The Parliamentary Public Accounts Committee has released a report on “Tax Administration” in which several far-reaching observations have been made regarding the functioning of the Income-tax department. One of the issues that irked the Committee was the tendency amongst the Assessing Officers of passing “adventurous” assessment orders. It noted that the arbitrary additions made in such “adventurous” orders were causing undue harassment to the taxpayers and had led to high levels of dis-satisfaction. It recorded the solemn statement of the Revenue Secretary that a system would be implemented which would provide disincentives against such orders. The department assured the Committee that it would henceforth inculcate in the Assessing Officers an attitude of passing “fair and judicious” assessment orders.
The Report makes for interesting reading because there are several other important suggestions made by the Committee to reform the tax administration of the Country.
Parliament Committee Report On Tax Administration (1.1 MiB, 4,670 hits)
can a leopard change its skin?
problem is there is lackadaisical training is prevalent in revenue department, and trainers many too were past assessment officers, except a few who are somewhat conscious persons like one jt commission Bobkurien referred in some comments.
In fact the tax laws have to be revisited to simplify them sans all kinds of penalties, for penalty sections only help these worthies misuse their office, i was told by a tax payer that his own CA appearing before a CIT(A) told him better pay rs. 5 lacs then your case might get okayed and your liability would get annulled…what it reflects…so it shows some CAs also hand in glove with these ‘worthies’…that is again and again taking place; one more some company tax assessment is handled by similar 5 lacs gratis arrangements,, that shows very clearly these worthies misuse so called penalty clauses to better get enrich themselves, as most tax payers avoid wasting their executive time in litigation process besides exorbitant legal expenses.
therefore if you remove penalty provisions main teeth that helped these worthies illegal gratifications, naturally these ‘worthies’ might get disciplined is my view.
there is no self restraint in them but their greed is ever increasing day by day, like in government departments accounts sections are said to be taking 2% of the bill amounts from contractors as a norm any contractor might tell you.
Every one even in non earning sections by just cutting checks or otherwise earn illegal gratifications from every kind of imaginable sources , that way innovations and creativity abounds.
Problem is when a tax payer do not proceed against such besides professionals give them umbrage to these worthies.
simple admonishments provide no relief that you would soon discover after all these funny admonishments, as if these worthy parliament committee members were not aware of this tax man menace every where.
Restraint is vital . how vital it is i write below pls.
That is how I remember in 1960s we were telling our officers to have a restraint like judicial restraint on oneself, if not you would land into tears yourself.
That way as a district welfare officer then as dy collector in state services i even told my officers or other staff, one need to be very very careful when you have discretionary powers, after all ‘discretionary powers’ mean you shall have to be highly discreet in taking any decisions ; believing the public servants certain levels of officers or officials only were bestowed the discretionary powers besides red tape meaning one has to take higher levels approvals , say about two levels most minimum,that way red tape came into existence during British Raj that was followed by us after independence.
I had seen once S .K. Chettur ICS officer as secretary to Board of Revenue in Madras state was patiently instructing his officers as to how the public officers need to behave with public, after all without public trust public servant is Nothing he told them.
He also told when they were in ICS training too they were told , without public approval which is easy provided you are very considerate with them – public -as the public only need to support any public officer not administering authority, he told his officers, very religiously every week end.
He also told them, he as also his fellow trainees were told Administering authority would always harsh on you as an officer, if your performance since if it does not meaningfully follow ‘judicial restraint’.
He said that way he used to advice indian ministers during British Raj, administration itself shall have ‘judicial restraint’ on itself; and so he told one revenue minister, Sir, when rains fail how the farmer after losing his crops would pay the tax of the government, if forced either he resists politely then revolts, if revolting or resisting , one could see Natural justice’ is on his side; and such kind of administering is called ‘Administration’ by Public authority, if not it is not called public authority, but ‘administration atrocity’;
then he said why in 1857 there was an infantry revolt, as the commanding officers failed in their ‘judicial discretion’; if there was ‘judicial discretion’ naturally there would not have been Mahatma Gandhi to fight for independence, after all, the public would have been very happy with British governance.
Therefore, he said, independence and freedom is born out of ‘judicial discretion’ called, ‘judicial restraint ‘ on one’s own self, one need to impose by himself.
Sama, beda, dandam – peaceful approach, if failed, some meaningful force and absolute force that is a double edged weapon system he said.
He said, why policeman’s prosecution if wrong very department would not support him, whatever level officer he is, that way police man was strictly controlled by administrator himself. He said if the police loses a prosecution the relevant officer was either demoted or discharged without benefits of service, called ‘dismissal’.
Through the British authorities had serious controlling system called, ‘checks and balances’, they were able to administer 3/4th of the world, but due to officers who suffered from ‘headstrong’ behavior of ‘power’ caused the fall of the fall of British authority, that only made the colonies to fight for independence by freedom movements all over the world, he told his officers.
Again he warned his officers, never be over bearing with public just because some authority would support you; if you do, and if there is too much authoritarianism, naturally your hard won freedom would just dissipate after all your own public would disown you..so he told in the talks..’you need to maintain , ‘judicial self restraint’ he ended .
He told the officers and officials, power itself is like high power electric shock, if you touch high power cable though that cable you might own but it would care you but would kill you..thus in those days he warned what is called ‘power’ and how to contain is ‘self restraint’, better a ‘judicial restraint’ you impose on yourself. that is all, from the administrative history.
Same Chief Justice Roger Taney of U S Supreme court said ‘judicial restraint’ is a must on the courts too…there are things that need to be settled by political wisdom, then do not use judicial power, if done you would end up with Dred Scott v Sandford,1857.
He could learn judicial restraint after his very bad decision in that case.He lost his stature to be as good as C J John Marshall, every one of you if you are student of constitutional history of the world. that is all.
Sir,When I exercised restraint and followed judicial discipline in finalizing assessments as an assessing officer, some “ANDHRA” officers in the Department created false complaints and levelled charges against me involving “loss of revenue on account of non-levy of Penalties” and tried to annihilate my career in the Department. Fortunately, officers of “Oriya, Tamil,North Indian, Telangana” regions have come to my rescue.Even today, “Andhra” officers are not sparing me and atthe slightest opportunity, they are raising their awkward head and harassing me. Will the Courts also take same view in the matter of Administrative Decisions like transfers–my answer is a ‘NO’, because there they distinguish the agony of ‘taxpayer and employee’ and tend to be soft with tax payers,but not employees, though both are humans and sons of Indian Soil.
Mr. Rangarao, Your isolation of officers from certain regions as helping and others as vindictive appears to be not correct. Because the so called officers who said to have helped from the regions they have filed all sorts of wrong complaints and even filed incorrect affidavits and even harassed many of the group c officers. The relation ship between bosses and subordinates is an interpersonal one and cannot be generalized as you have pointed out. You might have experienced bad things from those people. This is not the forum to make such generalized comments. I making this observation only for your good.
You have also asked for a concrete definition for “Adventurous Assessment Orders” “Frivolous Additions” “High pitched assessments” without any scope for debate or second opinion. This is what everyone on this platform is crying for. It is the CBDT should issue clear cut instructions and not the people in this forum.
To my little experience any order covers issues and gives the details of investigation / inquiry application of mind to the issues and giving cogent reasons for conclusions should be termed as a reasonable assessment order. The CVC also issued several instructions and circulars in this line and if the CBDT follows the same there could be no room for ventilation of grievances.
Mr Ranga Rao this is not the forum for you to air your grievances.There are several channels for you with in the frame work of the department.
I just recall one instance in my life. During the Andhra agitation I thought it fit time to seek a transfer from Nellore to Hyderabad citing the unstable situation in 1972.One of the reasons I mentioned was the unstable situation which may result in harm to my person . I was very young . I am thank full to the Late Shri VVS Sastry who was my Inspecting Assistant Commissioner of Income Tax who had just returned from the UN posting. I sent the letter through the tappal at 4.30 and at 5pm I was called to his office.He asked me a pointed question did any one threaten me . I said no . Then he made me sit and he told me Kurien you are a Government official and you put in writing that you apprehend danger to your life I understand what you had in mind . I am recommending your transfer . But remember that you are a responsible officer of the department.Before you put any thing in writing you should have conveyed things orally to me . I understood what he meant .If after giving the letter to him, if any thing happened to me he (the IAC) told me that he would be directly responsible .I realised my folly.
Like wise ITAT online is a public forum and cannot be used to vent the official grievance. I would advice restraint For the people in this forum do not know what the issues in your case was or is .
Mr. Rao, Natural justice is common for all Sir.
The word ‘judicial discipline’ means substantial due process and procedure with prudential perceptions, that is applicable every one per Art 51A of Part IV-A of the constitution of India. None can escape right from top judges, prime minister, parliamentarians, public servants of any level, any Educational system, or training systems, even in house training systems…etc of any professional bodies…& so on.
None can be harassed by anyone. Any harassment is equal eve teasing kind of proposition, so suitable punishments any law court need to deliver.
Judicial restraint does not mean being a silent observer in fact. It enjoys a very wide meaning and covers very many areas. That is judicial Restraint jurisprudence. It expands to every administering activity.
We have a problem we limit the understanding of every potential word like Judicial restraint…judicial clearly means…one shall apply his own judicial – conscious based – after all ‘conscious’ means every one knows what is right and what is wrong, what is his limit and so on..so that he would not attempt to cross out of bounds area is the thought of the word connotation.
Problem with us we have all ‘ideations’ but we definitely are short of grasp of the word called ‘decoding’; as our own reasons either holds or may not be one really understands the depth of a word.
Lord Krishna tells Kauravas – Dirutharashtra Duryodana and others…’Look here the Pandavas completed the punishment process adequately correctly, you need to restore his kingdom, when rejected he goes to the extent of five villages be given to Pandavas…that is judicial restraint Lord adopted; but Kauravas misused thelr discretionary powers; result was that led to Mahabharata war that completely destroyed both families.
Principle here is when you exceed your discretion there is definitely complete destruction inevitable
Therefore, from Mahabharata gave the principle of judicial restraint. That foreigners adopted they progressed, but we think we are better than Gods like Kaurava thought, tat means we would meet the destruction more faster than any; in our own interest we ought to develop our own limits, like when you find food you have taken is enough then do not take more, like if you take water more than your need, you land in oedema that way the Law of Limitation came as a claw, on you.
It is like if your intake is reasonably enough with water content you would never land in constipation is a medical discipline.
that medical discipline is a judicial restraint on using the medications. If you use too many drugs you cannot be out of drugs, that itself causes you become drug friendly but not body or health friendly.
Judicial discipline is health friendly concept like in every walk of life.
Yo could have seen Dred Scott decision in 1857 led to American Civil war that effect continued, that the judicial discipline when failed in whites that killed president Mr. J. F Kennedy, so any thing goes beyond limitation would end up with bad results.
Hence, one needs to think his own judicial limitation himself, no point to depend upon some government or some such thing that is what Gita reiterated sir.
Idea of courts came other than King’s courts, when you hear the arguments of Lord Edward Coke with James I in 1608, Lord Coke finally drove the point king is to follow.. ‘Bracton saith ‘quod Rex non debet esse sab homine, ted sub Deo et lege’ (that the king should not be under man but under God and law)…when Kings walked away that judicial restraint, all kinds of problems started. thanks
tks.
Dr. G. Balakrishnanji, I am thrilled by seeing your expression of the judicial restraint. I fully agree with your words “Principle here is when you exceed your discretion there is definitely complete destruction inevitable”. It may be seen that (1) due to frequent change in stands in the provisions of Sec. 143(1) the processing had been entrusted to outside agencies; (2) even the selection of scrutiny cases had also been shifted to Computer Aided Selection of Scrutiny because there was huge inconsistencies; (3) Even in disciplinary matters connected to Group A officers the opinions are shifted either CVC or UPSC as per HOTA committee report; (4) allotment of PAN, issue of refunds all had been entrusted to outside agencies; (5) the present creation of committees to punish the AOs who make high pitch additions will also affect those ill-will appellate authorities who are accustomed to easy moneys; (6) already a sort of indiscipline atmosphere had been created among the oppressed staff.
It is for the CBDT which is to instill confidence in the system and governance.
Little does the CBDT realise the the assessing officers are the joint commissioner of income tax and officer above them. I would like to see how many of these officers are hauled over fire !!!!They treat the assessing officers as dirt and conveniently put the blame of their inefficiency on these low officers.
The rot is at the top (finance ministry). Directive to CBDT for target collection filters down to Assessing office who has no choice but to fall in line of his superiors to make adventerous assessments. Of course lack knowledge of the Act, and for ulterior motives the AO’s frivolous orders are passed. The assessee is always at the receiving end and to buy peace and furhter harrasment he has to induldge in corrupt practice as demanded by the AO.
Lack of accountabilityby anyone in the chain of hierarchy is the root cause of all problems.
The malady is many fold with the Service tax department who are much more adventurous.
It is the higher authorities who are to be blamed.Further appeals to High Court and Supreme Court is suggested mechanically without appreciating the merits and consequences. If one frivolous appeal is filed ,the other officers have to follow suit. Since the time taken to adjudicate takes longer duration, till such time the assessees have to suffer by getting the same lawless treatment inflicted upon them. If these officers who authorize such frivolous appeals are made accountable and even penalized to the extent of costs to the government and assessee, the system is bound to change for good. If assessees are adventurous , they are penalized and at times prosecuted. What if the assessing officers are adventurous? No accountability.
The Public Accounts committee in Para 12 of its recommendations has urged the government;
“The Assessing Officers responsible should be held accountable for wastage of time and resources of the Department by making frivolous assessments which ultimately resulted into piling of appeals at various levels.” May GOD bless the government with honestly implementing the suggestions.
Can any body give a concrete definition for:
“Adventurous Assessment Orders” “Frivolous Additions” “High pitched assessments” without any scope for debate or second opinion.Then talk making A.O. accountable. Don’t exaggerate corruption in dept. See any state govt office, you will never get any work done without palm-greasing Farmers in Eluru and Kadapa districts have committed suicide unable to pay bribes to Collector’s office staff to get a basic document like ‘pahani’.
I am amused at Ranga Rao’s query.I understand he is a Joint Commissioner of Income Tax .In so far as the Income Tax Department is concerned the Joint Commissioner/Addl.Commissioner of Income Tax are the assessing officers under the IT act 1961. By virtue of his designation he is the Range head who needs to guide the officers under him for implementing the act.With the years of experience that he has he should know by now the definition of the words used by him . He has the responsibility to decide.If he cannot he can always seek the guidance of the Commissioner.Asking for a definition for the words does not show him in good light as he is a quasi judicial officer too whose judicial discretionary power cannot be hijacked by another .
CBDT pressurizes the assessing officers through hierarchy to frame quality assessments. On doing so and to save their skins hey create huge infructuous demand of tax . Such assessment orders get knocked off at the very first test before the CIT(A), the rest find their grave at ITAT level. The AOs making such order are never held accountable. Personal demands run into lacs. Accountability levels should be set to put a stop to such practices.
It is good observations but need to take action against those assessing officer who had passed hipeach assessment order and undue hardship and pressure for collection of tax.
WHATEVER THE COMMITTEES SAY, NOTHING IS GOING TO CHANGE. EVEN HIGHER AUTHORITIES ARE BUGGED BY INACTION. NO ONE WANTS TO TAKE ANY DECISION AGAINST HARRASSMENT OF ASSESSEES. EVERY ONE GIVES LIP
SERVICE BUT PASSES THE BUCK. IT IS REALLY DISCOURAGING SCENARIO. SHAME, SHAME AND SHAME. WASTE OF TIME AND ENERGY, PREVIOUS MAN HOURS ARE LOST IN UNNECESSARY PAPER WORK AND THOUGHTLESS ADDITIONS WHICH NEVER STAND TEST OF LEGALITY. WE WANT ACCOUNTABILITY. WHOLE SYSTEM IS RIDDLED WITH CORRUPT PRACTICES. HONESTY SURVIVES ONLY ON HOPE OF BETTER TIMES. AMEN.
WHATEVER THE COMMITTEES SAY, NOTHING IS GOING TO CHANGE. EVEN HIGHER AUTHORITIES ARE BUGGED BY INACTION. NO ONE WANTS TO TAKE ANY DECISION AGAINST HARRASSMENT OF ASSESSEES. EVERY ONE GIVES LIP SERVICE BUT PASSES THE BUCK. IT IS REALLY DISCOURAGING SCENARIO. SHAME, SHAME AND SHAME. WASTE OF TIME AND ENERGY, PREVIOUS MAN HOURS ARE LOST IN UNNECESSARY PAPER WORK AND THOUGHTLESS ADDITIONS WHICH NEVER STAND TEST OF LEGALITY. WE WANT ACCOUNTABILITY. WHOLE SYSTEM IS RIDDLED WITH CORRUPT PRACTICES. HONESTY SURVIVES ONLY ON HOPE OF BETTER TIMES. AMEN.
I don,t feel ,anything is going to change. When , the FM wants the officers of the department to meet Tax collections , how the things are going to change. Unless and until they such kind of adventrous orders and then harasses the assessee for paying the demand , how will the fullfill their targets.Has ,anyone wondered or tried to find out the % of the collection of taxes by way of scrutiny assessments( Not by making additions, Additions which are atleast confirmed by ITAT, High court, Supreme court). Hardly 1% of the total collection of total taxes.How many appeals are confirmed in favour of the department?
I did . i realise there is no collection made by the AO!!How do I come to this conclusion?Just one percent of the collection is on the basis of assessments made but the assessing officer /the departmental officers by their inaction squander away this amount by paying interest on belated issue of refunds The resultant effort is a negative figure. But the single police man on the traffic island does instill fear which ensures free flow of traffic.
Fear psychosis does not work much. Traffic police man gets his bribe by his so called fear idea. What it shows is the police man instead of really issuing memos he takes bribes. If you ask a motor cycle rider, if he makes an error near signals he pays rs 50.-to the traffic police man who is readily picks up and allows you go. What it shows, fear indices corruption.
Taxpayer need not suffer from fear; but if done naturally he ends up paying bribe to AOs, just because of fear of penalty idea, if AO cannot charge penalty, naturally the tax payer would end up paying tax relevant. that is all friend.
The most crucial and harasment procedure that initiated after assessment is penalty proceedings. Officials misuse their discrationary power due to lack of knowledge of proceedure of law. There should be a “Nigrani Board” to control over the misuse of power and benefited to the assessee/ honest citizens. Arbitrary additions never generate revenue to the department but create unnecessary litigation for the assessee who lost their hardend earned money to save himself from harasment of the officers.