Chief CIT Used Strong-Arm Techniques To Extort Bribe From Hapless Taxpayers: CBI Report

Pursuant to the recent arrest of Principal Commissioner Sailendra Mamidi and other top officials by the CBI for allegedly demanding and receiving bribes from taxpayers, the CBI has filed a report in Court in which it has presented an alleged nefarious nexus between fixers, businessmen and corrupt Income Tax Department officials.

According to a report in the Hindu, the CBI has revealed that the suspect officials routinely threatened businessmen with re-opening their I-T assessment of earlier years, surprise I-T surveys and imposition of unreasonably high tax liabilities to pressurise them to pay a bribe.

Not surprisingly, the alleged corrupt officials led an alleged opulent life. While one official hoarded contraband liquor in his house to host his superiors and curry favour with them, others regularly stayed in hotels, resorts and apartments owned by rich assesses. The suspects are also stated to have leaned on well-heeled businessmen to underwrite their family vacations and air travel. Many lived in rent free accommodation paid to by affluent tax payers in their places of posting.

Some officials are stated to have received valuables as gifts from businessmen while others regularly went on foreign trips paid for by rich tax payers in their jurisdiction.

Principal Commissioner Sailendra Mamidi, the prime suspect, is stated to have been enriched by Rs.40 lakhs to Rs.50 lakhs in a short span of three months. Anil Goel, another Chief CIT who has also been arrested By CBI, is stated to have amassed a wealth of Rs. 30 crore.

It is also revealed that certain auditors, chartered accounts and businessmen acted as “conduits” for the corruption. The said middlemen also held or managed the ill-gotten wealth of the corrupt officials.

Meanwhile the CBI is stated to be hot on the heels of the alleged middlemen and is in the process of identifying them. It is also stated that the electronic communication between the suspects and the auditors was being collected and analysed to establish the criminal link.

28 comments on “Chief CIT Used Strong-Arm Techniques To Extort Bribe From Hapless Taxpayers: CBI Report
  1. bobjee Kurien says:

    Lessons need to be learnt from History.History is the leading light which ensures the path ahead is clear .The history that comes to my mind is the French revolution (where it is said when people were starving they were asked to eat the cake!) The Russian revolution and the silent chinese revolution which brought in all the chinese together for a common goal.India needs a absolute cleansing .The administration calls for a radical shake up. Hope it comes in fast .The administrators need to know that they are serving the indian people and not the british

  2. Taxation economics is obviously to keep a meaningful control on resources, as it is fully known fact that resources are always scarce.

    Human behavior is such that it always looks for excessive consumption, more so when liberalization took place.

    No constitution ever talked about economics as such, is a world known fact as none can control human behavior which goes on changing when a new set or group of people join together as per their own thinking mechanics to generate funds, as there is no one correctly devised route as such.

    When there was control on liberalization of economic demands, the ideas ran riot, as every one start thinking he is a master contriver.

    That cannot be possible in economics as in real hard core sciences or real pure mathematics.

    Using econometric devices economics got into trouble when uncontrolled liberalization allowing human behavior to contrive economic balances that led to derivatives, hedging, CDOs (collateralied debt obligations)…most of them are some kind of chakra vyuga economics, that is you might device an entries but you may successfully fail to get desirable results always, that is like no idea of how tp get out of chakra vyugas in economic management… that is like Abhimanyu sent into chakravyuga but he could not have the right art to get out after all it is more an art than a science or some technology.

    that is some Gorilla war fare mechanics where the highly trained military might lose its men like in Vietnam where the USA lost quite a lot of men and materials. So similar problem, as an gorilla might surface from any unexpected area.

    that way we all landed in 2007-08 economic crises surfaced from the USA. It might take years or decades to recover back as many eminent economists still say. Only foolhardy might say otherwise.

    Now it appears in Indian economic managers did not get any meaningful light to light a candle in the darkness of economic darkness surrounding like several economic tornado around surfacing from all ends why even unexpected ends like earthquakes, we can call earthquakes of economics,

    It appears, economic ministries all over face same or similar problems.

    ineffective corrupt men as officers like the officers now CBI arrested many more need to be arrested as quite a lot are escaping from CBI nets as bribe givers fearing their own situations might get affected do not reveal things like a robber who is stung by a scorpion would not shout he remains like that robber that way a lot of public servants are not caught, in spite of CVCs and like men are there trying to detect but there too a lot of men are getting greased by the culprits, like many of the police men are taking bribes and let of thieves and robbers.

    Therefore, the fences started eating crops have started, like the saying goes, ‘katrulla podhe thutrikol (tamil) , meaning when there is are favourable winds, try to get benefited – that way many rotten ‘officers’ and others (untruthful-dishonest-men) join together make hay when sun shines.

    Fact is there is an economic black-hole, no idea where is beginning or where is the end like situations prevail in the economy of the country, so you are bound to face all these kinds of great ‘worthies’ surface, for they know one thing if they cannot lead meaningfully they would follow the same path of self gratification from all sources available, and once getting a lot of ill gotten wealth they would indulge in all kinds of nefarious activities…like getting expensive foreign jaunts, expensive kinds of habits of living in exclusive mansions at the cost of others, after all these ‘others’ get quid pro quo benefits..that way corruption grows like ocean gales and storms, you could have heard a municipal sweeper was worth over 200 crores in mumbai as one newspaper reported, when so officers feel why they should not, as probability of being caught is remote as they are duly supported by similar kind of audit men CAs, lawyers and so on.

    it is obviously a deep rooted cancer in most of the governmental operations duly supported by political forces who also similarly thrive in these kind of liberalized economies where law is only allow these extortionists use those laws that could earn them earn all kinds by all kinds of illegal ways.

    it is like a telugu saying…’intilopalo dongani devudu iyna kanipottaledu’ ie the robber in the very household could never be caught even by God, that way public servants of suspicious integrity inside governments services could never be caught.

    that is the situation in the tax departments, india is facing, the real suffers are poor all tax payers is the substance here pls.

  3. Justice James Wilson when he played a leading role in the drafting of American constitution , made a point clear and better than any one. Before the Eleventh Amendment was adopted, he made the comment on Sovereignty on the side of Atlantic –

    ‘To the Constitution of the United States, the
    term SOVEREIGN, is totally (alien thought)
    unknown. There is but one place where it could
    have been used with propriety.

    But, even in that place it would not ,perhaps,
    have comported with the delicacy of those , who
    ordained and established that constitution.

    They might have announced themselves
    ‘SOVEREIGN’ people of the United States:

    But serenely conscious of the fact, they
    avoided the Ostentatious Declaration.’

    Article [XI] reads:

    the powers not delegated to the United States
    shall not be construed to extend to any suit
    in law and equity, commenced or prosecuted
    against one of the United States by citizens
    of another state, or by citizens or
    subjects of any foreign state.’

    In Seminole Tribe of Florida v Florida(1996) unquestionably most important Opinion in these (Court’s Sovereign immunity doctrine) a sea change that Justice Mr. Bill Renquist transformed his Edelman opinion (though XI Amendment did not bar prospective relief), and despite having no textual basis for its action);

    He relied on judicial interpretations rather than anything in the text of the XIth, Amendment as authority for a series of opinions that invalidated 41 federal statutes/acts of the Congress.

    Relying on ‘sovereign immunity’ and prior misinterpretations of XIth Amendment, the court invalidated the provision in the Indian(read American local Indians) Gaming Act that authorized the Seminole tribe to sue the state of Florida to enforce its statutory rights.

    Here I bring that simply to state Income tax officers do not have any Sovereign immunity to take bribes, that too by enforcement of bribes to be paid by the tax payers.

    If even then the income tax officers did force tax payers to pay them for their favors as a ‘quid pro quo’ , in fact a treason committed by the officers, like a sedition on the state, what kind of punishments need be handed to those officers and their accomplices is a matter to be duly considered by the justice delivery system is timely is my view, as I keep the options open to the judiciary, as options for government is already closed, in view of the fact, the officers illegitimately trashed the tax law prevalent in India.

    the govt of india shd not even provide these worthies the legal aid, besides Indian government lost its right to provide its legal aid to these kinds of officers, when one reads the fundamental rights Articles in Part III of the constitution, even with so much mangled by too many constitutional amendments as on date.

    In fact , Sovereign power still rests with the citizens as dejure entity in india, if at all sovereign immunity if the defacto government still insist to protect these ‘worthies’ after all no officer would have been so comfortable in extortion but for the political power that rules them , and in fact political power might be ruling but lost its ground that thy are elected representatives of the people through a ballot box, as no ballot is given to do such extortionary tactic by the ‘officers’ concerned, here.

    Might be James II of England could have helped them but after 1688, no more such divine right exists, as govt of india Act 1935 was not containing such help to these ‘worthies’, is my contention.

    if any disagree, please post how you would support these worthies, after all it is a debate on public servants and politicians in power. tks n regds

    • Bobjee kurien says:

      Thank you MrBalkrishnan for the elucidation.Before a Christian grave yard a hoarding says criminals do not know what justice is.The officers who do not know how to dispense justice should not be beneficiary of a liberal interpretation of law.The department has in its rolls officers who were found with huge amount of unaccounted cash still on its rolls!!!.

      • sir,
        thank you.
        Justice. White of USSC said:

        “Legislation both statutory and constitutional is enacted, it is true, from an experience of evils but its general language should not therefore, be necessarily confined to the form that evil had therefore taken.

        Time works changes brings into existence new conditions and purposes. Therefore, a ‘principle, to be vital , must be capable, of wider applications than a mischief which gave birth.

        This is particularly true of constitutions.’

        quoted from’ Weems’ used the language that ‘Harmelin’ quoted in part, as then justice McKenna observed, in explaining or referred to cases the ex post facto clause to illustrate a point.

        I think ‘cases’ involving two other constitutional provisions even more effectively explain why a narrow focus on the precise evil that gave birth to a constitutional command, even when coupled with contemporary commentary, provides an unreliable guide to understanding the principles enshrined in a Constitution.

        At the time of adoption of clauses (religious) in the US constitution in the First Amendment , it is generally believed that they merely prescribed the preference of one christian faith over another but would not require ‘equal respect ‘ for the ‘conscience’ of the ‘infidel’, the atheist, or the adherent of non -christian faith, such as Islam, or Judaism or any other ‘isms’ .

        The commentaries written by justice Story expressly described this ‘narrow understanding.

        In Wallace v Jefree (1985), he (Story) stated, ‘when the underlying principle (was) examined in a crucible litigation, the court …unambiguously concluded that the ‘individual freedom’

        {(here tax payers and other citizens(supposed to enjoy individual freedom without clamps of extortions by a new tribe of robbers in the garb of public servants, substantially protected by political tribes in power under a representative system decided by a ballot, essentially not permitting any kind of robbery or extortions) also pay indirect taxes -(another obvious robbery authorized by legislators- called law makers…) in india, are taken for granted by the so called government through its so called ‘public servants’),}

        of conscience

        {(is sabotaged substantially in India, is the point of any taxation direct or indirect obviously for personal gratification by way of salaries, honororia, perks of public servants and politicians)}

        protected by the First Amendment

        {(in india by fundamental rights ) embraces the right to select any religious faith (any tax payer in indian circumstances)}

        or none at all.

        If Indian government fails its constitutional responsibilities to its people.. , who would take care of them is the potential question before every indian, if judiciary looks at it wit a Nelson’s eye, that probably would not happen i presume, for it might rightly do judicial review and bring all ‘official high way robbers’ that includes all kinds of professionals as also politicians in the helm in the name of governing the country called India.

        You need to bring all of them to right justice as people of india deserve such protection from these worthies, is it not my view?

        i do not know how you people receive my view, as India also borrowed some of the principles from American constitution.

  4. B.S.Waghela says:

    Politics is the last resort of the scoundrels , so said one Britisher (probably Dr. Johnson). In India majority of the leaders have criminal background ; and they have reached their to enjoy perks, profits and privileges. Supreme Court should compel the Parliaments to amend laws disqualifying any one from contenting any election where any charge sheet is filed in any Court of Law.

  5. Dipakkumar J Shah says:

    How the powers and authority is being misused can be seen from the Case Special Civil Application No 7736 of 2006 High Court of Gujarat. A fine example what is going on in Justice. Go through all orders. Minutely. What is justice!!!!! and Natural Justice.

  6. Krishnamurthy says:

    Corruption is rampant in every Government Department and Income tax department is no exception. Superior Officers should be honest so as to expect the subordinate officers also to be honest. Government is paying the officers a lucrative salary and pension. In 5th CPC pensioners of the Rank of Additional Commissioners and higher rank are getting pension more than their salary while they were in service. So,there is no excuse for the officials who resort to immoral activities like bribes by threatening the assessees who file their returns as law abiding citizens. There are millions of people who have crores of rupees who do not file their returns. Only 3 percent of the population are assessees! There are many Owners of posh apartments who acquired flats paying several crores of rupees, but they may be either non-assessees or may be paying very nominal tax. Real estate dons are Scot free and unaware about Income tax department. Lot of black money is in circulation in real estate business, investors in jewellery, shares and securities, doctors and lawyers who charge hefty fee from customers etc., and they are not paying even 1% of their income as tax!
    M.K. Gandhi had said that ‘there is enough in this world for one’s need but not one’s greed’. Honesty and integrity have become rare commodity. Millions of our brotheren and sisters are starving without food and shelter. We can make this earth a HEAVEN only when we lead a contended life with self-esteem, honesty and compassion to fello citizens.

    • i completely agree with krishnamoorthy.

      Fact is as i am told even politicians in power are alleged to be involved as in states in relation land registration deals through the sub registrars of registration departments, besides through Regional transport authorities, ministries of home affairs are through police officers, and so on and so forth

      It appears it is like some divine right theory the kings had been enjoying, so in the name of sovereign domain all these worthies use illegal gratification unabated by their powers supported by so so called sections in their relevant Acts, in spite of very high salaries are paid from public exchequer.

      I feel very sad so called auditors, CAs, and like professionals besides some lawyers on panels or otherwise, besides more so by so called corporate lawyers are alleged to have been involved.

      In USA article I provides power to congress, article II president as executive and art III to supreme courts and courts created by congress with the clear separation of powers.. and yet the powers are though not fully separate, and yet it all depends on the top people the honesty , integrity, and the like surfaces.

      truth is indian politicians essentially being corrupt , they promote in the public servants … that way when i hear why people want to become public servants through UPSC, State service commissions some told me other earnings really compensate much more than that is paid in private sector… that way a few of them really integrated but most want illegal earnings…if the political body is not corruption free we may not be able to mend the public servants is indeed a serious fact is my view.

      will the political parties cleanse their party men is million $ question before the citizens… citizens removed corrupt kings but today every minister behaves like corrupt kings of the past when so how indian fundamental rights is anybodies’ guess!

  7. bobjee Kurien says:

    A similar thing happened in Kareem Nagar .On pressure from the higher ups the Income tax Officer arranged payment of a bribe.As quoted above “”one senior officer who used to openly say that ” like fish in water will take in some water, person in income tax department will make some money where a survey was conducted”” . Poor ITO was caught .

  8. B.S.Purshotham says:

    Our system breeds corrupt officials. Unfortunately , there are no checks and balances and accountability in our system. The officers and higher ups threaten the assessees with searches, surveys and even fictitious demands, which doesnt stand in any court of law. The officers go scot free, with out any action, even when their frivolous additions are deleted. The poor assessees has no other choice but to yield to their pressures.

  9. Srivastava says:

    If all the Commissioner, Additional Commissioners, Asst. Directors & Asst. Commissioners are inquired they all will be found to be staying at flats/ bunglows of rich assessee/ tax consultants only. Almost all are abusing their powers to earn bribe. In each and every Survey and search the bribe amount goes in 25 Lac+. Almost all ITO are earning 1 to 5 crore per year as bribe, depends upon the number of cases with him. The sum is much higher for ACIT, ADIT, Addl. and CIT.

    • B.S.Waghela says:

      I object to the words All / Almost all. All are not corrupt ; majority are Honest. Problem is that these Honest are side-lined and the corrupt have purchased lucrative postings. Before some years one MOS(Finance) had put on AUCTION certain chairs of DI(Inv). When there were loud noises from Unions, he was stripped of the Portfolio. Unfortunately CBI did not touch him. If there are blessings of higher ups to the Corrupt, no one can prevent corruption.

  10. Varaprasad Daitha says:

    As the CVC is pursuing the methods of corrupt officers, it is also needed for CVC to instill confidence in the officers of Central Government by initiating penal actions against those who make unfounded allegations / complaints by taking reviewing from the dropped penal actions i.e. which were dropped as not proved. This will boost up a confidence among the innocent officers. I hope the CVC will review the pending disciplinary proceedings as well as recently concluded cases as a means of fair approach.

    • B.S.Waghela says:

      I know the present CVC from the days he was CIT at Nagpur. He is known for his honesty, integrity and sense of duty. Hope he may be able to improve the situation.

  11. manish parekh says:

    Sir try & compare the scenario of extorting money with pre-independent era – nothing but misuse of powers which is programmed in the minds of IRS & IAS brass with the help of the same ACTS & RULES DESIGNED BY THE BRITISH. These were devised in those times to help British Officers to SUPPRESS people. IRS & IAS ACTS dates back to more than 100 years. They are still being enjoyed in the same format even after 100 years. Its time present government to have a re-look at those ACTS and modify them as “rules to administer” from the existing “rules to RULE” – till then it would just be same “leaving” with a comment ! Life time Pensions for such IAS IRS and other government officers who are enjoying the unwarranted powers BRITISH era ACTS & RULES designed to loot the country. And no benefit for the TAX PAYER who pays tax during life time. Why they need to be provided pension for life + the enhanced pay recommended by Fifth Pay Commission.

  12. bobjee Kurien says:

    Like every criminal, officers feel that their modus operandi is not going to leave a trail.Every batch of officers have fine tuned their methods . It is not too difficult to go after the said officers .Their game is up.They are merciless in executing their plan and not bothered about the consequences others face.two officers who posted their views are absolutely right in what they expressed. Waghela and Rajesh you are right on spot.CBI and CVC please continue your good work .Keep the heat on them .If you let them off you loose a big battle against corruption. There is no salvation. They lead an opulent life and it was there for all to see.

  13. Dipakkumar J Shah says:

    When C B I is taking care of Income Tax department, why they are silent for Judiciary? When filing a complaint against any Judges , Justices with a proof?

    • Varaprasad Daitha says:

      For this there should be dare people in CBI like Sri. K. Lakshminarayana, JD CBI who served in CBI till 2013 at Hyderabad. He had done tremendous job of booking a CBI Court Judge itself.

  14. Gururaj says:

    Let’s not get involved in personalities and sincerely hope that this acts as a clarion call to the FM to simplify the legislation reduce penal provisions and actually belive that asssessees are generally compliant and every mistake does not need to be brutally penalised…till the draconion provisions of law remain this will continue…

  15. Sher Singh says:

    What is invention in this by CBI. Every Income Tax Authority does this. Goel was famous in BKC Mumbai. Good that he got caught. If CBI wishes entire Aaykar Bhavan is potential brothel

  16. Autonomous says:

    These days it has become routine for both the tax payers and tax officials to settle things (in any manner). I wish atleast this little effort from CBI might enlighten the tax payers atleast, from resorting to ugly practices…

    • B.S.Waghela says:

      Where both Goel and Mamidi were posted , please enlighten us.

      • bobjee Kurien says:

        CBI today arrested Principal Commissioner of Income Tax, Thiruvananthapuram, Shailendra Mamidi and another IT official for demanding and accepting Rs 10 lakh as bribe from a jeweller for doing a favour.

        Income Tax officer, Sharat, was the other accused arrested.

        The two had demanded bribe from the jeweller for doing a favour. They have been produced before the CBI court here, CBI sources here said.

        Shailendra Mamidi, a native of Andhra Pradesh, had been transferred to the state capital only six months ago from Chennai.

        The arrests were made based on specific information, the sources said.

  17. Varaprasad Daitha says:

    We should congratulate the CBI and CVC for such an excellent exercise.

  18. Ashwani Joshi says:

    Good job. CBI should always be on the prowl for such cunning foxes who have spoiled the broth.

    • B.S.Waghela says:

      Nothing new to me. Such things are going on in the IT department for years together. I have worked under such corrupt officials ; some of them have Retired as Board Members. Majority of the IT officials are honest , but these corrupt superiors harassed them including myself. CBI should approach retired IT officers who can give them names of corrupt officers.

      • Rajesh Bhardwaj says:

        Dear Shri Waghela ji, I totally agree with you. In fact, one senior officer who used to openly say that ” like fish in water will take in some water, person in income tax department will make some money” to justify corruption went on to become Chairman, CBDT .

2 Pings/Trackbacks for "Chief CIT Used Strong-Arm Techniques To Extort Bribe From Hapless Taxpayers: CBI Report"
  1. […] Sailendra Mamidi and Anil Goel, both high-ranking Chief Commissioners of Income-tax, Santosh Jangre, the Joint Commissioner of […]

  2. […] October 2015, it was reported as to how Sailendra Mamidi and Anil Goel, both high-ranking Chief Commissioners of Income-tax, allegedly used their vast powers to arm-twist […]

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