Income Tax Ombudsman – All you want to know

As a taxpayer, you may have some very legitimate grievances relating to your income-tax matters of settlement of your claims.  You may, for example, feel that the Income Tax Department owes you a certain refund of tax but it is not doing enough to hear your grievance of complaint nor taking action to redress it.  You may also be aggrieved about the rude behaviour of officials or their failure to follow instructions and circulars of the Board.  In all such cases, you can approach your Income tax Ombudsman.  Before you do so, however, you have to ensure that certain conditions are fulfilled.  The Ombudsman is governed by, and has to act within, the framework of the Income Tax Ombudsman Guidelines, 2006. 

            The institution of Ombudsman is of Scandinavian origin.  The Ombudsman enquires into grievances or complaints against the functioning of a public authority.  In our own country, the Income tax Ombudsman is appointed by the Central Government.  He is usually a person with vast experience in tax administration, but functions independently of it.   At present, the Government has appointed Ombudsman at New Delhi, Mumbai, Chennai, Kanpur, Chandigarh, Pune, Bhopal, Kochi, Kolkata, Hyderabad, Bangalore and Ahmedabad.

What Grievances can you take to the Ombudsman

          You can complain to the Ombudsman about your grievances relating to delays in disposal or settlement of claims connected with:

1. Issue of refunds;
2. Interest waiver petitions;
3. Appeal effects;
4. Rectification applications;
5. Release of seized books of accounts and assets;
6. Allotment of PANs/ issue of PAN Cards.

You can also complain of such matters as failure to:

1. Give credit for taxes paid, including tax deducted at source;
2. Maintain transparency in selection of cases for  scrutiny;
3. Follow the guidelines, circulars and instructions of the Central Board of Direct Taxes;
4. Observe proper working hours by Income-tax officials;
5. Acknowledge letters and documents forwarded by the assessee;
6. Maintain or update records and registers leading to harassment. “A person can also complain about any unwarranted rude behavior of Income Tax officials with assesses.”

Etc., For further details, please refer to clause 9 of the Guidelines.

Procedure to be Followed

          On receiving complaint, the Ombudsman will examine it to see if certain basic conditions laid down in the guidelines have been fulfilled or not.  He cannot take notice of the complaint unless these conditions are fulfilled.  These conditions are:

1. The complaint should have been signed by the complainant as well as his authorized representative, in case the complainant is represented by such an authorized representative.

2. The complaint should clearly indicate/provide:

a)      The name, address and PAN of the complainant;

b)      The name and designation of the official who is being complained against (this should invariably be the junior most officer who has given rise to the grievance, not below the rank of an Income Tax Officer)’

c)      The facts giving rise to the complaint;

d)      Supporting documents; and

e)      The relief sought from the Ombudsman.

3. The Ombudsman will accept complaints filed through the electronic media if they are otherwise in order, but the print out of such a complaint has to be signed by the complainant at the earliest.  After he does so, the complaint would relate back to the date on which it was first received electronically.

A complaint shall not lie to the Ombudsman unless in the first instance, the complainant had also made a written representation to the superior authority of the officer complained against.  Also, a complainant can complain only if he has received no reply and more than one month has passed since he submitted his representation.  Alternatively, he can also complain if he has received a reply but he is not satisfied with it, or if his representation has been rejected.

            No complaint can be made:

1. 12 months after the reply was received from the superior authority;
2. 13 months after the representation was submitted to the superior authority but no reply was received.

Remember, the Ombudsman will not take cognizance of the complaint if it has been the subject matter of :

a. an earlier settlement made by the Ombudsman

OR

b. an appeal, revision, reference or writ before any Income-tax authority or a court of law.

On receiving a complaint, the Ombudsman shall forward it to the officer complained against and shall endeavour to settle it by an agreement through either conciliation or mediation.  If the officer cannot settle the grievance by agreement with the complainant within a period of one month, or such further time as the Ombudsman may allow, the Ombudsman will mediate and try to bring about an agreement.  If he still does not succeed, he can make an ‘award’.

Powers

The Ombudsman has the following powers:

i)        He can receive complaints on matters indicated in clause 9 of the Guidelines.

ii)       He can consider these complaints and settle them either by agreement through conciliation and mediation or by passing an appropriate award.

iii)     He can require the Income-tax authority concerned to provide any information or furnish certified copies of relevant documents required by him.

iv)     In the event of the failure of an Income-tax authority, to furnish such information or documents (indicated in para iii above), he may draw an adverse inference.

v)      He can suggest remedial measures for redressal of grievances.

vi)     He can also report his findings to the Secretary, Department of Revenue and Chairman, C.B.D.T.

Duties

     The duties of the Ombudsman are to:

i)        Exercise powers of superintendence and control over his office.

ii)       Maintain confidentiality of information coming into his possession and not divulge the same to third parties, except with the consent of the person who furnishes such information. He may, however, divulge such information to an opposing party to the dispute in order to reasonably comply with the principles of natural justice.

iii)     Protect the taxpayers’ rights and reduce their compliance burden.

iv)     Identify issues that increase the burden of compliance and bring the same to the notice of the CBDT and Ministry of Finance.

v)      Furnish a monthly report to the Chairman, CBDT and Secretary, Department of Revenue recommending appropriate action including that to be taken against erring officials.

vi)     Furnish an annual review of the tax administration to the Chairman, CBDT and Secretary, Department of Revenue.

vii)   Compile a list of awards made by him during the financial year and report the same to the Chief Commissioners concerned and Chairman, CBDT so that the same can be taken into account while writing the Annual Confidential Reports of the officials concerned.

Nature of the Proceedings

     The proceedings before the Ombudsman are quasi-judicial in nature.  He is not bound by any legal rules of evidence. He is expected at all times to be fair and reasonable while performing his functions.

Nature of Awards

              As already indicated, he shall try to settle a complaint by agreement in the first instance.  If such agreement is not forthcoming within a month or such further time as the Ombudsman may allow, he may make an award.  This shall be speaking order and shall clearly specify the directions to the authority concerned- including making of an apology.  The award, however, cannot affect the quantum of total income or tax assessed or the penalty already imposed.  The Ombudsman can award compensation upto Rs. 1000/- for the loss suffered by the complainant.  Such compensation will be the first charge on the budget allotted to the authority complained against. The award shall be binding on the department but it shall be binding on the assessee, only if he issues a letter of acceptance within 15 days of its receipt.  If the complainant does not accept the award or fails to furnish a letter of acceptance within 15 days or further period of 15 days if the Ombudsman permits, it shall lapse and be of no effect.  If it is accepted by the assessee, the authority complained against has to implement the award within one month of its having being made.  Compliance of having done so has to be reported to the Ombudsman.

Check List

     A check list has been prepared to help you file a complaint. This is given below:

1. The complaint has not been signed by the complainant.

2. It has not been signed by the authorized representative.

3. It does not contain:-

• The name and address of the complainant
• Supporting documents
• Details of the relief sought from the Ombudsman.

4. It has been made electronically but the hard copy (print out) does not have the complainant’s signature.

5. The complainant does not seem to have reported to the immediate superior of the officer complained against.

6. More than one month has not passed before the representation to the immediate superior was filed.

7. The complainant does not appear to be aggrieved with the reply received from the immediate superior.

8. (a) The complaint has been made after the expiry of one year from the receipt of the reply of the immediate superior;

OR

(b) Where no reply has been received from the immediate superior:

The complaint has been filed after the lapse of 13 months from the date of filing of the representation before the immediate superior.

9. The complaint is the Subject matter of an earlier proceeding with the Ombudsman.

10. The ground(s) of the complaint is/are also the subject matter of a proceeding in appeal, revision, reference or writ before an appellate authority or a revisionary authority or a Court of Law.

11. The ground is not covered by Guideline 9 of the Income Tax Ombudsman Guidelines, 2006.

12. The complainant is represented by an authorized representative but no power of attorney to represent the complainant has been filed before the Ombudsman.

Remember, the answer to every statement in the check list should be negative.  A positive response to statements are Sr. No. 1 to 7 and 12 would indicate that the complaint is defective and the Ombudsman cannot proceed further to redress your grievance till the defect is removed.

A positive response to statements at Sr. No. 8 to 11, on  the other hand, would indicate that not only is the complaint defective but it is also incurable.  No purpose would be served by filing such a complaint.

We all have a positive responsibility in making this institution effective.  We can do so by ensuring that we eschew the defects indicated in the check list given above and avoid filing frivolous or vexatious complaints.