TAX TERRORRISM AT GROUND LEVEL CONTINUES HIGH IN NAMO /MODI SARKAR – REQUEST TO MAKE A CHANGEOVER

[CA DEV KUMAR KOTHARI]

Tax collection is a must to run government:

There is no doubt that tax collection is a must to run government. Public must contribute to the exchequer . However, tax collection must be proper, reasonable and in legal manner. Unreasonable rates of tax, and collection in illegal manner must be avoided. However, public feeling is that illegal demand of tax and collection of such illegal demand is on rise during NAMO government.                                       

To ensure better tax collection productivity and efficiency of government must improve:

To ensure better tax collection productivity and efficiency of government through its various departments, undertaking must improve. The public must have feeling that the man, material and money spent by government is spent wisely, properly, effectively and in best interest of public. There must be assurance that there is no siphoning of funds and material by government authorities. There must be true feeling amongst public that public servants are really working like a public servant and for benefit of public (including himself as public)  and not for own benefit. There should not be fear of so called public servants who act as public masters to threaten public, harass public and extort money from public in illegal manner by improper exercise of powers or by not exercising power by acting on time and in proper manner.

Government for poor people:

It is okay that NMAO / Modi Government claims to be a government for poor people:

It is okay that Modi Government claims to be a government for poor people and that has shown results in recent election for Legislative Assemblies of Uttar Pradesh, and Uttarakhand where unexpected, unprecedented, and above expectation wins have been made by BJP. Results at other places have also been good for BJP except in Punjab, where, perhaps pre-election alliance have caused poor performance.

   Poor can be made rich only if there are rich people:

Poor people can improve their financial status with help of rich people. The role of rich people cannot be undermined. Rich people pays taxes, provide employment to poor or relatively poor people, provides charity, donations and facilities for poor people.

 Employments created by rich people through trade, commerce and industry goes a long way in improving financial health of poor people.

We find many of our neighbours, relatives, and friends who were in category of very poor or poor people about 20-25 years ago. Today many of them have attained status of upper middle class, middle class and some have become Rich. This was possible with help of poor people by government, rich people (employment creator), rich people- tax payers who contributed to government revenue and in turn government was able to aid poor people.

Therefore there should not be bias against rich people.

The disparity should be reduced:

No doubt, disparities of wealth must reduce. But it cannot be fully eliminated for the reasons which are natural because people have different capabilities, and luck. Even equally capable people may have different financial health because of luck factor.

Actions and measures should be taken against people who have amassed wealth by illegal and improper means like by way of bribes. Such ill-gotten money must be forfeited from all such persons. However, no actions seems to have been taken. Officers are empowered to demand more bribes. High denomination notes of ₹ 2000/- has also made collection and holding of such ill-gotten money easy for such people.

Public feeling is that tax terrorism is at peak during present government:

It appears that the tax terrorism is at peak during NAMO/ Modi Sarkar. This is so at ground level of tax administration as well as at legislative level. More and more powers are given to tax authorities by which they are being more empowered to threaten tax payers by raising demands for tax,  interest,  penalty and  also threatening to  launch prosecutions even when  claim of tax payer is supported by binding precedence which is not being followed by AO as well as CIT(A), and appeals are pending.

Except where tax related work is carried out by information technology based tools, the tax terrorism is increasing.

Whenever there is human intervention of tax authority, it is likely that terrorism tactics may be adopted by tax authorities.

The public feeling is also that such practices are being applied for want of illegal gratification. If tax payer does not agree to demand of tax authorities, it is most likely that tax payer will be harassed and may be punished by raising illegal demands.

High Pitched assessments:

High pitched assessments are made just due to bias, presumption and suspicion.

Assessments are made contrary to settled legal position as well.

Threating of penalty proceedings is conveyed in most of notices and communications.

 Direct or indirect express or implied threats are made by tax officials during scrutiny assessments, and appeals for surrender of income / disputed claims. During survey and search also heavy pressure is exerted by tax authorities to surrender more and more income.

No relief in appeals - even binding precedence are not followed:

It has been observed that in appeal also relief is not allowed. Binding judgments of Tribunal and Courts are not followed. Even binding judgments which have attained finality are not followed. The appellate authorities are in one mood- to confirm additions as far as possible. It is unfortunate that appellate authorities are not following binding precedence and just avoiding even mention of the same in order. Even if it is referred in order, just simply saying ‘facts are different’, the binding precedence are not followed and demands are confirmed.

Rectifications are also not carried out:

Even rectification of errors which are apparent from records are not made by tax authorities. Cases have been noticed that demands have been raised by not following binding judgments, even past loss and unabsorbed depreciation which form part of current depreciation is not set off and demands are raised and then pressed to pay or coercive measures can be taken.

By making rectification like set off of past losses, unabsorbed depreciation, allowing full credit of tax paid etc. demands can be reduced. However even such simple rectifications are being denied on ground that assessee has preferred appeal therefore it is not rectifiable. The matter remain rectifiable, even if a ground is taken as cautionary measure by the assessee. However, by denying rectification, tax authorities are trying to collect at least 15% of grossly illegal demand.

During period of NAMO Sarkar cases of reopening, reassessment and revision also appears to have increased. And many of such proceedings are contrary to law.

Pressure to pay tax demand:

Great pressure to pay even illegal demands (which are contrary to binding precedence) are being exerted. Now-a-days tax officers are also visiting tax payer’s premises to exert pressure and collect such demands.

Tax authorities must have regard to tax payers:

Tax authorities must have due regard for tax payers. However, unfortunately tax authorities have rarely regard for tax payers. Most of them presume that tax paid is a slice of tax payable.

Experience shows that honest tax officers have regard to tax payers. Honest tax officers are found very hesitant to make comments like ‘bogus claim’, ‘bogus purchases’ ‘bogus expenditure’  ‘bogus loan’ bogus exemption’ etc. This is because an honest person generally feel that others are also honest.

Whereas dishonest tax officers have no hesitation at all and feel it very free to make such comments like ‘bogus claim’, ‘bogus purchases’ ‘bogus expenditure’  ‘bogus loan’ ‘bogus exemption’,  ‘bogus credit’ etc. and that too contrary to facts and circumstances of the case and when they know that such addition made will be deleted in due course of adjudication in appeals.

A dishonest person generally feel that all others are also dishonest - In other words,” choro ko sare najar aate hai chor” is applicable to all dishonest peple.