The author, founder of tax2.me, takes a cynical view of the Government’s decision to initiate an award scheme for officers of the income-tax department. An award scheme without a corresponding accountability scheme to rein in officers who step out of line and breach the law will encourage assessing officers to go on a rampage and spell doom for the taxpayers warns the author. He urges all stake-holders to protest against the proposal.
The Government’s decision to initiate an award scheme for officers of the income-tax department has raised the hackles of taxpayers across the country. While the fine print is waited and the scheme is worded in elegant language (“display of specific acts of exemplary devotion to duty”), the scheme is probably simply this “Collect more revenue by whatever means – fair or foul – and take home your reward”. The bottom-line of the scheme is unlike to be different from the plain words used by Laxman Das, the ex CBDT Chief who, in his missive to his underlings, was brazen enough to say that the officers’ posting and promotion prospects were directly proportional to the quantum of revenue that they brought in.
Of course, Laxman Das drew flak from the High Court for his brazenness. In UTI, the Court caustically observed “Administrative directions for fulfilling recovery targets for the collection of revenue should not be at the expense of foreclosing remedies which are available to assessees for challenging the correctness of a demand”. But then, who cares for what the High Court says!
The fact that this “award scheme” comes in the wake of (ex) Finance Minister Pranab Mukherjee’s exhortations to the department that they should “leave no stone unturned in ensuring that the targets for the current year are not only met but handsomely exceeded” is not a mere coincidence.
While one can’t deny the fact that the department does have its share of top-quality officers who administer the law with a sense of justice and fairness, the lumpen elements definitely outnumber them. The quality officers do not need incentive schemes for motivation. They know their job and do it dutifully. For the lumpen elements, an incentive scheme without an accountability safeguard is like letting a mad bull loose in a china shop. These officers, who think nothing of stepping out of line and breaching the law on a daily basis, will be uncontrollable if they feel that they will actually be rewarded by the department for doing so.
So, what is the solution? Nearly 20 years ago, Raja Chelliah, the great visionary, had mooted an accountability scheme for the officers of the department. In his immortal words, he had said “Ways must be found to hold the officer accountable for kinds of assessments he makes under present procedure” and “The Assessing Officers should be made accountable for their actions by being blamed for raising demands which are not upheld by a reasonable figure, say 50 per cent, the officer should be given a black mark and reprimanded. On the other hand an Assessing Officer should be protected and defended if he has observed instructions of the Board and followed the Court rulings even though audit might raise objections about his actions.” But, as usual, the Government cunningly cherry-picked the parts of Raja Chelliah’s report that were in its favour whilst dumping the parts that were against it into the dustbin.
So, before thinking of an “awards scheme”, let’s look at some at some of the burning issues where the officers need to be pulled up for gross inefficiency and harassment:
(i) Habitual delay in filing appeals and SLPs:
So much has been said about this that one feels nauseous about it. Though hundreds of crores are at stake, the appeals are routinely filed late by a few months to even a few years. Repeated warnings by courts have had no effect. In exasperation, the Supreme Court threw out an appeal of the department for delay without appreciating the sufferers of its action would be the innocent citizens of the Country and not the inefficient officers. The Court ought to have hauled up the officer(s) concerned and fined them heavily;
(ii) Throwing the law to the winds at the time of recovery:
Courts have gone hoarse “warning” the assessing officers to follow the law whilst recovering arrears but this has as much effect as water has on a duck’s back. Ignoring the stay applications or rejecting them on flimsy grounds, attaching bank accounts without warning, issuing threats and false inducements. The list of transgressions is long. But, you really can’t blame the officers for this. If Chief’s like Laxman Das openly tempt you with promotions and postings for bringing home the loot, who cares for the law?
(iii) Raising exorbitant high-pitched demands by ignoring case laws and binding precedents:
Your success in the department is measured by how much revenue you have raised. The present is important. Whether those demands will be sustained in the future or whether they will collapse like a pack of cards is irrelevant. In this state of affairs, who cares about what the law is and what the precedents say. You make the additions, take home the award, and let the assessee move heaven and earth to shake off the demand.
(iv) Not giving credit for TDS and pre-paid taxes. Raising bogus demands and adjusting future refunds against that:
This is probably the most frustrating of all because the department can take shelter of the computer scheme at CPC to justify its incompetence. A hundred reasons can be given for not granting TDS credit – PAN is not matching, Deductor has not uploaded the form, challan no is not correctly stated – your imagination is the limit. In the meantime, show a bogus demand, charge interest on that and quietly adjust the assessee’s future refund claims against that. This gross harassment has met the ire of the High Court and Tribunal but who cares about what the judicial bodies say or do when there is an “award” waiting for you.
So, that’s how the sorry state of affairs is. Are there any other transgressions? I can’t recollect more though I am sure there must be many others. If you can think of any, do pen them down here because we must all present a united front to battle this irrational and sorry state of affairs from continuing.