Some Welcome Suggestion for improvement in income tax department and for reducing Trust Deficit by AIFTP Income Tax Coordination Committee
September 21, 20210 Comments
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Some Welcome Suggestion for improvement in income tax department and for reducing Trust Deficit by AIFTPIncome Tax Coordination Committee
18th September, 2021
To, The Chairman, Central Board of Direct Taxes, North Block, First Floor, New Delhi 110 001
Re: Some Suggestion for improvement in income tax department and for reducing Trust Deficit
We are happy that there is considerable stress by the Government on improving functioning of Income Tax department and commendable actions have been taken mainly in the area of computerization and faceless functioning. However, we would like to make the following suggestions for better functioning of the department:
1) Sir, there is practice of harassment and passing high pitched assessment in some cases including in faceless assessment scheme.
2) There is lack of accountability. This substantially affects NRI investments adversely and thus national economic interest also suffers.
3) We feel that action against erring officials will be instrumental in completion of assessments in a judicious manner and the officials will carry out the assessment proceedings following the principles of natural justice. Your honour is aware that Delhi High Court has set aside some high pitch faceless assessments on the ground of violation of principles of natural justice.
a) Centum Finance Limited v. NFAC, Delhi WP(C) 6977/2021 Order Dated 12.08.2021 :It has been held that where assessee could not respond due to technical glitches on IT portal and insufficient time was provided by the AO, the assessment order passed is in violation of Principles of Natural Justice and hence the assessment was set aside.
b) Civitech Developers Pvt. Ltd. v. National E-Assessment Centre, New Delhi WP(C) 6669/2021 Order dated 22.07.2021: It has been held that that where the option to opt for personal hearing was not enabled, the petitioner due to technical glitches could not request for personal hearing on the e-portal but it requested for the same in communication made by it. Consequently, it cannot be said that the petitioner did not opt for personal hearing in the present case and as such the assessment was set aside.
4) The assessee are generally fearful of complaining against erring officials for fear of revengeful actions by the authorities. Hence in order to improve functioning of department it is suggested as under:
a) Section 166 of Indian Penal Code provides for criminal action against officers who are abusing their powers. Prosecution under this section can be filed by the assessee himself.
b) Lodging of a compliant by the assessee requires prior approval u/s 197 of Cr. P.C. from the Disciplinary authority who are generally reluctant; and such approvals do not come or does not come in time. The complainant then has to file writ in High Court for direction for giving such approval. This is expensive as well as tedious procedure. Such approval is very rarely sought by assessee as only few have courage to invite ire of officers. Hence it is suggested that as a policy such approval should be accorded within at best 60 days, where abuse of power is apparent.
c) Sir, if such approval is given in at least one case per month, functioning of whole department would drastically improve. Officers would be objective in approach and would be more accountable. Tax payers would also be satisfied and above all, there would be better goodwill and reputation of the Income Tax department in national as well as international circle.
d) The high officials admit that there is “TRUST DEFICIT”. Such meaningful actions, as aforesaid, will help in winning the trust of taxpayers. At the same time, the Government would achieve the objective of improving the department and the dream of Hon’ble Prime Minister Shri Narendra Modi ji would also be realized.
5) There is a need to reduce litigation. The high pitch assessments without evidence and in flagrant violation of natural justice made by the authorities lead to unnecessary litigation at the level of first appeal and then the usual practice of preferring appeals by the department in ITAT and High Courts also add salt to the injury. In at least 80 per cent cases, the departmental appeals are dismissed. The monetary limits prescribed by CBDT for departmental appeals has been praiseworthy but the action at the ground level Assessing Officers also need to be properly monitored for winning the trust of taxpayers and for the ends of transparency and justice.
6) Conclusion: We are hopeful that your honour would be kind enough to consider the above suggestions and take appropriate action.