It is often observed that Assessing Officers make bogus additions and raise unjustified income tax demands on the basis of frivolous grounds. They also adopt compelling measures to recover such demands. This results in hardship upon the humble taxpayers.
Assessing Officers to become accountable for raising bogus demands
There are mainly two causes for such behaviour of the Assessing Officers. The first cause is that the CBDT rewards the officers with promotions on the basis of the amount of the revenue collected by them. The second cause is that some unscrupulous officers adopt such unlawful means to demand bribes from the tax payers.
The Courts in the country have passed many strictures to the Assessing Officers restrain themselves from passing such frivolous assessment orders. However, the Assessing Officers have failed to pay any attention to such directions.
Judicial precedents covering strictures to the Assessing Officers:
In the case of UTI Mutual Fund vs. ITO, 345 ITR 71, the Bombay High Court has discouraged the tendency of the Assessing Officers to raise bogus demands to meet their own targets. It was held that directions for fulfilling the targets for the collection of revenue should not be at the expense of the honest assessees. “There should be transparency in a demand” the Court also held.
In the case of Bharti Airtel vs. ACIT, 161 TTJ 428, where an addition of Rs. 5,739 crore was made on a frivolous basis, the Tribunal held that the department should be accountable for the hardship caused to the taxpayer.
In the case of CIT vs. Samcor Glass Ltd, the Delhi High Court directed the department that specific guidelines should be followed to prevent abuse of powers of the Assessing Officers.
Opinion of the Hon’ble Prime Minister:
The Hon’ble Prime Minister Narendra Modi has paid attention the sufferings of the taxpayers. In his speech, the Prime Minister has expressed that Assessing Officers will be held accountable for the orders passed by them.
The Hon’ble Prime Minister also expressed to take steps to serve the honest taxpayers in a better way.
Electronic filing of returns currently covers maximum tax returns. In the earlier times, electronic returns were followed by a paper verification which took weeks to be processed.
Presently e-verification using Aadhaar has been introduced and many taxpayers are using this facility. For them, the process is very simple and is completed instantly involving no paper.
This year, more than 90% of electronic returns were processed within three months as compared to 46% processed last year.
Directions upon the department:
The Income Tax Department has been directed to make a system where scrutiny will be done without moving to the office. All sorts of queries should be answered online or through E-mail. This is being aimed covering five big cities.
The performance appraisal system of Income Tax Officers has been instructed to be altered. The system should reflect whether or not the orders passed by the officers have been upheld on appeal. This will put an end to corruption and also make the assessing officers to pass correct orders.
Hopefully, the CBDT will respect the directions of the Hon’ble Prime Minister and implement a new method to ensure that there is no abuse of powers of the Assessing Officers and that they are made accountable for the hardship caused to the common taxpayers of the country.