TAX ADMINISTRATION- TRANSPARANCY – DOCUMENT IDENTIFICATION NUMBER {DIN} - CBDT CIRCULAR, just before Independence day.

[CA DEV KUMAR KOTHARI]

A day before Independence Day:

A day before Independence Day is important in many respect in relation to the public of India, the Central Government of India, State Governments and local authorities and various government department. There are full swing preparation to celebrate Independence Day on 15^th August every year.

This also include message of the President of India. This year also the President of India Addressed the Nation on 14th August 2019.

Circular issued by CBDT on 14^th August, 2019 hopefully will lend some independence to tax payers from some clutches of tax officers:

CBDT is also not behind, we find a very  important Circular and Press Release issued on 14^th August 2019 – just a day before the independence day. The Circular, if implemented in proper way and with accountability of tax officers, will give some freedom to tax payers and tax professionals from many irregularities, and high-handedness adopted by tax officers in dealing with tax payers and tax professionals.

The Circular emphasis about  e-governance initiatives,   computerization of  work,    delivery of services, document identification number (DIN) and  audit trail of  communications with tax authorities. As discussed in this write-up , audit trail for communications of taxpayer also must be assured so that tax officers cannot ignore submissions of tax payers.

Delivery of service:

If we properly read and try to understand the concept of delivery of services, it means that the tax authorities have to change their attitude as a service provider and not as officers having  free hand to harass tax payers and tax professionals. As a service provider, tax officers must have some respect and regard to the tax payer for tax paid by him, time of tax payer and tax professionals.

Tax payers   should not be suspected or  doubted about tax payments. This is very well recognised by the Government and top policy makers that is why more than 90% of Returns are accepted.

However, whenever there is scrutiny, either as original assessment, re-assessment or revision or other proceeding, the deep ingrained misconception  in minds of tax officers is that the tax payer is chor – that is why we had seen cases of even highest tax payers being treated as chor.

 This is expressed in many ways like bogus purchases, bogus loans, bogus transactions, bogus claims  etc. in complete disregard of facts, circumstances and documents and evidences. This lead to litigation and disservice to taxpayers.

Experience shows that honest officers gives some  regard to tax payers, they do not, as a rule, doubt honesty of tax payers. Whereas, dishonest tax officers have pre-set mind to look at everything of taxpayer with an eye of suspicion and doubt. This may be due to fact  that such officers have more experience and information of  making bogus claims  in their own life and work. One may recall popular proverb CHORO KO SARE NAJAR AATE HAI CHOR”

The attitude that TAX PAYER IS CHOR need to be changed. This has led to disservice by tax department whenever there is scrutiny and high pitched assessments are made to harass taxpayers.

The Circular is silent about revision proceeding under section 263. There is no specific mention about re-assessment proceedings but one can assume that assessment shall include reassessment. However, these are areas where dispute can arise. So all proceedings must be included.

Exceptions provided for issue of manual notices are very wide and can be misused by tax officers.

Cut-off date:

As stated in paragraph 2 of the Circular the Board has decided that no communication shall be issued by any income­ tax authority relating to assessment, appeals, orders, statutory or otherwise,  exemptions, enquiry, investigation, in verification of information, penalty, prosecution, rectification, approval etc . to the assessee or any other person,  on or after the  15th day of October, 2019 unless a computer-generated Document Identification Number  (DIN) has been allotted and is duly quoted in the body of such communication.

The cut-off date is not proper. As we know in many of cases limitation for issue of notices u/s 143.2 will lapse on 30.09.2019. Therefore, in such cases, the Assessing Officer will have freedom to issue manual notices. For this purpose at least the cut-off  date should be revised to 15.08.2019 and it can be easily complied with because limitation of 30.09.2019 is applicable in respect of Returns of Income filed during FY 2018-19. Therefore, even if cut-off date is fixed to 15.08.2019 the Assessing Officers will have sufficient time to issue notices till 30.09.2019.

Hopes from implementation of the circular:

In spite of some short comings , some of which have been discussed in this write-up, let us hope that the Circular , if properly implemented  will  go a long way in transparency and service delivery system by tax department.

Submissions of tax payers must be responded by concerned officer:

One more thing need to be implemented that in e-proceedings, the concerned officer must also show the date when he saw communications of taxpayers. We find that even after lapse of 3-4 months, there is no noting found about date when the officer has seen submissions of tax payer. Cases have been that after considerable time of submissions, orders have been passed without any consideration, even of statement of facts, grounds of appeal, submissions and precedence relied on  and officers in order stated that f taxpayer has not at all responded to the notice. Readers may refer to the following article by author: 

Details and information in e-proceedings need to be more relevant and timely to make e-proceeding user friendly.  July 2, 2019

E-PROCEEDINGS OF APPEAL - MOCKERY EVEN AT LEVEL OF COMMISSIONER JUST TO DISMISS APPEAL IN ANY MANNER TO HARASS ASSESSEE – Why action is not taken against Erring officers? Will NAMO 2 government curtail power to harass public? July 13, 2019

Therefore, the CBDT must also ensure that the concerned officer looks at submissions of taxpayers, submitted in e-proceeding  and respond to the same. Mere auto acknowledgement is not enough in case of e-proceedings. Therefore, audit trail of communication from taxpayer should also be closely monitored to avoid attitude of ignoring submissions of taxpayers a which can happen or deliberately ignored to harass taxpayer.

The press release and the Circular are reproduced below with highlights added by author for analysis and understanding.

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 14th August, 2019

PRESS RELEASE

CBDT takes further steps to ensure transparency in Tax Administration by bringing in concept of DIN

With a view to bringing greater transparency in the functioning of the tax-administration and improvement in service delivery, almost all notices and orders of Income Tax Department are being generated electronically on the Income Tax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes (CBDT) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as “communication”) were found to have been issued manually, without maintaining a proper audit trail of such communication.

In order to prevent such instances and to maintain proper audit trail of all communication, the CBDT has, vide Circular No.19/2019 dated 14.08.2019 laid down parameters specifying the manner in which any communication issued by any income-tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person will be dealt with. All such communication issued on or after the 1st of October, 2019 shall carry a computer-generated Document Identification Number (DIN) duly quoted in the body of such communication.

CBDT has also specified exceptional circumstances where the communication may be issued manually but only after recording reasons in writing and with the prior written approval of the Chief Commissioner / Director General of Income-Tax concerned. In cases where manual communication is required to be issued, the reason for issue of manual communication without DIN has to be specified alongwith the date of obtaining written approval of the Chief Commissioner / Director General of Income-Tax in a particular format. Any communication which is not in conformity with the prescribed guidelines shall be treated as invalid and shall be deemed to have never been issued. Further, CBDT has also laid down the timelines and procedure by which such communication issued manually will have to be regularised and intimated to the Principal Director General of Income-tax (Systems).

In addition to the above, in all pending assessment proceedings, where notices were issued manually, prior to issuance of the above referred Circular, all such cases would be identified and the notices so sent would be uploaded on ITBA by 31st October, 2019.

This is another step taken by CBDT towards better delivery of taxpayer services while ensuring accountability in official dealings.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

 

Circular No. 19/2019

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, dated the 14th August, 2019

Subject: Generation/Allotment/Quoting of Document Identification Number in Notice/Order/Summons/letter/correspondence issued by the Income-tax Department – reg.

With the launch of various e-governance initiatives, Income-tax Department is moving toward total computerization of its work . This has led to a significant improvement in delivery of services and  has also brought greater transparency in the functioning of the tax­ administration. Presently, almost all notices and orders are being generated electronically on the Income Tax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes (the Board ) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as “communication”) were found to have been issued manually, without maintaining a proper audit trail of such communication.

2. In  order to prevent such instances and to maintain  proper audit trail  of all communication , the Board in exercise of power under section 119 of the Income-tax Act, 1961 (hereinafter referred to as ”the Act”), has decided that no communication shall be issued by any income­ tax authority relating to assessment, appeals, orders, statutory or otherwise,  exemptions, enquiry, investigation, in verification of information, penalty, prosecution, rectification, approval etc . to the assessee or any other person,  on or after the  15th day of October, 2019 unless a computer-generated Document Identification Number  (DIN) has been allotted and is duly quoted in the body of such communication.

3. In exceptional circumstances such as, –

(i) when there are technical difficulties in generating/allotting/quoting the DIN and issuance or communication electronically; or

(ii) when communication regarding enquiry, verification etc. is required to be issued by an income-tax authority, who is outside the office, for discharging his official duties; or

(iii) when due to delay in PAN migration,  PAN is lying with non-jurisdictional Assessing Officer ; or

(iv) when PAN of assessee is not available and where a proceeding under the Act (other than verification under section 13 or section 133 of the Act) is sought to be initiated ; or

(v) When the functionality to issue communication is not available in the system.

the communication may be issued manually but only after recording reasons in writing in the file and with prior written approval of the Chief Commissioner / Director General of income­ tax. In cases where manual communication is required to be issued due to delay in PAN migration. The proposal seeking approval for issuance of manual communication shall include the reason for delay in PAN migration. The communication issued under aforesaid circumstances shall state the fact that the communication is issued manually without a DIN and the date of obtaining of the written approval of the Chief Commissioner / Director General of Income-Tax for issue of manual communication in the following format-

“.. This communication issues manually without a DIN on account of reason/reasons given in para 3(i)/ 3(ii)/ 3(iii)/ 3(iv)/ 3(v) of the CBDT Circular No …dated ….. (strike off those which are not applicable) and with the approval of the Chief Commissioner / Director General of Income Tax vide  number …. dated   . .. .   “

4. Any communication  which  is not  in  conformity  with  Para-2  and  Para-3 above,  shall be treated as invalid and shall be deemed  to have never been issued.

5. The communication issued manually in the three situations specified in para 3- (i), (ii) or (iii) above shall have to be regularised within 15 working days of its issuance, by –

(i) uploading the manual communication on the

(ii) compulsorily generating the DIN on the System ;

(iii) communicating the DIN so generated to the assessee / any other  person as per electronically  generated  pro-forma  available on the System.

6. An intimation of issuance of manual communication for the reasons mentioned in para 3(v) shall be sent to the Principal Director General of Income-tax (Systems) within seven days from the date of its issuance.

7. Further, in all pending assessment proceedings, where notices were issued manually, prior to issuance of this Circular , the income-tax authorities shall identify such cases and shall upload the notices in these cases on the Systems by 31st October , 2019.

8. Hindi version to follow .

(Sarita Kumari)
Director (ITA.II), CBDT