Income Tax

CBDT to make scrutiny guidelines public

The CBDT has issued an instruction on 02.09.2014 announcing that the criteria for selection of cases for scrutiny for the financial year 2014 -15 shall be made public pursuant to the direction of the Delhi High Court given in the case of Joginder Pal Gulati vs. OSD – CPIO, W.P. (C) 6773 of 2011. The Delhi High Court in its judgment has directed CPDT to upload the scrutiny guidelines on their website.
Brief facts of the case:
The petitioner, Joginder Pal Gulati filed a writ petition before the Delhi High Court being impugned by the order of the Central Information Commission dated 12.07.2011 passed against him. A writ in the form of mandamus was sought directing the Central Board of Direct Taxes, the respondent therein, to supply the copy of their circular dated 19.06.2009.
The petitioner being an advocate by profession and primarily practicing income tax laws, filed an application on 05.07.2010 before the CBDT under Section 6 of the Right to Information Act, 2005 asking for information relating to cases excluded from scrutiny. The petitioner further asked for information in connection with the scrutiny guidelines for the financial year 2009 -10. The CPIO of the CBDT through a letter dated 19.07.20 10 refused to furnish such information which was asked by the petitioner.
Being aggrieved by the said reply, the petitioner filed an appeal before the first appellate authority wherein an additional request was made for providing the judgment dated 11.02.2008 passed by the CIC in the case of Shri Kamal Anand appearing before it. The appeal was dismissed on 03.08.2010. However, the petitioner received the copy of the judgment delivered in the case of Kamal Anand.
Being dissatisfied with the said order of dismissal, the petitioner filed an appeal with the CIC, which was again dismissed. The petitioner had filed copies of scrutiny guidelines for the financial year 2004-05 and 2007-08 along with the appeal which were already public.
Finally the petitioner moved before the Delhi High Court.

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Arguments on behalf of the petitioner:

The Learned counsel for the petitioner submitted that the impugned order was bad in law and could not be entertained in law or on facts due to the following reasons:
(i) The information regarding scrutiny guidelines was all along public.
(ii) The receipt of information regarding scrutiny guidelines was necessary as it would have enabled the petitioner to advise people as to whether they have been rightly picked up for scrutiny.
(iii) Information have been refused under Section 8(1)(a) of the Right to Information Act, 2005 Act on the ground that furnishing information regarding scrutiny guidelines would hamper the economic interest of the nation.
The counsel for the respondents submitted that to avoid harassment to the public and to ensure bonafide attitude of the department in picking up cases for scrutiny, selection is done through Computer Assisted Selection Scheme.
It was further submitted that if the selection of scrutiny cases was done manually, there might have been economic manipulation. According to the learned counsels for the respondents, to ensure that there is fairness in selection of cases picked up for scrutiny guidelines have been provided to the Assessing Officers which, if made public, would help people to manipulate their income tax returns.
The learned counsels appearing on behalf of the respondents further contended that scrutiny guidelines are issued in the beginning of every financial year and they apply to both pending returns as well as those returns which are filed later on. The said guidelines operate till fresh guidelines are issued. It was also submitted by the CBDT that the CIC has correctly upheld the contention of the respondents in refusing the request of the petitioner for providing the information sought for in this case. According to the learned counsels for respondents the impugned information comes within the purview of Section 8(1) (a) of the RTI Act and is excluded from revealing before the public as it would hamper the country’s economic interest.
The decision:
After hearing the learned counsel for both the parties and after perusal of the record, it was observed that instructions regarding procedure based on which the officers make a random selection of cases for scrutiny were available to public even before the enactment of the RTI Act.
It was pointed out that the instructions for scrutiny were issued in the beginning of each financial year, as such, the contention that assessees would manipulate their returns affecting the economic interest of the country cannot be accepted.
It was held that guidelines are issued to prevent harassment to the general public and there cannot be any reason for the respondents to conceal it from the public. Thus, it was held that Section 8(1) (a) of the RTI Act is not applicable in the instant case.
In view of the above observations the impugned order was set aside. The respondents were directed to supply the scrutiny guidelines to the petitioner for the financial year 2009-10 and to upload the guidelines on their website. Accordingly the writ petition was disposed of.

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