Dear Members,
Battle with Covid-19 is on – Please do not miss to take utmost care –
Although we all are looking forward to being active again as opening ups are being announced by individual State Governments, I am afraid we can’t afford to reduce the precautions which we must continue to follow strictly.
I say so because it deeply saddens me to inform my dear members that an active secretary of South Zone Adv Shri M. A. Prakash succumbed to the Covid-19 on 23rd August 2020. One of the most active secretary of the Zone, whom many of you may have seen during the South Zone programmes.
I am informed there are two or three more members of our Association who have left us for heavenly abode fighting Covid-19 battle. I am extremely sorry to inform that Mrs Pratima, wife of our regular column writer and Associate editor Shri C. B. Thakkar (Bombay) left for heavenly abode after fighting the battle against Covid-19, for more than one and half month on 18th August 2020.
We pray Almighty to bestow eternal peace to the departed souls. Our deepest condolences to near and dear ones. We pray God to give their families strength to bear this irreparable loss.
It is therefore extremely important for each of us, not for our own self but also for our near and dear ones that we continue to strictly follow the Government guidelines of wearing three ply face mask, washing hands frequently, maintaining 6 feet distance (Even when you meet your friends) and avoiding public crowded places.
The hearings with any authority including appellate authorities can now be held through virtual mode. We will have to accept virtual mode of hearing as a way of life for many more months to come.
The concept of Mutuality & Federation –
The Editorial of this month is written by our Past President Shri M. V. K. Moorthy who has in a lucid language explained the application of the recent Larger Bench decision of Supreme Court in case of Calcutta Club to the Federation. The Committee is appointed to look into this aspect and we would shortly be making detailed representation to the Finance Minister & GST Council to clarify the stand of the Government in this aspect. We may have to challenge the provisions before High Court if the situation so demands.
Faceless Assessment – a new step forward
Recently the Hon’ble Prime Minister Shri Narendra Modi launched a platform for transparent taxation system and theme of honouring the honest.
The faceless assessment, faceless appeal and taxpayer charter are announced as a way forward. The hon’ble Prime Minister also announced that there would be no intrusive and survey action by the field officer. Only investigation wing and TDS wing can carry on the investigation, that too, after approval by the officer of the level of Chief Commissioner or above. The selection would be through the system.
Implementation of this system would mean abolition of territorial jurisdiction. There will be no physical interface with the jurisdiction officer. Gone would be the days of frequent visits to the Income Tax Office. A very welcome step. However, the Income Tax Department will have to ensure that the proceedings are not abruptly closed for want of time and the assessees are given more than one E-hearing if the situation so demand. The original system of target based assessment and applauding the officer who created heavy demand (especially the demands which cannot stand the test of law) should be stopped immediately.
We, as taxpayers and the tax consultants, are fully aware of the paper demand raised by some of the officers only to meet the target. The entire system formulated by this announcement appears to be very attractive. Especially the tax payers charter has specifically declared the commitment by the Income Tax Depart to the public at large, especially tax payers. They are directed to be fair, courteous and give reasonable treatment and professional assistance in all dealings to the tax payers. The tax payers are presumed to be honest unless there is reason to believe otherwise. For the first time, the Department is directed not to disclose any information provided by the taxpayer unless authorized by law and the officials are going to be held accountable for their action in implementing the citizen charter.
While the commitment to the taxpayers is declared, the charter also specify what is expected from the taxpayer. The taxpayer is expected to be honest and complied. The most important expectation is that taxpayers should know what information and submission are made by his authorized representative. The taxpayer is also expected to be aware of his compliance obligation under the tax law and seek the help of the Department if needed apart from making regular tax payment and maintaining accurate record.
Both faceless assessment and faceless appeal look attractive; however, as pointed out earlier, neither side should take advantage of the system. What is required is the change of mindset on both sides and an honest attempt by both sides, i.e., the authorities and the taxpayers, to implement and put in practice the system announced by the Prime Minister.
This is the first taxpayer charter conceptualized by the taxpayer-friendly Government. However, in past we had citizen charter which remained a decorative piece in paper. The benevolent scheme and the system announced by the Government are at times made complicated by inserting numerous rules and formalities. Let’s hope we do not see the same fate of the scheme this time.
In my personal opinion, the power of the officer passing hurried order at the fag end of the time- barring period should also be kept under rein. Such officers should be treated as erring officers. The power of rectification has remained untouchable for majority of the matters on account of the phrase “mistake apparent on record”. This phrase and the power of rectification have been viewed and interpreted differently by different Courts under different circumstances. In my opinion, a liberal approach is required so that just and fair treatment is meted out to the taxpayers. Many a times the submissions made on record are either considered or summarily dismissed by the concerned authorities without any reason. The order without reason should also be subjected to the scope of rectification if the material, documents, evidence are already on record without detailed arguments. Non-consideration of the material on record should invite investigation of the officer. It is only when stern actions are taken against erring officers and dishonest taxpayers then the real object of the present scheme would be implemented.
The department has been honouring the honest taxpayers; however, the medium level and smaller taxpayers who are honest and paying regularly the tax liability, in my opinion, deserve to be appreciated.
The show cause notices issued so far at times had no base, nor they could prima facie stand the test of law, nonetheless the taxpayer has to go through rigmarole of filing appeal, second appeal etc. The Courts normally refuse to entertain writs at this juncture. This is creating a bad image and undue harassment to the genuine taxpayer.
I sincerely hope we see a golden era where the taxpayer community increases many fold and the administrator behave in just, fair professional manner.
While the taxpayer charter has taken care of the honest citizen, a very important suggestion, I would like to make is to give the social security pension to the taxpayer above 65 years of age, based on the amount of tax they have paid over years and may continue to pay. It would be a noble feature where the taxpayer would have greater incentive to pay due tax during their young age itself as they are assured of some return out of the said tax paid throughout their peak of their earning, in their old age. This would ensure due compliance by all citizens who are covered by the tax bracket.
Representation for Indirect Taxation
The Indirect Tax Representation Committee headed by Shri H L Madan is preparing a pre-budget memorandum to be submitted to the Hon’ble Finance Minister and GST Council. I request all the members to give their valuable suggestions and inputs my e mail to our Head Office so that we can make a meaningful representation.
Activities of the Federation
This would be perhaps the last month when we would be sending the e-journal to the subscribers. On account of lockdown and partial opening up, the Post Office which has been taking delivery of our journal has not been able to accept our journal for delivery. We hope in the month of September we would be able to deliver the hard copy of the journal. Meanwhile, may I request the members who have not paid the subscription so far, to renew their subscription at the earliest. I also invite the new members to subscribe for the journal as the journal gives them opportunity to keep themselves updated on Direct and Indirect Taxes as also to read the articles of the members from all over India. This would obviously widen the horizon and the views of the tax consultants of different parts of the country can be appreciated and applied by a member.
Meanwhile, the Federation continues to hold free Webinars in the interest of the members. I am happy to inform that we would be soon crossing a century of webinars which have provided us the opportunity to make the presence of the Federation felt by the tax consultants in the remotest rural area of the Country. The zones have been able to reach to more than 500 members at a time, normally, to achieve our moto of spreading knowledge and education.
I must congratulate the Central Zone, Chairman Shri Vinay Jolly and his team, Vice President Shri Rajesh Mehta and ever enthusiastic senior member Shri Pankaj Ghiya to have maximum webinars with maximum participation. They have completed the certificate course of GST. The North Zone is going to start the certificate course on GST on 25th August 2020.
The West Zone Chairman Shri Bhaskar Patel has announced a two-day National Conference, with free registration to all the members. I request all the members to join for a unique experience as for the first time ever the Principal Chief Commissioner of Income Tax NeAC, Dr. Pushpinder Puniha and the Joint Secretary, Government of India, Shri Kamlesh C. Varshney have agreed to be part of the active panellists for a session on ‘Faceless Assessment’’ charting a road map for a painless tax regime and seamless tax regime and compliance” along with renowned international tax expert Shri Mukesh Patel and our past president Sr. Adv. Shri Ganesh Purohit. The other subjects are also of prime importance for day-to-day practice of Direct and Indirect Tax.
The North zone under the able leadership of Shri Asim Zafar is planning a two day NTC on 2nd and 3rd October 2020. The Central zone is planning a two-day National Tax Conference on 31st October and 1st November 2020.
Dear Members, kindly continue to attend all our programs to enrich your knowledge. Let me appreciate that the inputs and the queries raised by the participants also help in enhancing and enriching the deliveries by the faculties. In my opinion, active participation by the delegates is the most important aspect for success of any programme. For all our future programmes kindly visit our website www.afiftponline.org.
Stay safe, stay Blessed.
Nikita R. Badheka
National President, AIFTP