Many of you will now be gearing up for the busy month ahead.
This year the due date for filing of corporate returns and the returns of those
assessees who are liable to tax audit has been advanced by one month. Whatever
the reason, it will leave us free to enjoy the festival of lights, though we may
have to work a little harder. One often marvels at the effort that chartered
accountants make to ensure that their clients comply with the law, while clients
themselves are in total bliss having delegated this job to the hapless
professional. We need to educate clients that while it is our duty to aid and
assist them to comply with the law, it is primarily their responsibility.
Recently the media was filled with reports of the legal
battle waged by a young couple. The lady was pregnant with a child which had
been diagnosed with a serious health problem and had few chances of leading a
normal life if born into this world. The time up to which medical termination of
pregnancy was possible had passed and the lady sought the Court’s permission to
do so. The case has many nuances which have already been discussed threadbare. I
would only salute the young lady and her husband for the respect they showed for
the law. While the order of the Court was not what she wanted, it brought to the
fore the inadequacies and limitations of the law, which will hopefully be
addressed in the future.
While on adherence to laws, many of us seem to employ double
standards. We expect others to comply with rules and regulations, while we flout
them with impunity. It is this duplicity which creates confusion, particularly
in young impressionable minds. I am reminded of an incident which occurred just
two days ago. I was driving my daughter to school early in the morning. The
signals had just started operating. I waited at the red signal, and the man
behind me started honking. I showed him the red signal. He overtook and broke
the signal, berating me on the way. I was saddened by his behaviour more due to
the fact that seated next to him was his young son, studying in the same school
as my daughter’s. The school would have taught him to wait at a red signal,
while his father not only broke the signal, but was critical of someone who was
abiding by the rules. This behaviour would obviously leave the child confused.
Such confusion may have tragic consequences in future.
Why do people break laws ? Personal and immediate gain is one
of the obvious reasons. The second is when people find that continuous violation
leads to no retribution. The third is when laws are so complex and ill conceived
that it is almost impossible to comply with them or the cost of compliance is so
high that a person is almost forced to flout them. The fourth is when the law is
totally out of sync from the ground realities or has become archaic with the
passage of time. It is the problems/issues that arise in the third and fourth
category that the government has to address at the earliest.
Finally there is an issue of the efficiency of the justice
delivery system, and the attitude of the administration. One often finds that
improving the judiciary is not on the priority list of politicians. This is
possibly because bringing about a change in the system is a painfully slow
process and it is difficult to show tangible progress in a short time. A lot of
time of the bureaucracy and the legislature is wasted in drafting laws and
enacting them, when in fact, it would be better to concentrate on ironing out
the problems in existing laws and trying to ensure that they are administered
more efficiently. The government must allocate far greater resources for
ensuring a better quality of presiding officers, better equipment in courts, and
increasing the use of information technology as a tool. Habitual litigants must
be dissuaded from clogging courts while genuine public interest litigation needs
to come to the fore.
What is true of general law is equally true of revenue
statutes. A new direct tax code is to be introduced. A similar exercise was
undertaken a decade ago, and the result is well known. Instead of embarking on
such projects it may be worthwhile to iron out the problems in existing
regulations. To illustrate, it took the government close to a year to realise
the hardship that tax deductors were facing in trying to comply with the
mandatory PAN percentage for filing TDS returns. I am conscious that such
problems will always arise, but they could have been solved earlier if the
administration had shown the right approach and attitude.
We are in a profession where we advise clients on compliance
with commercial and tax laws. In both, the dividing line between avoidance and
evasion is thin. Every professional needs to be clear about what his role is and
apprise the client about the same. This responsibility and role definition is
extremely important and needs to be well documented. Many of us are weak in this
area and should take remedial measures.
I will stop here and leave you to the arduous task of
completing your tax audits. As good professionals, we must encourage our clients
to comply with laws, and agitate for their rights before judicial forums. Out of
all the pillars of democracy it is this one which despite suffering some damage,
is serving as a lighthouse among otherwise murky and muddy waters !
With warm regards,
