TIOL-DDT 191 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 191</font><br> 31 08 2005<br> Wednesday</b></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Income Tax Department cannot serve notice on respondents – loses case</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Revenue has a theory – always file an appeal against all unfavorable orders. But the appeal need not always be pursued. Your job is over once the appeal is filed and what happens at the appellate stage is not your concern. <br> <br> The Bombay High Court had recently faced the shocking apathy of the Income Tax department.<br> <br> Against an assessment order pertaining to the year 1981-82, the Commissioner of Income Tax took the matter in reference to the High Court in the year 1998. For the past seven years the High Court had been consistently insisting on a very difficult job by the Commissioner – serve notice on the other party. The High Court found it unfair to proceed without the respondent being put on notice and all the great infrastructure of the department could not provide this simple legal requirement. After more than half a dozen adjournments, the department could not even explain why they could not serve notice on the respondents.<br> <br> Finally the High Court was constrained to return the reference un-answered. Considering the <b>inaction, reluctance, negligence and attitude</b> on the part of the Revenue not to comply with the orders of the court and to avoid to effect service of the reference proceedings on the respondent, the High Court returned the reference without an answer.<br> <br> The High Court considered the non-cooperative and defiant attitude adopted by the department in sending a notice to the respondent. The Department could not even post one notice to the respondent by RPAD. <br> <br> What is so great about serving a notice and why was the department so disobedient and so callous in not being able to serve a notice as directed by the High Court? <br> <br> Just like you, the High Court also wanted to find out. So the Court asked the counsel for Revenue. The poor counsel did not really know why the department could not post a letter. So the officers of the Law Ministry posted in Mumbai and the Commissioner of Income Tax were asked the reason. And they, noted the High Court, did nothing except blaming each other and higher ups. The High Court was surprised that the Revenue itself is not interested in protecting interest of the Revenue.<br> <br> Incidentally in this case, the Supreme Court’s decision is in favour of Revenue. Income Tax could have won the case if they had spent twenty rupees in sending a registered letter to the respondent. The High Court was conscious of the fact that returning the reference will cause tremendous revenue loss to the Revenue but the court could not do anything more than sending a copy of the order to the Principal Secretary, Ministry of Law & Justice, Central Secretariat, New Delhi, with a copy to Shri Berjinder Singh, Chairman Central Board of Direct Taxes so as to bring to their notice the manner in which their department at Bombay is functioning. The Commissioner could not send a notice to the respondent but he furnished the address of his Chairman to the High Court. <br> <br> The High Court also awarded costs of Rs. 5000/-. <br> <br> Maybe Revenue is too serious an affair to be left to Revenue officers. If you think this is an isolated and rare incident, we could get at least three identical cases from the Bombay High Court.<br> <br> 1. The Commissioner of Income Tax v M/s. Prrotos Engineering Co.P.Ltd. (<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2005/2005-TIOL-124-HC-MUM-IT.htm"><font size="1" face="Verdana, Arial, Helvetica, sans-serif">2005-TIOL-124-HC-MUM-IT</font></a>)<br> <br> 2. The Commissioner of Income Tax v M/s. Atlanta Constructions (<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2005/2005-TIOL-125-HC-MUM-IT.htm"><font size="1" face="Verdana, Arial, Helvetica, sans-serif">2005-TIOL-125-HC-MUM-IT</font></a>)<br> <br> 3. The Commissioner of Income Tax v Shri K.H. Mehta (<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2005/2005-TIOL-123-HC-MUM-IT.htm"><font size="1" face="Verdana, Arial, Helvetica, sans-serif">2005-TIOL-123-HC-MUM-IT</font></a>)</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Be nice to the genuine assessees but be strict with the evaders : FM tells Chief Commissioners</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM inaugurating the two-day conference of Chief Commissioners and DGs of CBEC stressed that steps need to be taken to improve Central Excise collections. Excise collections are far below expectations. We all have very bad opinions about the industrial climate in states like West Bengal, Bihar (Jharkand included) and UP, but strangely Ranchi, Kolkotta and Lucknow zones have collected higher revenue than their moving targets which means our prejudices are not really true. <br> <br> For two days, the Chief Commissioners will discuss important issues like computerisation, business process re-engineering, Large Taxpayer Units, working of Help Centres for small scale units and implementation of the Right to Information Act and produce tons of paper and immediately after the conference, Board will ask for several reports producing more paper. Will all this bring in more revenue? Several suggestions will be made and monthly reports sought on the various Action Plans till the end of the year and finally accounts will be manipulated at the end of the year and the Finance Minister will be told that targets have been reached. Only he will not find the money in the coffers but he can look for it in the voluminous reports and explanations. <br> <br> If the FM is serious about Revenue collections, he should ask all the CCs to stay back in Delhi for the next seven months and discuss on all issues they want to discuss and direct that they do not use paper. You will have better results if you also organise regional conclave of Commissioners and they should be also conferencing for the next seven months. We know of at least one Commissionerate where there had been no Commissioner for the last six years and the Revenue is steadily progressing! Mr. FM, Commissioners and CCs don’t bring in Revenue. It comes not because of them but in spite of them. <br> <br> For a change, the FM should ask all the Chief Commissioners and Commissioners to forget all about revenue and do things which they can – for example adjudication. Fix a target that all cases registered before 1.9.2005 will have to be adjudicated before 31.3.2006; fix a target that all audit objections are closed within six months. Fix a target that all useless records and furniture in the offices are destroyed and sold; fix a target that every officer shall send an e mail to his immediate boss every day and that the boss shall send a reply e mail; fix a target that all seized records are returned with a personal apology from the Commissioner if no Show Cause Notice is issued within six months. And Mr. FM the Revenue will come by itself without the effort of your officers. All their efforts will not produce a rupee more or all their negligence will not produce a rupee less. It’s time we call the bluff of manipulating revenue collections. For one year you accept the actual collections without threatening your Chief Commissioners and the future is safe. <br> <br> <font color="#FF6666"><b>Until tomorrow with more DDT<br> <br> Have a nice day. <br> <br> Mail your comments to</b></font> <a href="vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p> </body> </html>