Finance Bill, 2015 – Sincere attempt of the Hon’ble Finance Minister to present a growth oriented budget – Deserves appreciation – Notwithstanding, why is the Government hesitant to bring in accountability provision in tax laws?

In the NDA Government’s first full year budget, we highly appreciate the sincere attempt of the Hon’ble Finance Minister to present a budget which is both forward looking and growth oriented. We are also pleased to acknowledge that some of the recommendations of the Federation have been accepted by him. Important suggestions of ours which have been accepted are:

(1) S. 158AA – Procedure for appeal by revenue when an identical question of law is pending before Supreme Court.

(2) S. 253(1) – Orders passed by prescribed authority refusing to grant approval under sections 10(23C)(vi) and (via) being made appealable before the Tribunal.

(3) S. 253(3) – Single member of the Tribunal to dispose of cases where total income as computed by Assessing Officer does not exceed
Rs. 15 lakhs.

(4) Working towards achieving more certainty in tax law.

(5) Scrapping the proposal to enact the Direct Tax Code.

(6) Mandatory routing of advances of
Rs. 20,000/- or above through banking channels and prescribing quoting of PAN compulsory for transactions exceeding
Rs. 1 lakh.

(7) Adhering to the commitment of dispensing with retrospective amendments to the income tax law.

The Federation also welcomes the following provisions:

(a) Abolition of Wealth-tax, though late

(b) Measures to curb black money

(c) Various incentives to promote investments

(d) Postponement of General Anti–Avoidance Rule

(e) Proposal to set up exclusive commercial divisions in various courts in India.

At the same time, the Federation apprehends that the following amendments may lead to increased litigation:

(1) S. 263 – Revision of order without making enquiry or verification, in respect of order passed, allowing relief not in accordance with the Board or decision of court.

(2) S. 271(1) – Explanation 4: Tax sought to be evaded for purpose of levy of penalty for concealment of income under section 271(1)(iii), where concealment of income or furnishing inaccurate particulars of income occurs in computation of income under section 115JB, or 115JC.

In this issue, the learned authors have contributed articles on some of the important amendments proposed
vide Finance Bill, 2015, which may be useful to the readers and administration to understand the provisions.

Amendments to the fiscal laws each year is a regular feature. But, the Federation is of the opinion that whatever may be the law, unless the provision of accountability is introduced in the Act, honest tax payers will have to suffer at the sweet mercy of few adventurous tax officials, and, therefore, it is essential for the law makers as well as the Federation to focus the attention on this vital issue till such time the success is achieved in this behalf.

“The Law is good, if a
man use it lawfully” – 1 Timothy, 1:8

Recently, an assessee brought to our notice that the returned income was loss of
Rs. 2 crores, and the Assessing Officer, for reasons best known to him converted the loss into profit and assessed at
Rs. 4 crores by treating entire cost of purchase of machinery as income, sister concern’s sales added as the income of assessee.

One has to imagine the harassment meted out to the assessee by such unlawful actions of the Assessing Officer. This is mainly because albeit the entire addition is deleted by higher authorities, no question will be asked of the Assessing Officer concerned for making such illegal additions. So both gets escaped from the scrutiny on the ground that they being public servants their actions are honestly done. Therefore, it is high time, all concerned with this deeply rooted malady, must ponder over it and seek remedy in the matter. One will find a number of High Court judgments warning tax officials to follow the due process of law while rejecting stay applications, notwithstanding that the Apex Court as well as High Courts has prescribed guidelines on this issue. Sadly, some tax officials do not show any respect to the judgment of the higher courts and nothing happens to them. In such a disgusting scenario, we earnestly appeal to the Government to take drastic steps to bring accountability in tax administration and advise tax officials to follow the culture of tax service.

Dr. K. Shivaram
Editor-in-Chief