As the income-tax department pats itself on the back for unprecedented receivables of Rs 100,000 crores in 2017-18, thanks in part due to demonetisation, the Central Board of Direct Taxes has issued a strong directive against “high-pitched” and “unreasonable” assessments of taxpayers and said assessing officers who issue such irrational orders be transferred and face disciplinary action. The department even failed to utilise the special drive launched to resolve taxpayers’ grievances.
The Comptroller and Auditor-General, in its 2016 report, had said there were 32,834 disputes pending at the I-T appellate tribunal, with Rs 135,984 crores in dispute. The issue here is of assessing officers using his/her unbridled discretion in a brash way. In cases where such brash presumptions are reversed, there is no departmental action against him/her for the harassment and mental torture caused to assessees. Just shifting him/her to a nondescript post as suggested by the CBDT chief doesn’t seem adequate. The affected taxpayer has a civil remedy and can seek damages, but few go to court as the process is long and he/she may end up spending more than the sum in dispute. This situation often leads to bribery and corruption — if the officer is corrupt he may make a deal to lower the assessment in return for a kickback.
The CBDT also has to enforce more strictly the use of the special drive launched in 2015 to resolve taxpayers’ grievances. It can do this with a carrot and stick policy. Interestingly, the CBDT chief’s move to make officers comply by seeking a compliance report every three months gives room for hope for justice for the taxpayer. Close monitoring of officers is essential if taxpayers are to get a better deal.