Arun Jaitley, Finance Minister
At the 31st Annual Conference of Principal Chief Commissioners etc, Hon’ble Shri Arun Jaitley, Union Finance Minister, sent the clear-cut message to the senior officers of the Income-tax Department that they have to be prompt in redressing the grievances of the tax payers and not harass honest tax payers. He emphasized that this is the “policy” of the Government. He added that while black money hoarders have to be “squeezed”, even that has to be done in a “free and transparent” manner.
Ms Anita Kapur, Chairperson, CBDT, endorsed this stance. She emphasized that the focus of the Department is the taxpayer who is the key stake holder. She reiterated the Department’s commitment to provide a fair, transparent, consistent, responsive and supportive tax regime. Speaking of the Department’s resolve to address taxpayer grievances, she said “Even a single tear matters”.
No More Frivolous & High-Pitched demands:
According to a report in the FE, in a bold attempt to reduce frivolous tax demands, the Income Tax Department has decided to overhaul the annual performance appraisal system for tax officials, relying on the quality and effectiveness of their work and not plainly on the quantum of tax demands raised.
Error-free and well-reasoned tax demands, which are made following all principles of natural justice and are not struck down by courts subsequently, would earn an officer a good grade, not frivolous, high-pitched tax claims that do not stand the test of appeal. Since one of the parameters of the new appraisal system would be the actual amount of tax eventually collected, field officers are likely to make realistic assessments.
The move is likely to cheer businesses, many of which had been confronted with huge tax demands in the recent past, especially in the case of cross-border transactions. It is also in sync with the Modi government’s promise of non-adversarial tax regime. While ensuring that tax officers are held accountable for their actions, the government would also make an earnest attempt to enhance the tax base from 4.7 crore assessees, FE said.
Acchhe din is mostly on papers. Most cases where there is no actual basis of contention or wrongly selection or error in proper selections, who inspects the correctness these judgments, or just sent out as it is resulting many a cases being falsely created wasting high cost and time of all. The need of the day is the acts be cleaned right from bottom with many a lawn unknown to themselves and frivolous cases, what for and who for? Who is looking into this? no one, just talks….
Intentions of the FM is laudable. But in the field the state of affairs is not that rosy. Most of the senior officers of these days are incapable of properly guiding their junior officers. Yes…training is given by sending the Officers to certain institutions / countries for a few days every year. But due to the promotion policy in the department, present day senior officers lack practical experience in the field. Only when the senior officers knew their work they can guide the juniors. Accountability and responsibility at the senior level Officers is almost nil in the income-tax department. This should change if the junior level officers are to discharge their duties more efficiently. This will reduce public grievances.
Intention is fine but actions will fail. Till now no fàll in the corruption levels.So. how he can achieve?
Assessment is the Scrutiny of the Return filed by the assessee whether it is according to Law or not. In every assessment AO has prejudice of his mind to make addition in his order in favour of the department for this he make baseless additions without any evidence. In arguments AO replied that this addition will be made at AO level and will be deleted at the level of CIT(A). When he agreed that the addition will be deleted at CIT(A) level why he made such additions un-necessarily creat a bogus demand and harass to the assessee for recover the demand. AO/CIT/CIT(A) every time denied to give stay and creat truble for the assessee. AO can not be a judge his decision can not be a final. Assessee has a constitutional right for Appeal against the impugned order. The Demand should be kept in obeyance till the decision of the First Appeal for the natural justice. What you think?
Matter does not end here
we have come across cases where CIT has opened the decided cases ,U/s 263 to make fresh assessments to examine provision of sec 80I C on issues like Scrap Sale and Payment of Job Charges by Customers where RM/PM are supplied by them and manufacturing is carried out at assesses factory
what a wasteful exercise
The comments under the subject raise a variety of issues that can serve as a feedback for the Government and the website should take steps to send this information to the ministry.
Recently an assessment was concluded by an officer, which is a high pitched assessment against the assessee inspite of strong ground on the instruction of the senior officer. When enquired the assessing officer informed the assessee, he is forced to pass such order by the senior officer. The reason senior officer gave to assessing officer is “even if you err, err in favour of the department”. This is the quality of assessments our officers are doing. Can we change this ???????
If the causes for appeals are analysed, you may be surprised to see that the majority of the cases pertain to few issues like ‘Transfer’ definition, Rule 8D dis-allowance, Section 50C issues, Deemed incomes under section 9 etc, which while trying to cover a minuscule percentage of defaulters have caused untold misery to the majority law abiding tax payers. If the department wants voluntary compliance, it should also first undo these miserable artificial provisions and set its image right and tax real income.
Good initiative by FM Minister, but how & who will decide differentiate between honest non honest tax payers.
Where there is no mechanism to track tax payer except those slabs.
it is more important than going behind to tax payer and asking them for detail,it would be more helpful if govt could do some intelligent to take maximum people in tax net, for that there must be a mechanism.
I can suggest that,
sir,
these are only paper statements, practically the mind set of the Income Tax Officers has not changed till date and they are targeting only the assessees who are in the income tax books and the people who are not at all filing the returns are still enjoying all the benefits of the nation at the cost of the honest tax payers.The finance minister should try to change the mind set of the department officers and they should be trained to handle the typical problems of the assessees and they should be in a position to identify the honest tax payer and dishonest tax payer, intentional and non intentional mistakes then only the honest tax payer will enjoy good days and acha din.
Oh very nice, but how to check and control activities of `paper additions’ and `disallowance’ of various expenses….?
Assessing officers n supervisory authorities who made frivolous demands should be sacked or they should be demoted by transferring them to non assessments.
The step is in right direction, but to be a effective deterrent Govt must address the issue of disposal of appeal in timely manner then it will work. Moreover if high pitch demand is result of harassment then even more stringent action must be taken.
it is a peculiarity in our country, that when a labour is require to pay the tax having income more than basic limit, an agriculturist is exempt. but why this difference? yest, an agriculturist may face huge loss for natural calamity or like in a year, but that loss can be set off with the income of the next year and only thereafter, he must pay the tax when his post adjustment income exceeds the basic limit. that is one of the route to accumulate wealth without paying any tax.
Further, to maintain the above speech of Finance Minister or CBDT’s chairman, the assessing officer should be held personally responsible to compensate the harassed assessee, otherwise nothing will be happen
I feel the tax collection targets also should be realistically fixed, which is the root cause of the problem. In order to achieve their targets, the assessing officers are bound to make high pitched assessments putting assesses unto hardship and wash off their hands. When the GDP is growing at 5%, income tax collection is expected to increase by 25%. The addition if any should be to identify new assesses by using AIR information.
The contents of the speech with specific directions clearly sends a message that “Even a single tear matters”. The monitoring of assessments if personally done under the supervision of CIT, with his experience, can come out with creation of correct and legal demands. The time-limit for disposal of appeals also to be brought in the statute and accountability of creating ‘demand’ can be gauged. Grievances relating to issue of refunds/rectifications also to be periodically monitored on regular basis with proper checks and controls.
Recently assessments were made by the A.O.s following certain internal instructions from their seniors which were internal minutes. Though the said instructions are not binding on the assessing officers, but they were followed blind foldedly without appreciating the merits of individual cases. High pitched assessments and demands have been raised due to which the appellate authorities are flooded with appeals. The disposal of the high pitched assessments will take years since the CIT(A)s are flooded with appeals having like nature of additions. The dream of “acche din” and “soft tax regime” is defeated due to the biased approach of the officers making irrational assessments.
It is humbly submitted that nothing in the Income TAx Act, should be left with the word “to the satisfaction of the Assessing officer” which leads to corruption or if he is not capable of making realisitic assessment he put in harrassment to the assessee and courts are filled with unnecessary arbitrary assessments. Most of the sections of the act, with the consultation of lawyers and CA, should provide the documentations beforehand to be submitted in support of the transaction to prove its authenticity, so that there should not be any confusion in the minds of AO and assessee.
This is a welcome step of Hon’ble FM but simply showing of intent is not enough.Some rules will have to be framed to penalize the officer creating baseless additions resulting into bogus huge demands.There should be a punishment mechanism for the erring AO if the addition/disallowance made by him is deleted with the observation that the addition was made without any sound reasom
Another instance of blabbering without any concrete actions at ground level. What action has CBDT taken against AOs who sit over rectification requests much beyond the statutory period of 6 months ?
In spite of the promise given now, I don’t understand why even in city like Bombay still bribes have to be given to obtain the due amount of refunds? Why there is no proper monitoring system like the one Department has for arrear demands? Why our associations are not raising a voice in this respect with the FM as well as Chairman, CBDT? Only last month I observed one very senior CA asked a very honest tax payer to pay bribe for obtaining his refunds. How long this will continue?
Finalisation of actual tax will take about 15-20 years. Appraisal at such a later stage won’t cut any ice.
The message must be loud and clear to field officers. Many field officers take law in to their hands follow fanciful interpretations and harass the honest tax payers during scrutiny assessments. The Board shall do well to review these and evolve a scheme of reprimand
Whatever it is said and done, the attitude of the Department can not be changed. Though the new appraisal system require for actual amount of tax eventually collected, the deptt may harass or pressurise the taxpayer to pay the tax even in the case of frivolous tax demands. There should be effort to stop the corruption even at the lowest level. Hope the present Govt. will also look into this
The AO has a tendency to make high pitched assessment of Income more than twice of the income declared in return by the assessee. Indespit of clear instruction given by the CBDT in instruction no. 76 and many decision of High court the AO and CIT(A)not given stay on demand raised in high pitched assessment. The Assessee suffer financialy and mentaly harassment that should be stoped and the AO should make realisty assessment.
Since one of the parameters of the new appraisal system would be the actual amount of tax eventually collected, field officers are likely to make realistic assessments.
Even a “single tear matter” is a saying words. The officers who hold the powers make high pitch assessment without properly application of provisions of laws. There is no recovery of revenue only create the litigation because of tendency like fear of audit objection and promotion etc.
It will bring direct check on the discretionary powers of the assessing officers. F.M Should make a provision in the Income Tax Act to curb unfettered use of discretionary powers leading to frivolous demands and high-pitched assessments. Otherwise assessing officers will make the taxpayers cry buckets and defeat the PM’s “Make In India dream”.
If high pitch assessment are made. raising huge demand, on application from assesses the arbitrary demand should be stayed by the AO at least till the order of first appellate authority. without making tax-payer to run pillar to post.As laid down by Courts of India;-
SOUL vs. DEPUTY COMMISSIONER OF INCOME TAX
VALVOLINE CUMMINS LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX & ORS.HIGH COURT OF DELHI
There is no loss to the revenue as department charged huge rate interest on outstanding demands.
This kind Action of Higher Authorities will make realistic to the statement Even a “single tear matter”
Unless and until accountability concept is religiously followed and strictly monitored with stringent actions on erring officers, trend of high pitched assessment will continue. Discretionary powers are used rampantly and addition on same matter differs qua assessee. Recently in Ahmedabad, in same circle disallowance u/s 40(a)(i) for non deduction of tax at source u/s 195 on payment of commission to non resident for services rendered abroad has been made in few cases and have not been made in few cases. Reasons are best known to officials of that circle. As to get justice against illegitimate additions has become costly and time consuming affairs the people are choosing corruption as means and Assessing officers are taking advantage of such situation. Even reference of section 144A does not make any difference because of protection of higher authorities to lower authorities for reasons best known to them. Assessing officers are as such quasi judicial authorities but the word justice is not in their dictionary. Above are general remarks where few exceptions are there but percentage of exception is very low.
I fully agree with CA CK Thakkar. High piched assessments even in small business cases and salaried cases are being made, without proper reason, resulting in huge demand. Petition for stay of demand till disposal of appeal before CIT(A) is being refused mercilessly in a routine manner without going into the hardship expressed by the tax payer and coercive measures are initiated to recover the demand. The AOs responsible for making such frivolous high pitched assessments should be punished by reverting them to the lower cadre or else they should not be posted to assessment sections in their service. CIT(A) having burdened with huge appeals, takes years to post the case. Instances are there, even after lapse of 3-4 years, the cases are not at all posted, resulting in harassment by the AO to pay the demand or else coercive steps are being taken to recover the arrears of demand. Result:- not one tear, but tears rain from the eyes of the honest tax payer. We hope, the FM takes serious note of such harassment and take stringent action against erring AOs.
the main objective of high pitched assessment to please superior with moretax demand then coerceive recovery letatleast stay be decided byFAA cit(A)rather than interested,biased AO/ADD/CIT-ASINEXCISE/SER TAX/SALES TAX
paymentfor stay be nominal 10/15 as in serv tax etc rather than whims of AO