The author, an eminent senior Advocate, points out that while the goal of the Hon’ble Prime Minister to bring ‘Acche Din’ for the common man is laudatory, the same will not be fulfilled unless drastic reforms are incorporated in the Income-tax laws to bring about accountability for income-tax officials and to prevent the on-going rampant corruption. He also points that the long delay in getting justice from the Courts compels the taxpayers to grease the palms of the officials. He has also listed out a few core issues which according to him require immediate attention of the Hon’ble Prime Minister
Professionals and honest tax payers are having great expectations that this year’s Budget will be a vision document of the Honourable Finance Minister to have a simplified tax structure and better tax administration. The Federation has short listed some of the issues for the kind consideration of the Honourable Finance Minister which can be deliberated upon:
1. Accountability provision in the Direct tax law:
Due to lack of accountability on the part of the Assessing Officers and his supervising officers, it is common to find additions being made for name sake which is not permissible in qusai-judicial proceedings, knowing well that they might not withstand judicial scrutiny. In order to keep a check on such frivolous additions, the accountability provision as suggested by Dr. Raja J. Chelliah, in his report [(1992) 197 ITR 177 (St) (257) Para 5.9] must be incorporated in the Income–tax Act, 1961, taking into consideration that the Honourable Bombay High Court has passed a number of orders against frivolous appeals filed by revenue when the Tribunal has followed the judgment of Supreme Court.
2. Speedy justice in taxation matters by Income–tax Appellate Tribunal which is the final fact finding authority is a need of the hour:
As on 1-12-2014 there are 1,00,420 appeals which are pending before the Income-tax Appellate Tribunal (the “Tribunal”) before its 63 Benches across the country. Pendency has increased due to non-appointment of members to the Tribunal. Though the interview process was completed about six months back, the appointment of members is not yet done due to reasons best known to the Government. It is essential that the members may be appointed at the earliest, which will help to reduce the pendency as well as release revenue to the government, if any.
3. Proposal of appointment of Members of the Tribunal and Customs Excise and Service Tax Appellate Tribunal only for five years may be scrapped as it will not yield the desired result.
4. Formation of regular ‘Tax Bench’ in all High Courts to deal with direct and indirect taxes:
As the provisions of National Tax Tribunal Act have been struck down by Apex Court, it is essential that for quick disposal of taxation matters, the respective High Court may be requested to constitute a regular tax Bench so that tax litigation may be settled within a reasonable time. The Bombay High Court has huge pendency. To clear the old references and appeals admitted, the Bombay High Court may require at least three tax Benches and proactive support from the tax Bar and the Department as well.
5. Transparency in the appointment of members of the Settlement Commission:
To settle the taxation disputes the Settlement commission provision was introduced. If the scope is widened, many tax payers may approach the Settlement Commission. Federation has made suggestions from time to time to bring transparency in appointment of the members of Settlement Commission and some members may be selected from the profession of law and accountancy. In this connection also, process of appointment of members of the Tribunal may be adopted which will be quite beneficial.
6. Reconciliation and arbitration within the department:
A mechanism may be introduced within the department for reconciliation and arbitration with a view to final determination of cases, subject to suitable safe guards, as is the practice followed in Countries like USA.
7. Quarterly circulars on every High Court judgment involving legal issues, may be published on the website of the CBDT.
8. All orders of A.O. may be made appealable to CIT(A) and all orders of CIT & CIT(A) may also be made appealable to the Tribunal.
9. Amendment be made to section 255(3) of the Income-tax Act, 1961 to increase the jurisdiction of the Single Member Bench from 5 lakhs to 25 lakhs. The last amendment was made w.e.f. 01-04-1971. Over the years, due to steep inflation, the rupee value has gone down considerably and therefore the suggestion made is worth considering without any further delay.
10. Direct appeal be provided to the Supreme Court to attain finality on very important issues which are affecting large number of assesees.
11. Special provisions for avoiding repetitive appeals – Chapter XIV-A, provision may be extended to revenue appeals.
12. Postponement of demand be made on account of arbitrary assessment by coercive methods till decision of first appeal. This is necessary because the Dept. has failed to arrest arbitrary and high-handed assessment orders which is the norms of the day.
13. Advance ruling for all resident Indians.
14. Prosecution matters in taxation-Compounding of technical offences may be done by charging nominal charges.
15. Withholding tax on payments made to non–residents under Explanation 2 to section 195 to be restricted to persons having tax presence in India.
16. Hardship arising out of the Supreme Court‘s decision in Goetze (India) Ltd v. CIT (2006) 284 ITR 323 (SC).
17. Research in tax liability to reduce generation of unaccounted money.
18. Honest Officers must be protected.
19. Transparency in tax administration and corruption free India
Government initiative regarding ‘Swachh Bharat Abhiyan’ is well received by the citizens of our Country and everybody is supporting this vital cause. On the same objective, is it possible to have corruption free India? There are good number of officials and professionals whose integrity and devotion to duty cannot ever be doubted. If professionals take the oath that whatever may be the temptation or compulsion they will not indulge in unethical practice, we can have clean and unpolluted tax administration. This is the serious thought we are proposing to our fraternity for debate and response thereto.
The Federation has sent a representation to the Honourable Prime Minister, the Honourable Finance Minister, the Honourable Law Minster and also to the Chairman of the Law Commission. The Federation has presented its views on various issues before the High powered Committee of the Finance Ministry (Refer Pg. No.) in this regard. The Federation has also sent detailed representations identifying problem areas in litigation relating to tax payers. Readers may also send their suggestions to the Office of Finance Ministry by email at firstname.lastname@example.org and email@example.com.
Dr. K. Shivaram
Editor-in-Chief, AIFTP Journal
Reproduced with permission from the AIFTP Journal, January 2015
right request dr shivaramji.
The I.T officer do not follow or refuse to accept the SC judgments should be sevearly punished. Whether NOMO will order to enquire why Cuttack income tax off icers did not carry out the direction of ITAT in matter of Lopamudra Misra
The department should reduce the intervention of human being. for eg. Issue of Certificate u/s 197 should be done online and certificate should be sent to the assessee by post to his address. Now the procedure is that the assessee will have to go the Dept to collect the certificate. While issuing certificate the officials and clerks ask for gratification. Everything should be online so that corruption will come down.
The top bureaucracy in CBDT who are expected to set examples are violating all its circulars etc. causing some sort of fear psychosis among some good staff by initiating disciplinary actions and not concluding for years for no reason. The other lower bureaucrats are citing the plight of such unfortunate officers / staff and try to squeeze the true and straight forward officers. Is it not a corrupt practice?
Kindly arrange To Make Enquiry & rigirous punishment like life time jail with Heavy Penalty with freezing all their assets Against Chartered Accountants Those who are involve in support of black money generation or Tax Audit done by the Chartered Accountant Firm
The purpose of scrutiny to collect tax (generate more revenue considering the case of the assessee/wrong claim either of reason by mistake or intentionally)as per the provisions of the Act. But these are the officers who go wrong way create presser on honest tax payers create heavy demands and ignore the cases of corrupt business men accepting heavy bribe (resolution fee) with the help of corrupt professionals.
Why this happen is ever taken seriously by our Government or the Board or the Ministry…………… even the Government support to all corrupt men, selecting them for higher post. Even in Judiciary approved the name of those persons who paid for their post and not the honest selected by the selection board and recommended their name for selection.
The Department is harassing the assesees (both Corporate and Individual)by sending the system generated notices even for a small deviation. You need to go and search the “Justification” in “Traces” to find out the calculations, There is no window for addressing such grievances.It is malafide
Good article …
you can say must read for Tax Payers
i am writing my random thoughts on indian taxation and its ills as a guide to taxpayers, that might get published may be outside india, that might take several thoughts of this website, presuming this site would not raise objections like IPR but would tacitly approve as every insertion might cite the source of material, as this is in the interest of people of india wherever they are.
i agree with the writer,
if once we trace at least three corruption case on a revenue man, better summarily discharge him, so that he would get for the period he served honorably being duly counted and accordingly determine his pf r pension if he is still eligible.
you need summary justice on revenue officers for a quite many indulge in corrupt practices simply being hand in glove with relevant some corrupt taxation consultants, when once caught ensure these nefarious tax consultants shd be removed from practice summarily, if they think they had been thrown illegally let them move cases at appropriate fora with ue appeal procedures so that the good ones might get saved, but need to undergo litmus test, as they engaged in irrationally attacking kamadenu kind of taxpayers to augment the finances of the governments’ right governance.
once a few are weeded out that consternation would encircle the minds of future delinquents too, a bitter pill is needed to one and all
1 No officer has control over his subordinates. Atleast they can’t order their subordinates to let the assessee know ? the assessee did not get his refund when others who filed later got.
2. Officers do not take responsibility when they were jnformed that so and so clerk has taken some amount . He says that this should not be told to him as the amount was paid without his knowledge.
3. As someone has already commented, they should come in time…not say , when we go early, sir madam will come late. When go @ 12 sir madam has gone to commissioner’s office , when we go after lunch hours, sir madam has left early…todayh…hi..h.hi
4. when CCTV s are installed on roads, entrance, corridors, why not inside the office.
5. When our identity is taken why the staff do not wear ID cards.
6. IF AT ALL THE GOVT. IS INTERESTED TO BRING SO E CHANGE, THE ITO OR SECTION OFFICER SHOULD MEET EVERY PERSON WHO VISITS THE OFFICE. SO that they will know ! ! ! where the things are going wrong – ii is, is it administratio , intentional lethargy…? etc., etc.
i do not understand what do you man by moderation…moderators better go and sit with tax officers and help them if they are not to be hauled up by taxpayers as also by courts…i am sorry what you people understand by moderators.. when you cannot moderate the taxmen’s notices first…great advocacy, great taxation accountants india have ever produced in a coutry where where palkhiwalas like surfaced.
good keep it up your great moderation…!!!!!!!!!!!
facts about tax department is rightly revealed. every one especially tax payers need to read .
The IT department constituted LTU (Largest Tax Payer Unit) in Bangaluru, Chennai, Mumbai, Delhi and Calcutta to the opted largest tax payers of Incometax, Central Excise, Customs, Service Tax etc. These are reported to be operating smoothly. In the same fashion, respected FM might consider creation of such units for the opted large tax payers in each of the Principal CIT jurisdiction so that the departments can function effectively having over them of a supervisory authorities. It may also consider to include prospective GST wings so that effective way of communication of information can be expected.
Officials of all government departments need to be properly instructed that raising issues without substance, like when the word “bhai” is added after a person’s name it means a different person altogether etc., does not go well with the citizens and in private discussions the message that functioning of Indian government has improved does not go percolate even a bit to the desired level but is in fact simply perceived to be tall talks of the government. Such issues are raised more for the purpose of extracting speed money. Along with Swachch Bharat let as also have Rishwat Mukt Bharat which is also a part of Swachch Bharat
For last 15 yrs the income department officers are harassing my entire family as we refused pay Rs.5 lakh bribe to the jcit and acit they demanded in January,2001. On my complaint Mr.Yaswant Sinha ji order an enquiry. However , till date no actions are taken though several petions are sent to Sri Arun Jaitely ji and to Mr Hushmukh Adia the Secy .Finance . It seems the NOMO’s slogan ” Zero Tolerace to corruption” is an empty slogan.
Our tax laws, civil service/conduct rules etc. are replete with sufficient punitive and preventive provisions and safeguards. The real problem seems to be the caucus being developed at all levels of hierarchy in the offices on one side and in the professional field, on the other. At this eve of remembering R K Laxman, he has depicted the nexux between criminals and politicians – showing the same picture in two frames.
We need some miracle to solve these problems.
Dear K R Singhji Adv. Can we file civil claims against IAS, IPS officers and local administration. For filing civil claims do you know how much you have to spend. Unless you are flooded with paisa one can’t do it in our country. The courts themselves are in loss of time, energy, money, harassment, annoyance, judicial indiscipline, etc. I my self was a victim in the hands of Revenue, Police authorities, being a Dy.Commissiner of Income Tax.
What Mr.Ramachandran Guruswamy Iyer Said is true and reflects the state of affairs of the day. Even worse is the dilatory tactics adopted by some AR’s and taxpayers. Having filed the returns with falsified accounts and claims, the Assesses and AR’s deliberately fail to furnish details as required by A.O for completion of assessments with in the T.B. time and at 11th hour they dump stacks of rubbish Xerox copies with the A.O and go away. Is AO bound or not to accept such rubbish? . Worst of all is that if the AO does any best judgement assessment based on show cause notice, the assesses will resort to all sorts of arm-twisting tactics and in places like RAJAHMUNDRY OF EAST GODAVARI DT. OF A,P abuse the Officer on the basis of regionalism(which I suffered at Rajahmundry as a TELANGANA OFFICER, and Local police backed them. Till today even after two years of incident no law is dare enough to tackle them.) , they threaten to KILL the Officers LIKE ME AT RAJAHMUNDRY. My dear all the friends above, please write to the Supreme Court, President and P.M on my behalf to punish tactians and inculcate a sort of tax-discipline and respect for law. The Courts in case of Kachawala gems vs.JCIT observed that there will be a degree of guess work in best judgement assessment.
CENT PERCENT CORRECT. I SUPPORT THE BRAVE ADVOCATE AND STRONGLY SUPPORT HIM.SALUTE HIS COURAGE. HE IS THE REAL HERO AGAINST CORRUPTION.AGAIN AS AN ADVOCATE I FEEL PROUD.
exactly, and with inordinate delay in processing refund claims which is higher than lakhs. and dead response from the officers of ACIT level too.
We would like to add further that, not attending the office in time, sitting in office with other office work or just gossiping with other officer but not attending the assessee/representative/counsellor, having meeting with their senior in the morning/day without taking care of the assessee who is waiting for hearing are other main issues, which may be taken care of.
Dear Editor Sir , Thanks for sending letter.
The problem u have taken is correct .Out of number of type of asking favour ,maximum is things which ought to have in favour of party or assessee. Unless laws are in favour of assessee or parties , problem cannot be solved. How one thing is possible or accepted the moment some reward is given,because there is two side or aspect and for seeking favourable aspect ,if law it self is in favour of parties or assessee things would have been different. Well Govt should understand Big Mountain stay straight because of small stones trees who hold mud,,similarly if officers start helping and showing legal was to public for any work ,nation can flourish more. There are so many impractical laws rules which are speed breaker of progress. Govt. and officers should keep faith in their SUBJECT,.In most of cases for techinical mistakes and formalities parties are penalised or harnessed , this should stop.
Basic problem lies with those professionals, who are comfortable with corruption, as the corruption suitably suits them.They feel happy when settlement is arrived at and they boast themselves of having win the case, albeit at the cost of the assessee and getting unduly enrichment.
@Girish Dave : Dear Sir,
It is the various AOs/CIT & all those officers who want to route the bribe money via various pimps and not vice versa. DG Investigation Mumbai is the prime example for that. You are trying shift the blame from corrupt IT Sleuths to others. Route of Corruption is the department & its staff who damage your case if you do not pay under the table. We all know how soft assessment orders are passed and how money reaches till Higher Administrative Grade.
an excellent article. I have also posted many letters to Hon’ PM in his web, and number of circulars are being issued by the CBDT, but not even one is followed by the officers of the Department. Recently all Wednesdays was announced as grievance day but till now in Tumkuru, Karnataka, not even a single meeting has been held. The Joint Commissioner/ Additional commissioner, Deputy Commissioner/Assistant Commissioner holds 3 to 4 charges and many times we have to wait for months to meet the departmental head.The CPC notices are issued with out any check and unnecessary 245 notices are issued and the refunds not issued even though the Form 16/16A in original is filed on the ground that the same is not appearing in 26AS.For the mistakes made by the deductors the deductee is suffering. Under these circumstances how we can expect good days in the Income Tax Department.Nearly two decade old provisions of 44AB, and cash payments limits of Rs.20,000/- etc are being used by the department to harase the assessees
Very well. It is extremely difficult to get the work done from corrupt cult. They damn bother the high court directions and the CBDT circulars. What a mockery of the system.
The assessees themselves have to be blamed for corruption. They first of all decide how much tax has to be paid and advises the CHARTERED ACCOUNTANT to file ITR accordingly. I wonder how many CHARTERED ACCOUNTANTS/ASSESSEES take seriously the contents of statutory declarations like FORM3CA/CB and so many CERTIFICATES AND DECLARATIONS for claiming deductions under various provisions. Though it is mandatory that everything should have been filed at the time of return yet APPELLATE FORUMS take lenient view and allow the assessees to file the declarations at the time of scrutiny. Unless the CHARTERED ACCOUNTANTS/ASSESSEES take seriously SEC44AB/AC/AD/etc., it is futile to blame the DEPARTMENT. Even in cases of BEST JUDGMENT ASSESSMENT the Department is gracious not to take up special audit under Sec142(2A).
For a bird’s eye view of the last touched upon aspect, attention is invited to a report in the media just a few days ago, on –Dwaraka, Puri included in heritage cities project – LINK
Anyone with a wish or frightful itching to know more, refer comments posted on the website of, – Localcircles (also the Blog @Swamilook, titled – Corruption X Commercialization)
“….the long delay in getting justice from the Courts COMPELS THE TAXPAYERS TO GREASE the palms of the officials.”
Does this observation not smack of a sort of oxymoron! In one’s longstanding conviction, founded on common sense viewing, so long as common men upwards, to law pundits, alike, dreaming for, but choosing to keep selves engaged simply in lip service, nothing more or beyond, to that ever eluding “Ache Din”, no amount of governmental reforms could be honestly expected to usher in that DIN itched for, for decades.
Perhaps, the only hope (on hopes) for any reform lies with taxpayers; they being one of the two willing participants / necessary party to the evil game, – not remaining immune or a consenting party any longer to the root cause but determinedly and single minded refusing to yield to , howsoever forceful the compulsion be, to resort to ‘greasing’ .
That long–aspired- clamored-for ‘DIN’ can be expected to at all dawn, only when the ongoing extremist thrust on ‘commercialization’ – by , besides the rest, the men in governance from to time to time, successively, of every single facet of human life, not barring ‘religion’, but with no exclusion of core professions such as of lawyers and accountants, – is moderated and decelerated; if not hand-braked.
On the not-unrelated-but quite connected topic of ongoing commercialization in the realm of religion, being perpetuated as ever before, a wishful cry for a halt may be found to have been echoed in certain, though remote, quarters.
The situation is much worst in case of CESTAT with limited members and limited benches, similarly the VAT assessments at the state level does not show a different view, ease of doing business is most used word now a days but it has not entered in the DNA of Babus, government at all levels should show will power up to the level of attender to help business, and also facilitate for faster and efficient dispute resolution mechanism of both Direct and Indirect Tax Disputes.
CFO of a German Multinational Company at Bangalore
Corruption is in the core of medical negligence cases also.
1. A rectification application should be deemed to have been rejected if no order is passed in six months from the date of filing and then appeal against the same should be admissible.
2. If refund is not granted within 3 months of its determination, there should be a provision similar to section 221 for imposing penalty on the AO. The CIT should be authorized to levy such penalty within a time bound manner and if he does not do so or if adequate penalty is not levied on the AO, the assessee should have right to appeal to the ITAT.
As far as corruption is concerned, the blame should be shared by all sides to some extent. A corrupt tax official is irksome to some, an honest tax official is more irksome to much larger number. Most of the complaints against the tax officials are against lethargy or conduct and very very few against corruption.
Before putting end to corruption at least the assessing officer should do the following
Come on time
Do not call all assessee on same time
Carryout rectification promptly
Spread the passing of orders evenly instead of bunching up in last one or two months
Complaint box to be kept @ prominent places where complaints can be dropped without identity and vigilance wing can then keep a track check
Only one cellphone per officer clerk to be permitted in office premises and numbers prominently displayed outside cabin
Civil claim for loss may be a weapon against corrupt authorities. Often the orders of IT Authority suffer from legal infirmity and they know the fate of their orders. IT Authority does so for money and goes wrong with considered view of doing it not in good faith so they are not immune u/s 293 of IT Act 1961. A civil claim for loss of time, energy, money, harassment, annoyance, judicial indiscipline, etc. may be filed against corrupt authority. I have issued a letter to many officers why a legal notice for wrong done consciously be not issued against you. My experience is positive. I think this attitude all over India will be helpful to confront them and to boost their consciousness and enforce to do their job in good sense. Thanks
You should know better.Only from promotion and transfer of CITs the bribes received are in 100s crore.Namo is a practical person. How can he forgo such huge, lucrative business.Why should he appoint a FM who was discarded by electorate? He has come through chor darwaja.
IT SEEMS THE FM IS APPOINTED TO COLLECT MONEY FOR THE PARTY THROUGH THE CORRUPT OFFICERS
It is not only the I.T. Department but the judiciary in general has become LITHARGIC and more than CORRUPT , not giving judgements for months together delaying the cases even genuine cases are being dragged by our lawyers for the reasons best known to them only. The landlord cannot have possession of his house from the tenants who is not paying the market rent with motivations , the cases are being dragged for YEARS together . WHY? WHY? and WHY?.
Why can’t they ask the tenant to pay the market rent and stay in the house? or leave.
Very well written. I also wish that tax practioners become clean as Tax Officials.
I fully support your views. Everything is meaningless unless corruption is removed from these two main public body.
The accountability should be linked with the quality of orders which should be judged on the basis of appeal decisions on order passed by AO of CIT(A) during a specified period or such other criteria. Officers failing to meet quality criteria, should be made liable to compensate the assessee for dragging him in unwarranted litigation.
even grievance application did not yield results.
Feeling is generated – why should we pay tax ?
persons are advising to PAY the demands and collect refunds, which somehow i cant digest.
But how long can i continue fighting the department ?
one ITO – I did not pay, imposed penalties etc, which I am fighting since last 14 years ?
Drastic measures be initiated to STOP corruption, in the interest of justice,
mera bharat mahaan
whats happened yesterday is past, we expect a good present
NAMO ACT ACT,
may god bless
my PA NO.AGAPM0059K
I do not aggre. I have sent several petions with document to FM and as no action is taken, the I.T officers are encouraged to harass more. We have form an organization to fighit.
my PA NO.AGAPM0059K.
more than 20 years have passed. my refunds are pending before ITO.
I am not to pay them.
I am not gtg my due refunds.
complaints to commissioner, chief commissioner are of no use.
achchhe din kab aayenge ?
Who’s responsible for the corruption in the IT department? Officials, Practitioners, Politicians or Tax payers????? We should try to correct each one of them for which tax rates should be low.
The Major responsible Comes To the professionals who are doing mediation for Tax evadation promoting with public and working as bridge between officer & assessee for Black Money Generation In Kanpur Major Big Chartered Accountant are doing this act they have also framed Subbroker Firm For Black To white & white To black like Swarna Financial Services by Swarna Singh Munjaal This firm has made so many fake Transactions & issued bills to Client Like Mohd. Iftekhar of M.D. of Ruksh Group
Basic Reason for Corruption is to maintain documentation in detail to comply with all the laws are practically impossible in business as there has to be some descripancy due to practical aspect of running the business. As every business man wants peace of mind they adopt shortcuts because they know if money is not paid they will go in much details and one or other descripancy will be thereSo what needs to be incorporated is not to harass the tax payers for minor faults.
Other thing will be to limit the scrutiny of Books of Accounts to the reason for opening of Assessment only. If any other suspicious arouse issue the fresh notice. So scrutiny will be more effective & less harsh. Also the same can be made online by which scanned copy can be mailed or uploaded to the website of Departments and personal hearing is to be reduced to minimum which will serve dual purpose of saving time on the part of consultant & scope of corruption is eliminated
I agree with what has been written by very experienced & senior practitioner of tax laws who has a good reputation. However, he has not appeared enough before the lower levels of AO/ CIT. The intermediaries are equally to blame as they also have their pie in the corruption. Who is going to check them who are equally responsible. At higher levels in the department, ration of honest would be more than such ratio among the intermediaries.
One of the most important aspect most ignored is the speedy order giving effect and issuance of consequential refund. In a case with us the ACIT range 10 is not passing the order giving effect to ITAT order as it entails a refund of around 7 crores which were collected upon attachment of bank accounts. We have been forced to file a RTI application and now the AO says that he has been asked by the CIT to pass a high pitched assessment order for next years so that refund can be adjusted. That way collection of tax will look good.!!!
IS ANYONE LISTENING????
As in Excise & Service Tax, a certain fixed percentage of the core tax demand may be determined & paid before one goes in 1st appeal & 2nd appeal ( subject to exceptional demands ) so that the terror of high demands, coercive recoveries & insistence of 50% total demand payment may be scrapped.
The DRP system does not seem to have worked and perhaps so may the Approving Panel system u/s 144BA under the GAAR regime slated to start from 1-4-16.
Lastly penalty esp 271(1)(c) regime be diluted so that assesses may take the tax hit , at bets, if penalty is waived. Litigations can come down by this
Very good article sir, I just want to say one thing, why every experts are escaping the accountability part, there is a basic problem in our tax system which need to be address and as we always expecting the same from every Govt., but nothing is happening, they are just coming and going.
No law can make India free from corruption until it is not implemented and associated to citizens of the country. Maximum people of our country are unaware about the tax laws; even those assessee who all are paying tax also.
A single window tax system is required. It will help govt. to count less tax evasion cases.
Transparency in Tax Administration is must, and that is possible when a single window tax system is there.
Contradictions between section and rules/guidelines be ironed out to clarify that only the section will prevail.
a. Section 192 permits loss from House property to be set off against salary income for determination of TDS on salary. However the Circular states Income from property to be considered is “only” from self occupied property.
b. Research and Development Expenses – Section lays down any expenditure (other than cost of land and Building) is eligible for weighted deduction; DSIR guidelines state that rent in respect of premises will not be allowed as deduction; professional fees not to be allowed; rates and taxes in respect of premises will not be allowed; outsourced professional fees are not allowed.
Can guidelines / rules / circulars over ride the sections?
The department and the powers that be are well aware of the kind of corruption in the department and those who are corrupt. Still the silence and the indifference of the powers that be is amazing. It looks like they would like to continue to this state of affairs.
Suggestions made are very good but what about accountability provisions in the Acts, do the Officers in Govt. will allow / suggest Govt. to do so?
While on the subject the role of Tax Consultants in aiding and abetting corruption need also be discussed and suitably dealt with.
Attention Editor-in-Chief, AIFTP Journal: Please see recent CBDT circular on section 143(1D) which indirectly indicated that case selected for scrutiny as is assumed should result in additional demand therefore the processing of return after the selection is barred. Under the law such assumption / presumption is an indirect indication to AO to raise the demand to justify the selection return for scrutiny. Apparently the CBDT is not supposed to drew or indirectly indicate so. Prior to the circular generally in all cases the return were in routine is processed despite notice u/s 143(2).
This type of circulars in my view not only increases the corruption but also strengthen the AO.
The so-called withholding tax on Non Residents is actually a tax on the residents since the Non Residents demand payments on Net basis. In that case, the tax is left to be borne by the residents who therefore incur higher costs as compared to their competitors and thereby become non-competitive.
Further, there should be a system of giving clarifications on the IT website for rules and matters which are not clear or vague. This would help the Department to tighten the regulations and also reduce litigation.
Corruption in the income tax department is rampant and well known and it is the lack of will from the top to take stern and fast punitive action that encourages corrupt practices. Sheer slogans against corruption, observing anti-corruption week and talking of high morality principles is of no effect and only demonstrative, quick, punitive action against both the revenue officers and the practitioners can instill fear and reduce corruption. Does the government have the real will to reform or is it just a political gimmick is to be seen.
There should be name and shame approach to curb corruption within department and such posts should be there atleast for 6 months on Departmental website
R S Nambi