I had an Income Tax case running for one of my businesses from FY 2006-07 until it ended in FY2016-17. For a decade, the case wound its way through the department (Officer, Commissioner, Appellate, Tribunal and so on), at every level it got awarded in our favour.
Luckily, the department didn’t approach the courts (Madras High Court and then the Supreme Court) – had they done that, it would’ve been another decade or two.
Having gone through the ordeal and the consultations I had over the years with auditors and tax lawyers, I get to understand Indian Tax Laws are archaic, ambiguous and a magnet for litigations. No officer wants to take the decision, for fear of being accused corrupt. Any decision that can be remotely seen to be tax-payer friendly is “BAD” for our (direct and indirect) tax authorities – what a pity! On the contrary, many other countries around the world going out of their way and even advertising to be tax-payer friendly.
This new initiative (Taxpayer’s Charter) by the Hon’ble PM is long pending, I welcome it cautiously. The sound bites are good, but will it meet its goals? I have my doubts as the existing system has been entrenched for more than a century with the tax departments of Government of India.
//The Faceless Assessment Scheme aims to eliminate the human interface between the taxpayer and the income tax department: Selection of a tax payer only through a computer system, Abolition of territorial jurisdiction which means a tax payer may belong to one city but the ITR may be assessed in some other city through random selection by computer, No physical interface and no need to visit the Income Tax Office, Team based assessments and team based review//
If there comes a real change in the mindset of our bureaucracy on the ground and our lawmakers, it will be a real boon to the Indian economy especially to the small businesses who require all the help they can get to in these pandemic times.
Reference: The Register, UK says India rolls out AI and e-government to increase taxpayer numbers beyond current miserable 15 million: ‘Honoring the honest’ is the catchphrase for massive new online scheme