Income Tax Department - the 2001 Cadre Restructuring - A fraud?
RESTRUCTURING of the Income-tax Department in 2001 was a wonderful episode. Much of the elite people were wondering, as to how the top officers of the Department succeeded in making a fool of the Political Masters and IAS Secretaries in getting their approval and sanction for the restructuring. In reality the restructuring was a one-point program of granting early promotions to all cadres of the Income-tax Dept. Some of them got two or three promotions in a sequence. The Department had assured the Cabinet that in three years the revenue collection would be increased by six folds. They gave a ready formula that after restructuring, they would recover all the pending arrear demand, which was almost equal to the one year's collection; and that they would brought all the non-filers, which were about 30% of total assesses, on record, which would further yield revenue of about equal to one year's, and further, by computerization and more skilled techniques of investigation and information collection, they would increase budget multifold. That was the time of downsizing of the Government staff in every department. Senior officers prepared chart of staff, after restructuring, in such a way that the number of CCITs increased from 35 to 116, the CITs increased more than double. At other side the cadre of Group D staff was almost abolished and Group C staff substantially reduced. The overall number/strength of the department was reduced, which pleased the political bosses. Just before the final orders of the restructuring, the Chairman, CBDT, A. Balasubramanian was required to sign an MOU, Memorandum of Understanding with the Govt., regarding fulfillment of the undertaking of increasing the budget collection many folds.
The Chairman was due to retire in next month on 31.07.2001. He knew well that he would be signing only a false MOU; therefore, he was reluctant to sign it. The pressure from field was mounting on him. The officers talked that the Chairman would retire next month, therefore no one would ask him for the collection after retirement. Therefore, he should immediately sign the MOU. Ultimately under pressure and realizing his non-accountability after retirement, he signed the MOU and opened the gates of restructuring for every employee of the Dept.
After restructuring, everyone got fast and premature promotions. The sense of responsibility eroded rapidly. Everyone was jubilant and no one was bothered about work and output. The worst ever effected was the position of maintenance of records. New Charges, Ranges and Wards were created, the old ones deleted or merged. The old records of assesses' did not reach the new offices. Most of the old records relating to assessment as well as general establishment was weeded out and disposed off without keeping any details.
The DCRs of arrear demand were got lost or the demands were not properly carried forward to new Wards. After restructuring audit studies were made to study the effect of restructuring on different areas of work. It was found that the average scrutiny disposal per Assessing Officer (AO) which was 82 in 1999-2000 was reduced to 38 in 2002-03 and 44 in 2003-04.
As promised at the time of restructuring, the saving in salaries of Rs. 3.05 crore was never achieved, rather it increased heavily. For recovery of arrear demand the number of Tax Recovery Officers was increased from 204 to 472 but there was no reduction of the arrear demand. The number of average monthly disposal of appeals per CIT (A) which was 43 in 1999-2000, was reduced to 28 in 2003-04. Interest on refunds was expected to be reduced by Rs.350crore per year with reduction in time taken in issue of refunds. Neither the amount of interest paid nor the delay in payment of refunds decreased, as promised in proposal for restructuring. The delay in issue of refunds became the biggest cause of public grievance. Proposed revenue collection of Rs.6000crore from more and speedy disposal of assessments also could not be achieved. Rather the average disposal of scrutiny assessments was reduced substantially.
Promised chain system of audit also did not work much and did not yield much result. After restructuring the role of the Jt./Addl. CITs was increased in the assessments. They were expected to monitor every case of assessment to be made by the AOs, so that by the involvement of senior officers the quality and productivity of scrutiny assessments could improve. But this scheme did not work. This became a scheme of money earning for most the Jt./Addl. CITs. In making assessments the signing authority was AO hence he was responsible for the assessment. On the other hand Jt./Addl. CITs being senior officers called every file along-with assessees and took heavy amounts from assessees and only thereafter issued verbal directions to the AOs. Ultimately, there was no quality improvement. On restructuring, by a single order of the CBDT on 23.6.2001, 375 Addl. CITs were promoted as CITs. On promotion the CITs were posted and transferred on new posts at different stations. First time in the history of Income-tax, most of the CITs joined their new assignments at new stations, telegraphically or by fax. From old stations and from the posts of Addl.CITs, they sent fax or telegrams at new station and assumed charge of CIT of new station.
At new stations they submitted their TA bills at the rates application to CITs. They got their pay fixed from the date when they assumed charge by fax, without physically joining at new station. This was not allowable under any Rule of the Govt. of India. The additional charge of a post can be assumed or taken by fax from old station but on promotion, as per rules one can join duty only on physically going at new station. All of them as Addl.CITs were not entitled for air journey, but as they joined as CIT at old stations and got their pay fixed from that very date, they assumed the entitlement of air journey and performed journey by air and submitted their TA bills claiming air fare and higher rate of TA/DA, that of the CIT. There were audit objections by the ZAO in many cases in the matter, but none of these officers refunded the excess claims made. Rather being CITs they directed and threatened their staff not to take any action on the ZAO objections. Ultimately, all objections got lost in the files. On promotion to higher post, the responsibility is increased but on restructuring morale and official responsibility got deteriorated.
In the last week of May, 2013 the Cabinet has approved new restructuring of the department. Let us hope that this restructuring would not create chaos as earlier but will cultivate a sense of honesty, dedication to duty, responsibility and public service.
This time around they have promised to collect an additional amount of Rs. 25,756 crores - not a rupee less!