‘Know your judge before you know law’ it sounds very simple.
Obviously, it has direct relevance to legal proceedings. It deals with the
mindset of the person in the chair of judge. My friend Herambha Shastri once
elaborated this adage when we were deliberating an income-tax case. Let me share
with you Herambha’s interesting musings over this issue.
‘First we should make an ‘amendment’ to this maxim for the
purpose of proceedings under the income tax law as ‘Know your Assessing Officer
before you know Income-tax law’. You know the facts. You know the law. You know
the case law. But alas! If you don’t know the AO, then you suffer.
How do you know the AO? For that matter first you should
imagine and be in the AO’s shoes. Given the discretionary powers under the
Income Tax Act, think how you can exercise those powers ‘irrationally and
illogically’. It is said that ‘facts come first and law comes next’. But mind
you, under the income-tax proceedings the discretionary powers of the AO come
first, facts come next and then the law follows (if at all, by the time you
reach the Appellate stage).
Never show that you know the income-tax law more than the AO,
since there is ‘a deeming fiction’, though unwritten, that the AO is always
well-versed with the law he implements. His knowledge about case laws is
state-of-the-art as if he has delivered all those judgments. So please don’t
flaunt your knowledge of law and the case law. This is all about what you should
have in mind before you enter the AO’s office.
The moment you knock the door to enter the cabin be careful
about observing the protocol established in the British era (say, ‘May I come in
Sir, I am so sorry to bother you’ etc. ). A slight mistake may vitiate the
atmosphere and hence the proceedings even before they begin.
Having entered the cabin, don’t occupy the chair till the AO
asks you to sit. Normally, he lets you in but will not attend to you till you
feel awkward and uneasy. You keep looking around aimlessly. What you find is a
medium-size dusty framed photograph of Mahatma Gandhi on the wall, then a
calendar, obviously given by one of the taxpayers (maybe wanting to impress the
AO), a shelf stacked with files and papers full of dust, a steel cupboard with
topped with bundles of some more files in red cloth, a ceiling fan rattling over
the head of the AO along with humming of the air-conditioner and old books on
Income-tax Act and Rules, and ready reckoners which appears never to have been
touched.
Give the AO sufficient time to complete his conversation on
the phone if he happens to be on the line with the higher-ups or some friend.
Don’t stretch your hand for a shake-hand for your introduction. Unfortunately,
this British cutom is somewhat despised in the Income-tax Department. I don’t
know why? When the AO finishes his conversation or his work on hand, he will
stare at you and wave at you with his hand indicating you to sit (as if he is
very considerate to you). When you settle in the chair, don’t bother to
introduce yourself, that is of no consequence till it is time to sign the order
sheet. Only indicate the assessee’s name.
The AO would then become active and start the search for the
file on the ‘hit list’. Normally, he finds it instantly in that mess if he wants
to. I wonder how? But unfortunately he can never locate the copy of the notice
sent by him. His assistant also fails in that pursuit. This is the first
opportunity to begin co-operating with the Department, don’t lose it, so take
out the copy of the notice from your file and hand it over to the AO but be
placid. The AO would just chuckle.
Consider the AO as a dormant volcano. Sometimes he would
place in your hand a printed questionnaire or dictate questions orally depending
upon the stakes (obviously government’s stake) involved in and his homework of
the case. Normally, he starts his ‘homework’ after your submissions. Thereafter,
you start feeling the ‘heat’ of his discretionary powers till your position
becomes vulnerable and non-negotiable. You become paranoid about what would be
the AO’s perspective. If the AO is a direct recruit he will be more stern,
studious and innovative about the compliance of tax laws. If he is promoted as
an AO from within the Department he will be more concerned about procedural
matters. If he is on the verge of retirement he will be lenient and
understanding, compared to a younger AO. A lady AO will, probably, be more
professional.
Here my friend Herambha stopped his elaboration. But he made
a very subtle remark, ‘Keep in mind, there is no penalty for ‘concealment of
satisfaction’ by the AO under the income-tax law’. May be CPE programmes should
have a course in psychology as well.
