By Tarunkumar Singhal, Raman Jokhakar, Chartered Accountants
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The Gujarat High Court has issued notices to the chairman of the Central Board of Direct Taxes (CBDT) and Chief Commissioner of Income-tax Department in the state on a petition challenging CBDT’s decision to link promotions and postings of officers with tax collection made by them.
The notices were issued by a division bench of acting Chief Justice Bhaskar Bhattacharya and Justice J. B. Pardiwala while hearing a public interest litigation filed by Prakash Kapadia, chairman of an NGO, Jagega Gujarat Sangharsh Samiti.
The Court has sought an explanation about the circular that stated that promotions of the Incometax officers would depend on achievement of targets (of tax collection).
According to the petitioner, the practice of the Income-tax Department to set annual targets for tax collections and to give incentives to its staff for meeting those targets was hurting the taxpayers. The petitioner has challenged the instruction issued by CBDT chairman on February 7 to all chief commissioners and directors general of I-T to generate more collections.
The petitioner’s counsel, Rashmin Jani, cited three cases of assessees who have suffered at the hands of tax officers due to this policy. He argued that after issuance of such instructions, the officials have started sending demand notices and passed mala fide orders in order to achieve targets.
The petitioner has also contended that the promise of promotion and posting in plum positions may result in serious prejudice to assessees. He also cited an order by the Bombay High Court quashing similar instructions issued by the CBDT chairman earlier.
