The former President of the Institute of Chartered Accountants of India (ICAI), Mr T.N. Manoharan, has sought the need for equitable treatment of tax payers and revenue authorities in the Direct Taxes Code (DTC). In his discussion paper on ‘DTC’ at the national conference on Direct Taxes and Allied Laws, organised by the Direct Taxes Committee of the ICAI, Mr Manoharan said the certain provisions in DTC are tilted in favour of revenue.
“It would be nice if the administration and enforcement of the law is done in a fair and equitable manner,” he said.
Several provisions in the DTC are weighed heavily in favour of the revenue authorities and against the taxpayer. Equation of accountability too lay heavily on the taxpayer, but the burden remains light on the revenue authorities, he said.
Quoting an example, Mr Manoharan said the time limit for taxpayer to make rectification application is reduced to two years, but the tax officer is no longer bound to pass any order. On the contrary, application will be deemed to be dismissed, if no order is passed within six months, he said. He also quoted some other examples in this regard.
Revised DTC
“It is hoped that the revised DTC provisions would treat both the taxpayers and the revenue authorities in a just and equitable manner,” he said.
Mr Manoharan commended the Government for accepting many changes in the original discussion paper of the DTC, which was released on August 12, 2009.
The revised discussion paper (RDP), was issued on June 15, 2010 modifying the approach on 11 items.
“Although there are a few areas of concern still lingering in the minds of the taxpayers, the Government needs to be commended for accepting many suggestions and changing its approach,” he said.
Mr Manoharan, who was the recipient of this year’s ‘Padmashri’ award, was honoured on the occasion.
It is shocking that a rectification application is proposed to be treated as dismissed if no order is passed within 6 months. This is totally against the principles of natural justice, is arbitrary, unfair to taxpayers, and legally allows the tax dept. to ignore all rectification applications they receive. The ultimate intention appears to be that a further amendment would be issued to not allow any rectification at all! On the contrary, I think this provision in the DTC should be changed to the effect that if any rectification application is not disposed of within 6 months, then it is deemed to have been accepted in toto by the tax dept. – in other words, the benefit should be given to the taxpayer and not to the tax dept.
“the time limit for taxpayer to make rectification application is reduced to two years, but the tax officer is no longer bound to pass any order. On the contrary, application will be deemed to be dismissed, if no order is passed within six months”
This is a very harsh provision, wherein the A.O. even need not to bother about passing any order for ractification application.