that coloured money is required to satisfy the ever increasing and insatiable appetite of those from whom permissions and licences are to be obtained. Thus, excessive licensing procedures and Government controls played and play no mean role in the generation of unaccounted money. The freer the economy the lesser would be the incidence of corruption. Tacitus said, \u201cThe more corrupt the State, the more the laws.\u201d One could perhaps equally perceptively say, \u201cThe more the laws the more corrupt the State.\u201d What is the vote? <\/p>\n Another cause for the non-eradication of corruption is that even after a corrupt deal is detected, justice is not meted out for decades. Thus, the fear of early punishment and retribution is absent. Where facts so justify the process of filing of a chargesheet must be expedited without in any way sacrificing a full and complete investigation and correct framing of the charge. This means that the Investigation wing has to be suitably and properly staffed so as to be able to tackle the situation. It is the fundamental duty of the State to provide, and it is a citizen\u2019s inalienable right to receive, \u201cfree\u201d justice \u2013 unfortunately even though exorbitant Court fees are charged by the State, reasonably prompt justice is not provided. <\/p>\n Almost a decade ago the hot topic of discussion among assessees and taxpayers was an incident in Kolkata wherein a member of the Income-tax Appellate Tribunal and a professional person were allegedly involved. In so far as I am aware, the matter has not yet reached a conclusion even at the first level. <\/p>\n In March, 2000, Mr. Bangaru Laxman was trapped and a video recording his acceptance of illegal monetary gratification made headlines. Twelve years passed before he was convicted by a Special CBI Court and sentenced. His appeal to the High Court was admitted and he was set free on bail. He passed away before the final verdict could be pronounced. <\/p>\n The Government must spruce up the judicial machinery by appointing adequate judicial officers and judges so that within a reasonable period punishment follows the crime and\/or the person is exonerated and his reputation restored. It is for consideration whether once a charge is framed by a Court in a matter involving corruption or the commission of a serious economic offence the concerned person should be debarred from contesting a public election. This may act as an incentive for him to seek an early disposal and not to derail the hearing with a view to postponing the day of judgment. <\/p>\n As noted above corruption has sometimes touched even the higher judiciary. We have the cases of Bhattacharjee, Ramaswami, K. N. Singh, Veeraswami, Soumitra Sen and Dinakaran to name but a few who apparently strayed from the straight and narrow path and violated their oath of office. Allegations were also made against the conduct of Chief Justice Sabharwal of the Supreme Court. Referring to this case Paul Cohen and Arthur Marriott in their very interesting book entitled \u201cInternational Corruption\u201d (Chapter 7 \u2013 The current state of anti- corruption laws in India) observe, \u201cIn this case instead of taking an affirmative action in ordering an inquiry, the Court sentenced the four journalists, who brought the news to light to four months\u2019 imprisonment for contempt of court…\u201d <\/p>\n More cases of judicial corruption may undoubtedly be exposed if draconian powers are not vested in the Courts to issue notices for contempt. It was reported some 18 years ago that the Attorney-General for India had stated \u201cChances for detection and exposure of corruption in the judiciary are slim unless the law of contempt is amended \u2026\u201d. The Judicial Standards and Accountability Bill, 2012 introduced in 2010 and passed in 2012 by the Lok Sabha still does not appear to have become law. <\/p>\n At the same time one has to remember that some regulatory measures have to be fashioned to prevent loose and unsubstantiated allegations being levelled against persons honourably occupying high judicial posts, particularly as everyday a judge is likely to decide matters in which one party is adversely affected, and who, rightly or wrongly, had and has great faith in the strength of his case and attributes his failure to something more than a correct judicial determination. It is also to be remembered that unlike politicians, judges cannot resort to the public forum for explaining their position. This is a matter which requires public debate and one must evolve a method to protect the honest judge from unjustified public criticism and an over-sensitive judiciary clamping down on even justified criticism. <\/p>\n One has to evolve an acceptable methodology for dealing with judicial corruption as it raises delicate issues. In so far as the Income-tax Appellate Tribunal is concerned, up till now where allegations of substance had been levelled against a member the procedure followed by the President, on being reasonably satisfied that a prima facie case had been made out, was to transfer the member concerned to another jurisdiction or not to allocate judicial work to him. It is for consideration whether transferring a member reasonably suspected of corruptive in essence means transferring corruption. One option is to constitute a disciplinary committee consisting of, inter alias, the President, the Law Secretary of the Government of India, a senior professional and perhaps two others. The Committee should have the power to take appropriate disciplinary action including recommending dismissal of the member. Non-allocation of work to the member under suspicion is a poor alternative. It is on record that two judges of a High Court against whom serious allegations were made were not allotted judicial work by the Chief Justice of the High Court and drew their salary without work till their retirement day! Appeals from orders of the Committee should be limited and speedily disposed of on a priority basis. <\/p>\n In so far as the higher judiciary is concerned, the appointment of an Ombudsman is very desirable. The judiciary in India rightly commands the highest respect. However, the errant action of a few tarnishes the reputation of judges generally. If faith in the judiciary is lost there is very little else which one can look to in the Indian context. <\/p>\n The slow pace at which the enactment of anti-corruption legislation proceeds in india is highlighted very tellingly by Mr. Fali. S. Nariman in his most interesting and informative book \u201cThe State of the Nation\u201d. He notes that the first Lokpal and Lokayuktas Bill, 1968, was introduced in the 4th Lok Sabha and thereafter in several succeeding Lok Sabhas (at least eight in number) and on each occasion the Bill lapsed on account of the dissolution of the Lok Sabha. It was only in 2013 during the course of the twelfth Lok Sabha (almost 50 years after its first introduction) that the Bill with the very laudable objective of constituting an Authority to look into the conduct of the highly placed was passed and that too partly, if not mainly, because of Mr. Anna Hazare\u2019s threat of direct action. This shows the \u201cpriority\u201d successive Governments bestowed on this most desirable legislation. According to Thomas Jefferson the time to guard against corruption and tyranny is before they shall have gotten hold of us. It is better to keep the wolf out of the fold than to trust to drawing his teeth and talons after he shall have entered! <\/p>\n In conclusion, (I can hear sighs of relief!) I leave you with this thought: \u201cWould there be a corruptee in the absence of a corruptor?\u201d Once it is known that a person is \u201cflexible\u201d enough to succumb to corruption he is bound to be exploited. If a person is known to turn a blind eye or a deaf ear, to requests for corruption he is likely to be ignored as one of the unreal and strange persons in the world. Is it not worthwhile to create such a reputation?<\/p>\n Sohrab E. Dastur, the eminent jurist, has provided a masterful explanation of the reasons for the rampant corruption in modern-day society. He has offered tangible suggestions on what the Government and the judiciary should do to discourage the malaise from spreading further<\/p>\n “Dishonest” corruption vs. “honest” corruption <\/h3>\n
Citizens endure injustice and unfairness with serenity and resignation <\/h3>\n
Curb discretionary powers in Government officials <\/h3>\n
Bring accountability – today, even binding judgements are defied with impunity by officials <\/h3>\n
Make donations and donors to political parties transparent <\/h3>\n
Mete out quick justice to create a fear of early punishment and retribution in the offenders <\/h3>\n
Avoid transfer of alleged corrupt ITAT Members from one station to another, set up a high-power disciplinary committee to consider dismissal of tainted Members<\/h3>\n
Appoint Ombudsman for higher judiciary <\/h3>\n
Citizens must abstain from being “corruptees” if they are serious of ending corruption <\/h3>\n
Reproduced with permission from the Chamber of Tax Consultants Journal, May 2017 Edition <\/div>\n","protected":false},"excerpt":{"rendered":"