Encl.: as above.
Copy to (alongwith minutes of Interactive Session) :
(i) CTC, (ii) BCAS, (iii) FICCI, (iv) WIRC & (v) IMC
DCIT(HQ)(Vig.), Mumbai.
Minutes of the Interactive Session held on 30/10/2015 at 11.30 A.M. at the Conference Room, Aayakar Bhavan, Mumbai
An interactive session was held by the Income Tax Department, Mumbai in the Conference Room, Aayakar Bhavan, 3rd floor at 11 . 30 A.M. on 30.10.2015 as part of the endeavour to sensitize its officials to the need for lmproving quality of public service rendered and mitigating the potential areas of corruption during the Vigilance Awareness Week. The interactive session was chaired by Shri D. S. Saksena, Pr .CCIT, Mumbai. The following officers also participated in the Interactive Session:
2. The following members of Federation of Indian Chambers of Commerce and Industry (FICCI), Bombay Chartered Accountants ‘ Society (BCAS) , Indian Merchants’ Chamber (IMC) , Western India Regional Council of the Institute of Chartered Accountants of India (WIRC of ICAI) and Chamber of Tax Consultants (CTC) were present:
Federation of Indian Chambers of Commerce and Industry
• Mr. Deepak Mukhi, Head of FICCI – MSC
Bombay Chartered Accountants’ Society
• Mr. Raman Jokhakar, President, BCAS
• Mr. Ameet Patel, Co Chairman, Taxation Committee, BCAS
• Mr. Jagdish Punjabi, Convenor, Taxation Committee, BCAS
Indian Merchants’ Chamber
• Mr. Ketan Dalal, Chairman, Direct Tax Committee
• Mr. Gautam Nayak, Co-Chairman, Direct Tax Committee
• Mr. Sushil Lakhani, Member, Direct Tax Committee
Western India Regional Council of ICAI
• Mr. Shardul Shah, Regional Council Member
Chamber of Tax Consultants
• Mr. Avinash Lalwani, President
• Mr. Mahendra Sanghvi, Co-Chairman, Law & Representation Committee
• Mr. Krish Desai, Vice- Chairman, Law & Representation Committee
• Mr. Amrit Porwal- Convenor, Law & Representation Committee
• Ms. Nishta Pandya – Convenor, Law & Representation Committee
3. The Pr. CCIT(CCA) welcomed the participants and expressed his happiness on meeting the members from esteemed associations such as FICCI, BCAS, IMC, WIRC of ICAI and CTC. The Pr. CCIT remarked that each department has its own vigilance setup and in that process we have Addl. Director General (Vig.), West Zone. This is the formal structure in the department. The Pr. CCIT further informed that the refunds are being issued directly in the bank accounts of the assessee by CPC. However, we should have the system to safeguard the rights of the taxpayers to receive the refunds without coming numerous rounds to the income tax office. Therefore, the department wants to act positively and proactively by having interaction with the associations so that ideas can be shared and improvement in the systems and processes can be made.
4. Shri Deepak Mukhi of FICCI – MSC initiated the discussion by expressing his compliments for organising the meeting. He also thanked for circulating the minutes of the last years meetings and sorting out the grievances using the technology. He also suggested that whatever decision would be taken in deliberation should be followed up. Further, following issues/ suggestions were also made by FICCI –
(a) Proper monitoring and action by CCsIT is essential to ensure that Office Memorandum dated 7th November 2014 issued by CBDT regarding a non adversarial tax regime and other instructions are actually implemented at the ground level.
(b) There has to be adequate monitoring and supervision in relation to passing of assessment orders, so that the corruption possibilities could be significantly mitigated.
(c) In the assessment proceedings, Questionnaire should not be roving but shiould be ringfenced and specific. Also, the number of hearings should be restricted to a maximum of 5 hearing, which will compel tax officers to be specific and focused and will reduce the possibility to harass assesses. Further, notices for hearings must at least be delivered 20 days in advance and subsequent hearings should have minimum 3 weeks gap and each hearing not being more than 2-3 hours. In this regard internal guidelines may be issued.
(d) There have been a ‘large number of CBDT circulars, but several of them are not followed. In this regard internal guidelines may be issued. Issues such as non disposal of rectification orders, not giving effect to CIT(A) orders and non issue of appellate orders, for which CBDT has issued instructions, should be monitored strictly.
4.1 Shri Ameet Patel of BCAS appreciated the efforts made by the Department regarding issue of refunds, but added that the grievances relating to refund/ rectification are mainly due to the TDS-mismatch and lack of coordination between CPC and jurisdictional officer and that most of the problems are on account of nonmigration of PAN due to internal re-structuring of the Department. He also said that there was a lot of problems in giving the appeal effects in so many cases. Further, following suggestions were also made by BCAS –
(a) Wide publicity should be given to the Vigilance mechanism of the department. It is suggested that the same may be published in the journal of BCAS as well as having prominent notices within the premises of Income-tax offices at different places and not just at the main entrance, so that professionals as well as assesses are adequately aware of the vigilance mechanism of the department and they may approach the appropriate authority to redress their grievances.
(b) The process of rectifications, appeal effects, etc can be streamlined by giving acknowledgement numbers to applications and displaying on Notice Boards or on a website, the details of their disposal in timely manner. Likewise, the total number of assessments completed, demand raised and amount recovered, refunds issued, etc. in each Charge/Range may also be displayed or published on notice boards/ websites.
(c) Though corruption initiated by the officer gets often noticed and addressed through vigilance mechanism, the corruption initiated by an assessee does not get noticed. The officers should also be made aware of their duty to report such incidences for curbing corruption.
(d) In order to bring transparency in the process of delivery of notices to the assesses, the notices should also be sent in parallel by email.
(e) The Transfer & Posting policy needs to be adhered to by ensuring that officers with an adverse track record should not be posted in the charges having public contact and also no supervisory officer should be allowed to remain in one position beyond two years.
4.2 Shri Ketan Dalal of IMC made suggestion for issuing clarification/ guidelines regarding pre-assessment/ post-assessment proceeding like – directing AO’s not to issue142(1) mechanically but with application of mind and also to avoid passing high pitch assessment-order.
4.3 Shri Sushil Lakhani of IMC has conveyed that foreign companies have wrong perception about taxation departments in India and because of that they prefer to shift all the responsilities I liabilities pertaining to taxation matters to theirs Indian counterparts. Further, he also suggested that Income-tax Department of Mumbai, being major contributor to the exchequer, should show the way in this regard.
5. Shri B. K. Mishra, CCIT suggested that it is duty of the tax practitioners also to educate their clients and change their mindset to pay their legitimate taxes honestly in India, as lot of good things are happening in the Department which are not properly propagated.
5.1 Shri Abhay Charan Naik, CCIT suggested to provide specific case with PAN pertaining to Internationaltaxation regarding incidence of harassment, if any.
5.2 The Pr. CCIT informed the members present there about the vigilance set-up of the department. There is an established complaint handling mechanism in place in the Department in the form of vigilance set-up under Director General of Income-tax (Vigilance). The official website of the Department also provides detailed information about the vigilance set-up and complaint handling mechanism. He also informed about the display of notice boards in all the buildings of the department regarding the same.
6. Shri Raman Jokhakar of BCAS requested to put up the Charter of Demand on the website and also display at jurisdictional level.
6.1 Shri Shradul Shah of WIRC of ICAI suggested to call feedback from tax-payers and tax practitioners regarding functioning of the Department vis-a-vis assessments, refunds, rectifications and appeal effects etc.
6.2 Shri Ameet Patel of BCAS suggested to conduct awareness programme about the various initiatives taken by the Department for the benefit of the assesses in coordination with institutes/ associations like WIRC of ICAI/ BCAS/ IMC etc.
6.3. Shri Avinash Lalwani of CTC expressed that AOs are not properly maintaining the record of proceeding of assessment and suggested to maintain digital proceeding sheet. He also suggested that scanned copy of proceeding sheet should be uploaded in respective assessee’s account, to be accessible by the officers as well as assesses. Further, he pointed out that the ASK-Centres were not properly performing. Proper monitoring and reviews should be done by the Department in this regard. He also said that the certification of lowerI nil deduction of tax at source u/s 195 & 197 and disposal of rectification applications are not being done properly and that unnecessary and irrelevant information were asked for in this regard without first verifying the data available on the website of the Department. Regarding search and seizure proceedings, he said that the department insist the tax-payers to switch off the close circuit cameras while the proceeding were going on. He suggested that the CCTV should be remain on during the search action. He insisted that the department should video graphed the entire proceeding in order to ensure the transparency in the proceedings and avoid any sort of corruption. It was also suggested that due publicity should be given about the role of vigilance wing so that assesses are aware of such wing and approach the wing without fear.
7. The Pr. CCIT has informed the members to communicate such incidence, where malpractices are noticed, to the Department so the department could take necessary action against those officers/ officials.
7.1 Shri A. C. Naik CCIT-4 said that the Department is under the process of paperless office by using etechnology. There are lot of suggestions received in this respect which will be considered in on going project.
7.2 Shri Rakesh Mishra, Pr.CIT – 31, Mumbai has given the trail to take out light of E-Sehyog Project started on Pilot Project basis in the office of Pr. CIT 31, Mumbai. For that, he said that that notices from the Department would be sent to the assessee through mail and immediately after sending the mail, it would be deemed to be treated as served to the assessee. He suggested that the submissions made by the assessee through mail must be digitally signed so the evidentiary value & genuineness of the same can be ensured. He also suggested that the tax-payers and tax practitioners can meet higher authorities any time if they are having any genuine grievances with lower functionaries. He pointed out that every Wednesday forenoon has already been declared as a time for public meeting by the Central Government Department.
8. Shri Ketan Dalal of IMC – had said that the technology (E – SEHYOG) of Department by sending their e-mails etc should be implemented not only in assessment proceedings but in appellate proceedings also. He also insisted that the assessment, especially where substantial addition/ disallowances are made, should be finalized only after proper show-cause and after providing reasonable time to reply that show-cause.
8.1 Mr. Amrit Porwal of CTC has insisted that while proceeding with grievances, rectification applications, giving effect to the order of various appellate orders and issuing refunds, first the due procedure should be strictly followed in order to avoid any sort of corruption.
8.2 Shri Sushil Lakhani of IMC pointed out that proceeding under the section 148 initiated on the basis of information received from Sales Tax Department in the past two years has given wrong image to the Department because in such cases assessment has been completed mechanically and without application of mind.
9. Shri D. S. Saksena, Pr. CCIT, Mumbai said that the Department has no option but to initiate proceddings under Section 148, once such information is received, to verify the correctness of the information and assessments are being completed after doing proper verification from various agencies and documentary evidences brought on record.
9.1 Mr. Rakesh Mishra Pr. CIT- 31 provided his office email id and personal email id (Mumbai.cit31@incometax. gov.in & rakesh.mishra@incometax.gov.in respectvely) with a request to mail all the grievances/ suggestions etc related to his jurisdiction that is Goregaon and Jogeshwari. Accordingly the AO having jurisdiction over the case will look into the matter.
9.2 Shri S. S. Rana, Addl. Director General(Vig), West Zone informed that the grievances filed by the assessee or tax practitioners are dealt with by the Department in effective manner especially those which is filed through ASK or CPGRAMS. Problems arise with those grievances only which the assesssee file directly with AO’s. He suggested that the assessee and tax practitioners should file all the grievances through ASK or CPGRAMS only and also they should inform higher authorities from time to time regarding pendency of grievances. Regarding high pitch assessment, they should meet higher authorities or may seek direction u/s 144A from the range head the moment show – cause is issued to the assessee by the AO. He suggested that the tax practitioners as well as assessee should avoid to follow any grievance I obligation directly with the staff members and call the AO’s and instead of that it should be rooted through ASK. He also said that the tax practitioners should also follow the rules and explain true facts and legal position to the tax-payers instead of misguiding and frightening them.
9.3 The Pr. CCIT responded to the participants by informing the members present there that the guidelines have been laid down in the Charter of Demand to tackle all the issues within the time limit as prescribed therein. He pointed out that many of the complaints are anonymous or pseudonymous and there is general reluctance of complainants revealing their identity. Unless there is a specific information that can be acted upon, anonymous and pseudonymous complaints do not help in mitigating the menace of corruption. Issue regarding further publicity about the vigilance set-up and complaint handling mechanism would be considered.
He further informed the Members that necessary guidelines were already issued in respect of issuing questionnaire for scrutiny assessment cases. If the assessing officer issues questionnaire in routine manner, the same should be brought into the notice of higher authorities. In response to the dissatisfaction expressed by members of various CA Associations in respect of functioning of Aayakar Seva Kendra, the Pr. CCIT has stated that the Department will look Into the various aspects as suggested by members of CA Associations.
As regards the display of information or publicity in respect of additions made in income tax assessment, he remarked that secrecy of the assessee’s information is important and cannot be violated. Being policy matter and also for the sake of uniformity, issue relating to publicity of addition/ disallowances made while finalizing the assessment could be addressed by the CBDT only.
10. It was requested by the members of the Associations to send Minutes of the Meetings to all the associations so that common thread is maintained for future purpose.
11. The participants agreed on the need for greater co-ordination between the department and the professional bodies to improve the quality of tax administration and to help each other to ensure that the officers of the Department and the tax practitioners would work towards creating a transparent and vigilant environment. The group deliberated on the challenges and opportunities present before the Income Tax Department and agreed that the education of the tax payers on their rights and duties require immediate attention. The Pr.CCIT assured the group that they would continue to meet and discuss areas of concern and consider the suggestions made to ensure transparency and accountability. The interactive session was concluded on the positive note that the Department and all the stake holders would co-operate to ensure that the tax administration is fair and just.
