Editorial
The Income Tax Department does not seem to believe in the
proverb ‘Act in haste, repent at leisure’. All its recent actions show that it
believes in introducing new procedures in a hurry without creating the necessary
infrastructure for it, without learning from its past mistakes, and without
regard to the enormous difficulties to taxpayers. It believes that keeping quiet
about the problems caused by premature introduction of such initiatives can
enable it to claim its initiatives to have been a success — forget about
taxpayers who suffer the brunt of such problems !
The new PAN numbers were introduced without the necessary
infrastructure in place, resulting in non-allotment of PAN, mismatched PAN cards
and allotment of multiple PAN numbers.
When e-filing of TDS returns was introduced, along with the
Tax Information Network (TIN), we were informed that all data relating to TDS
and payment of taxes would be captured by the system, doing away with the need
for issue of physical TDS certificates and the need for filing challans along
with the returns of income. The reality, as many taxpayers have found to their
dismay, is that the TIN displays only a part of the tax deducted at source from
their receipts, and that correction of data captured by TIN is an extremely
difficult task. To top it all, their legitimate refunds are held up on account
of such system problems, due to the CBDT insisting that credit for TDS should be
granted only on the basis of the TIN figures, and not on the basis of physical
TDS certificates, as provided by law. Many taxpayers were slapped with huge
demands, instead of the large refunds due to them. A few taxpayers were
fortunate to receive their refunds after approaching the Ombudsman (one such
order is reproduced on page 163).
With e-filing of returns, we were told that this would speed
up the processing of returns and issue of refunds. The reality we find is that
the processing of returns filed for assessment year 2007-08 has barely begun,
though by now, the processing of such returns should have been completed.
We now have a situation where taxpayers who want to file
their TDS returns are told that such returns will not be accepted unless the
returns contain a minimum percentage of PANs of deductees. No groundwork has
been done to ensure that all deductees necessarily obtain and furnish their PANs,
no provisions have been made to enable deductors to force deductees to obtain
and furnish PANs, and yet deductors are prevented from complying with their
statutory obligations ! All this, merely by issue of a press release ! To top it
all, it is highly likely that penalties would be levied on such deductors who
are unable to file their TDS returns for no fault of their own.
As if this were not enough, we now have mandatory e-payment
of taxes for certain categories of taxpayers from 1st April 2008, for corporates,
and individuals and partnership firms who were liable to tax audit in the
earlier year. Banks are still unprepared for such large e-payments. It takes at
least 20 days to activate this e-payment facility with most of the banks. Many
banks refuse to open an account if such account is merely intended to be used
for e-payment of taxes. This would in effect force taxpayers to change their
longstanding bankers, though they may be fully satisfied with their services.
One individual taxpayer, who pays advance tax of about Rs.50
lakhs in each instalment, and who approached one of the nationalised banks which
is authorised for such e-payments, was flabbergasted to discover that the bank
would accept e-payment of a maximum amount of Rs 5 lakhs in a day. He is still
trying to figure out how he can make his advance tax payments !
The Society has made a representation regarding the
difficulties being faced by taxpayers in complying with e-payment at such short
notice (reproduced on page 245), but does the Income Tax Department ever heed
any advice or take into account the difficulties of taxpayers? In this
consumer-centric age, should not the voice of taxpayers be heard and respected
by the Income Tax Department, which depends upon taxpayers for all its
revenues ?
One thought that payment of taxes and filing of tax returns
were sacrosanct duties of taxpayers. It however appears that the Income Tax
Department, which is resorting to such initiatives to conceal its own internal
deficiencies and problems, is putting hurdles in the way of taxpayers who wish
to comply with their obligations. A strange situation indeed !
Let us hope that the Income Tax Department realises the need to consult
taxpayers and their representatives, take into account the various difficulties
being faced, provide the necessary infrastructure and enabling legislation, and
then undertake new initiatives. This alone will lead to real success of such
initiatives !
Gautam Nayak
