Hon’ble Chief Justice of India
Supreme Court of India
Subject: Bureaucracy in India – A Real Hurdle for Development of Country
“Minimum government, maximum governance” – is it fact or fantasy?
Government has merged key ministries in an apparent attempt to bring in more synergy in governance and make decision making quicker and more efficient. But is it turned into the desired picture of improvement in position of common man and the business segment? The reality is far away from the above given maxim.
In last two to three years tax regime in India seems to be going towards the bureaucracy led chaos. On one hand, country is facing the slow growth rate and on other hand, each year some tax proposals are put which badly affect the business environment. Ministers are not having enough expertise and/or time to go through the chaotic tax proposals drafted by the bureaucrats.
Powers given to the CBDT and CBEC seem to be used senselessly and in the unlimited manner. This affects the desire of common man in very adverse manner to pay the taxes and to obey the tax regime.
Like other common men, I also want to see my country growing by leaps and bounds. Following are some recent facts which I want to bring to your kind attention with remedies to cure these defects.
1. Under Income Tax Act, 1961, there is a provision to get the accounts audited for certain persons in the prescribed formats.
2. Powers to prescribe the formats of such audit reports as well as to prescribe the formats of Income Tax Returns are delegated to the Central Board of Direct Taxes.
3. Under relevant sections of Income Tax Act, 1961, due dates of return filing are 31st July and 30th September immediately following the end of relevant financial year (i.e. 31st March) for non-audited and audited cases respectively.
4. From the above point, any person of sound mind can observe that intention of legislature is to give time of 4 months and 6 months in non-audited and audited cases respectively.
5. But CBDT issues the notification at any desired date without looking into the genuine hardship caused to the common men as well as business community. This year also, suddenly on 25/07/2014, CBDT issued a notification prescribing an altogether new format of audit report. And issued a schema (in simple terms, it is format for e-filing) in August, 2014. This has resulted into the curtailment of audit report filing time in indirect terms by nearly more than 4 months.
6. When lakhs of business people and tax partitions across the country have opened the eyes of CBDT, on 20/08/2014, CBDT extended the date of filing audit report by 2 months without making the consequent change of extension of date of return filing. This is again the unlimited and senseless use of the delegated legislation by bureaucrats, as the intention of legislature can obvious be interpreted by reading of Section 44AB which is directly linked with the Section 139(1), so date of filing audit report can not be legally extended without extending the date of return filing.
7. In writ petition hearings, government pleads about the loss of revenue due to extension of return filing due date. But shouldn’t we plead that such losses to government must be made good by imposing personal penalties and selling the personal properties of such unthoughtful bureaucrats (Board Members)? What these persons do between 1st October to 31st March?
My suggestions to stop such unfair practices by Board Members.
1. Any change in audit reports or income tax returns must be brought only after discussion of the same with committee representing business community at India level, Hon’ble C & AG of India and Central Council of Institute of Chartered Accountants of India.
2. Income Tax return formats, audit report formats and such other forms (including e-filing schemas) must be notified in month of March each year.
3. Section 119 and Section 295 of Income Tax Act, 1961 must be amended in the manner that - "Changes made in audit report forms and ITRs will take effect only from the next assessment year in which such changes are made."
Hope you will take this matter in its real spirit and will help to stop the tax legislation (especially delegated legislation) to go into the wrong direction.
Citizen of Independent India
CA. Tejas Andharia
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