ADVENTUROUS ORDER-THE ASSAYING OF A TAX PAYER

[Harish Chander Bhatia]

ADVENTUROUS ORDER

THE ASSAYING OF A TAX PAYER

This write-up is an attempt to explain the term ADVENTUROUS ORDER, since it is not defined in the Income Tax Act. I was a bit skeptical  to use this terminology for such a sanctimonious order being of fundamental significance and back bone of the entire income tax law, without it many of the sections of the act would either become useless or hazardously useful. Few days back, while going through the report of Parliamentary Public Accounts Committee, I noticed to have used the term adventures order, while analyzing the functioning of the department. This motivated me to go further and write few words for your reading .The observatory paragraph of Parliamentary Public Accounts Committee is reproduced below:-

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 

I do not have any statics, but I am very sure that every professional must have faced one or more instances of getting an adventures order, because, now a days the department has special quality of adventurous officers recruited, those have no respect for themselves what to talk of and expect for others .To my knowledge, the term adventurous is no where defined in the income tax Act except in the report of Parliamentary Public Accounts Committee, but even its use is rampant. Not being part of the act, but has a complete support and immunity of the department to its creators, who assays the taxpayer and goes to any egoistic way to tarnish the very spirit of the taxpayers.

Whenever a notice u/s scrutiny assessment  is received by the tax payer, he starts to make up his mind to budget for Gandhi Bhakti expenses, like a poor father in orthodox families plans, the moments a girl child take birth in the family. Unless you are a devotee of Gandhi Bhakti or also have strength to shell out some Gandhis, you can never get blessed, or if you happen to have a chance without Gandhi Bhakti, the product, the result, the outcome you get is called an "adventurous order."

When the whims and fancies of the assessing officer is frowned and the officer is bent upon to act in an adventurous way, not caring for the professionals oral/written and hand folded submissions, the officers smirks at the buoyancy of the ego and this way or that way tear off and pull apart the web of the image and without any meekness towards the taxpayers, an order, a dictate takes the birth, which is called an "adventurous order."

Post that, the taxpayers doubt the integrity of the professional and professional worries for the survival of tax payers besides fear of losing the client.

These are fatal to the economy, prolific to the department, heart sinking for the tax payer and trouble shooter for the professional. 

But those imperfect, naive and juvenile officers, never ever know how this adventures act of theirs is causing imbalance in the economy and disturbing the entire statics and further have been the cause of frown and anguish of members of the parliament committee. Why these officers are not screened and taught the fiscal ethics, moral of the economics. Is the selection of them being and IRS/IAS officer is sufficient yard stick of being a person of prudence, certainly not, there is a saying that “sometimes the fools who rush in win the race”. 

The department should screen the reason for inflation of demand and assessment orders of those so called assessing officers are set aside, annulled, not implemented or demand not recovered, should be divested of their powers and instead of routine promotion should be assigned the job of least importance, More appropriately those officers for their own conscience should recluse themselves from assessment work. but this is not so, I think there has been a rare case, where any of the officer has been demoted or suspended, charge-sheeted  or reprimanded, even after many strictures of higher authorities, the departments or it's team have not been able to mend their style of working.

The Parliamentary Public Accounts Committee has observed that:-

44. Audit had pointed out that in 2010-11; only 64.1 percent of the total demands cumulatively raised in assessments up to that year had been collected. At the end of 2010-11, as much as ` ₹ 2.9 lakh crore remained uncollected. This comprised demand of  ₹ 2.0 lakh crore of earlier years and current demand (2010-11) of ` ₹ 0.9 lakh crore.

45. Further Audit had highlighted that the recovery mechanism was inefficient as certified demand remaining uncollected increased to ` ₹ 1,06,990.8 crore (96.3 percent ) in 2010-11 from ₹ ` 26,703.9 crore (75.8 percent ) in 2006-07. However, in 2009-10, earlier years pending demand was ` ₹ 1.8 lakh crore and current demand was ` ₹ 0.5 lakh crore.

7. Uncollected Demands: The Committee are further concerned to note

That at the end of FY 2011-12, as much as ₹` 4.0 lakh crore remained uncollected. This comprised demand of ₹ 2.6 lakh crore of earlier years and current demand (2011-12) of ₹1.4 lakh crore. Further, the trends of percentage increase in uncollected demands indicate that the demand which has decreased from 61.96 percent in 2008-09 to 13.79 percent in 2009-10 has again increased to 40.04 percent in 2011-12. The Committee are further surprised to find that there are as many as 69 cases (51 cases of Corporate assessees and 18 cases of individual assessees) of demand of above ₹` 400 crore and above having uncollected demand of `₹ 2.08 lakh crore. The contributory factors as stated by the Ministry for this huge pendency are that the taxpayer has no assets, taxpayer is not traceable, recovery is stayed by the court or ITAT, company is under liquidation etc. With regard to demand pending against 25 top defaulters, the Committee found that most of the cases were pending with various judicial forum and the proceedings for the same are continuing. The Committee further found that out of these approximately 45 percent of the demands pertain to Money laundering and security scam cases where according to Department it may not possible to collect huge demands as seized assets were inadequate to meet the demands. The Committee would expect the Department of Revenue to vigorously pursue such cases and apprise the Committee of the outcome thereof. Another reason attributed by the Ministry for slow recovery of uncollected demands is that the Tax Recovery Wing in the Department has been functioning with depleted staff strength. The Committee cannot but express their concern over the lack of sustained follow up by the Ministry towards such a vital area of tax recovery and recommend that urgent steps be taken to depute adequate staff strength so that the recovery work does not suffer on that account. Suitable arrangements should also be made to impart training to the personnel deployed in the field of tax recovery with a view to optimizing their level of efficiency. With regard to the pendency of demand due to assessees not being traceable, the Committee recommends the Government to further strengthen their institutional and procedural safeguards so that traceability of assessees could be managed well and revenue due to the Government could be recovered. The Committee also expresses the need for publishing the names of defaulters in the media so as to reduce the number of assessees not traceable. The Committee has since been informed that a two-pronged strategy has been adopted by the Department to enhance disposal of pending demands. A special Cell has been constituted in the Directorate of Recovery to monitor undisputed demand. Further, a detailed target is laid out vide Central Action Plan for year 2012-13 to monitor all areas of arrear demand collection. The Committee hopes that the Ministry will closely monitor the achievement of these recovery targets in a time- bound manner. The Committee may be apprised about the outcomes achieved as a result of these steps.

 One thing very interesting is coming to my mind that the department has mainly two types of posts for every rank, the one is assessment post and other is non assessment post. Why it is so, a particulars officer when becomes the income tax officer, ( just on the basis of passing of the compromised or well accommodated  examination  and without any training) he/she is not given the assessment post, like a child in its infancy is kept away from the proscribed literature and after one year so the transfer is made to assessment zone and the officer becomes a full fledged assessing officer, like a cub  on attaining majority is left in the wild environment to perform any act as per its wishes, desires, whims and fancies. After two or three years of jungle raj, he is caught and brought back and sent to a cage, which is called non assessment zone. This is done so to allow him to digest those, who fell prey during jungle raj. Interestingly the TDS wards which used to be a non assessment zone about a year back has now become assessment zone. What was basis or statics the government had to do so, but government might having able to understand that by passage of time our lion could have pleasure in this zone too. Sooner or later the left out non-assessment zones would also becomes assessment zones, because the virus of corruption is spreading in a swift and a systematic manner

It cannot be said any of the above act of the department is ignominious, because everybody has his own common sense to define ignominy according to his own needs and act. What may be ignominious for one may be pride for others, it is every body’s own perception. Even after 66 years of independence, we still have not been able to decide should we be honest or dishonest or transposable as per the opportunity. 

Now, in the sleazed environment, one has to prove, why he is honest?

 I think, it would be appropriate to quote,

शहर शरीफ़ों से ख़ाली हो गये , जितने कमजरफ थे , वो रुतबे आली हो गये,

ऐसा बदला है यारों ज़माना , जितने हरामी थे सब हलाली हो गये।