In a clear signal to both taxmen and taxpayers that the new government was serious about providing a non-adversarial tax regime promised in the budget, the CBDT on Friday asked officials to show restraint while making "high-pitched assessments," and urged them to file appeal on merit. In a separate statement the indirect tax body CBEC asked field formations to " promptly acknowledge and process the representations or communications received from the taxpayers" and cut down on litigation.
"We are trying to tell our officials that the government is serious about providing a non-adversarial tax regime," a senior government official told ET. "Emphasis has been laid on cleanliness in office, punctuality, timeliness in appointment and avoiding unnecessary adjournments," the Central Board of Direct Taxes (CBDT) said in a statement, admitting that work in the area of random scrutiny of returns filed has often drawn adversarial comments from taxpayers.
The CBDT said it has issued directions to officials to ensure "highpitched assessments without proper basis are not made" and "lengthy questionnaires or summons without due application of mind are avoided". It also directed supervisory officers to play a more pro-active role in monitoring and guiding assessments and ensure that tax claims are not made without due application of mind.
The Central Board of Excise and Customs (CBEC) said only one team of audit officers will visit an assessee if he is registered with both central excise and service tax authorities to verify their records for compliance. The measure is expected to significantly ease compliance burden. It said round-the-clock custom clearance for specified export and import goods will be available at 17 airports and 18 seaports for certain categories of imports and exports. CBEC is also working towards reducing litigation.
The apex indirect tax body also pointed out that India ranks 54 on the World Bank's biennial 'Logistics Performance Index (LPI)' that ranks 160 countries based on a survey of international freight forwarders and companies engaged in international logistics. "The LPI report states that compared with other countries in their comparable income groups, India is an over-performing non-high-income economy alongside Malaysia, South Africa, China, Thailand and Vietnam," it said.
In recent years, several multinational companies such as Nokia, Shell and Vodafone have had to defend themselves against Income Tax claims running into thousands of crores of rupees. "It is a recognition of the fact that frivolous additions and highpitched demands are not conducive to the business environment and run counter to the growth aspirations of the government," Dinesh Kanabar, CEO, Dhruva Tax Advisors, said about the move on part of the tax bodies.
Talking about the CBDT circular, he said, "The circular prescribes an approval mechanism from the superiors and that should bring in a degree of objectivity. The instruction that appeals need not be filed just as a routine is very welcome and will hopefully result is matters reaching resolution without being carried to the courts. A radical circular, which we all hope will be implemented in the right spirit."