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TMI BlogStatutory Foundations of the Taxpayer's Charter : Clause 240 of the Income Tax Bill, 2025 Vs. Section 119A of the Income-tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, enhance transparency, and foster trust between the Income Tax Department and the public. This commentary provides an in-depth analysis of Clause 240 of the Income Tax Bill, 2025, examining its objectives, structure, and practical implications. It further undertakes a comprehensive comparison with the existing Section 119A of the Income Tax Act, 1961, highlighting both the continuity and any divergences in legislative approach. The discussion also situates these provisions within the broader context of taxpayer rights, administrative law, and tax governance in India. Objective and Purpose The legislative intent behind both Clause 240 and Section 119A is to formally recognize and protect the rights and expectations of taxpayers whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax authorities as it considers fit for the administration of such Charter." Clause 240 is succinct but significant in its scope. It comprises two primary mandates: * Adoption and Declaration of the Charter: The Central Board of Direct Taxes (CBDT) is expressly required to adopt and publicly declare a Charter for Taxpayers. The use of the word "shall" denotes a mandatory obligation. * Issuance of Administrative Directions: The CBDT is empowered to issue "orders, instructions, directions or guidelines" to subordinate income-tax authorities for the administration of the Charter. The phrase "as it considers fit" vests discretion in the Board regarding the nature and content of such directions. The provision is broadly worded, granting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No substantive difference in legislative intent or operational scope can be discerned from this minor linguistic variation. Both provisions: * Impose a statutory duty on the Board to adopt and declare a Taxpayer's Charter. * Empower the Board to issue administrative instruments for the effective implementation of the Charter. * Do not prescribe the contents, structure, or legal enforceability of the Charter. * Are silent on the consequences of non-compliance by tax authorities or remedies for aggrieved taxpayers. Thus, Clause 240 essentially continues the legislative approach inaugurated by Section 119A, reaffirming the centrality of the Taxpayer's Charter in the architecture of tax administration. 4. Key Features and Is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Taxpayers may have to rely on administrative grievance redressal mechanisms or judicial review in cases of gross violation. 2. For Tax Authorities * Administrative Guidance: The Charter and accompanying directions from the Board serve as a code of conduct, guiding tax officers in their interactions with taxpayers. * Accountability: While the Charter may enhance accountability, the lack of explicit sanctions for non-compliance may dilute its impact unless backed by robust internal monitoring. * Training and Capacity Building: Effective implementation will require training of tax officers and systemic changes in administrative processes to align with Charter principles. 3. For the Board (CBDT) * Policy Leadership: The Board is ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Potential Issues * Enforceability: The absence of explicit statutory remedies for breach of the Charter raises questions about its legal status. Is it merely aspirational, or can it be invoked in judicial proceedings? * Content of the Charter: The statute does not prescribe minimum standards or core rights, leaving the content entirely to the Board. This could result in variability or dilution of taxpayer protections. * Review and Update Mechanisms: There is no statutory requirement for periodic review, stakeholder consultation, or public participation in the formulation or revision of the Charter. * Overlap with Other Provisions: The Charter must be harmonized with existing statutory rights and obligations under the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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