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V Swaminathan B.Sc. B.L., FCA

Recently Member (Income Tax), CBDT Ms. Anita Kapur has commented that government should Draft Tax Laws That Promote Intent Rather Than Litigation.

Some of the suggestions, unlike/except the ones such as found a mention in the concluding para of the write-up seemingly well-balanced, are prima facie lop- (one-) sided; leaning towards/favoring the behavioral pattern commonly observed and widely criticized for ages in the circles having proximity and remaining updated on the field realities.

There could be no contra views on the point underlined to the effect namely, that the law must be clothed in a plain and straight forward language (English), but at the same time with no attempt whatsoever , unwittingly or otherwise, to deviate in any manner from the ‘objective’ , rather the spirit behind, any enactment; likewise , on the well settled judicial principle that unless intent is made unambiguously clear, invariably the interpretation should be in favour of, leaving taxpayer with the least or no burden.

In this context, if scouted around, without the need to embark on any detailed study, it is bound to be truthfully realized that, besides the vagaries, most of the disputes and continued litigation are abused to be, not without substance or justification, in the words of an outstanding legal legend himself,- ‘lawyer stimulated’. Even so, what ought not to be over sighted is that, just as said of ‘charity’, any ‘controversy’ stemming on interpretation of an enactment begins at home; and is set in motion and kicked rolling, by the grass root authority, being the AO, who has to have a reasonably good grasp of any enactment, for making an ‘assessment’ in accordance with what the applicable provision says ;and in case of any genuine doubt or reservation, look up and follow the view taken by courts on any point of issue, especially a question of law. On the contrary, there are any number of instances in which the AO fails to do so; so much so, as per available updated statistics, it is the Revenue who is often responsible for prolonging disputes, eventually bringing exorbitant pressure on the judiciary and long pendency; thereby, impacting the otherwise expected quality and speedy adjudication.

Instantly comes to mind the recently reported ITAT Order in, – Maruti Securities Ltd vs. ACIT (ITAT Hyderabad)

In one’s honest and impartial perspective, an extremely disturbing question that instantly arises is THIS: Is it not nothing short of a tragedy , historically pervading the tax regime , that such a prima facie elementary proposition, or the like ones, were to be any longer rightly considered a matter for ‘controversy’ , further to be kept alive to eternity? More so, should regard be had to the fact that the selfsame proposition has been repeatedly taken to courts and the cited apex court’s judgments have left no room for the tax gatherer to obstinately pursue its own line of utterly misguided thinking. Is it not the duty and responsibility of the AO himself to “follow” (instead of leaving it to taxpayer to agitate, and the higher authorities, to do so) the settled judicial view, and abide by the unequivocally established principles even in the normal course of “performance of his duties”, also, while as expected of him, acting in “good Faith” or as “intended to be done under this Act”,- as envisaged in section 293 of the IT Act . The root cause for such unwarranted disputes is, one thinks, the cavernous gap in the tax gatherer ‘s understanding of the attendant simplistic concepts ; and the clearly differentiating factors between ‘income’ (not having to underline the prefix , -‘real’), “accrual” , etc. And in his obstinately indulging in blatant reluctance / refusal to recognize taxpayer‘s right to be taxed strictly in accordance with (not more / in excess) of what the law, and, wherever so, as elucidated by judicial opinion, says.

It is no longer early, by any yardstick, that the foregoing aspects impacting the quality of tax regime and its good governance receive the utmost attention and serious consideration by one and all concerned, in the larger interests of the taxpayers’ community, in its inclusive sense.

To conclude with apt quotes:

“On delay, we, as a nation, have some fine qualities but a sense of the value of time is not one of them. Perhaps, there are historical reasons. Ancient India had evolved the concepts of eternity and infinity. So what do years wasted in a litigation matter against the backdrop of eternity. Believing in incarnation, what does it matter if you waste this life. You will have many more lives in which to make good.

  • Our cases drag on over a length of time which makes eternity intelligible
  • The law may or may not be an ass but is certainly a snail; cases proceed at a pace as unduly slow in a community of snails.
  • Justice has to be blind but I see no reason why it should also be lame; here it just hobbles along, barely able to walk.
  • The hydra-headed bureaucracy of India contains some exceptionally able individuals, but they too get swallowed up by the system. Lord Curzon referred t the Indian administrative service as the strongest bureaucratic machine in the free world-so strong that even powerful viceroys found it difficult to correct or control it. The bureaucracy is impervious to all suggestions which come from outside sources. Their utter self-complacency resembles that of Mussolini who said, ‘Often I would like to be wrong, but so far it has not happened’.

(A narration from Palkhivala’s published speech (1987) – The Judiciary and the Legal Profession,  the Book – We, the Nation THE LOST DECADES)

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0 Comments

  1. vswami says:

    A (well-meant) Rejoinder:

    It is a sheer but odd coincidence that like thinking as in the singular comment has since come to be provoked by the reported development, -Repeal 72 obsolete laws, recommends law panel

    If perceived earnestly, and considered objectively, the task of repealing old /obsolete laws may have to be pushed to a second line of action. For, apparently, even in the normal course of events, more so for historical reasons, if not all, most of those would have become redundant on their own, having lost the teeth to bite / not really in force or being enforced. Instead, one thinks, the law commission must first frightfully engage itself and come out, on a top priority footing, with constructively practical suggestions and effective solutions , to the governments, of the Union and the States, as to how best to give a fresh lease of life and give a hard push to implement and enforce more than one of those laws , not-so-old or obsolete, manly of the States, but nonetheless have been wantonly allowed to simply rest for long, as a ‘paper tiger’, within the bounds of the statute book. One such instance is the law(s) having post -independence origin; being the special law(s) with a laudable objective of regulating the realty sector; to be precise, the business of construction and sale of multi-storeyed buildings /comprising indivisible but ‘independent’ units (flats/Apartments). The topmost need for doing so has been repeatedly underlined, of late dilated on, through material placed on devoted websites, but until now with no outcome worth a mention. The reported recent developments and related fresh moves from the Housing Ministry are not noted to have any immediate solutions to offer, to the multiple woes of the gullible buyers’ community, being the victims of the ‘villainy’ foisted and perpetuated for long.
    In short, the utmost need of the hour is to make every effort, sparing no pains, to strive and work out ways and means, to the end of all such laws , particularly those brought in on the statute book by our own elected men who have been in successive governance, in the post independence era, if called for used the proverbial ‘stick’ , instead of ‘carrot’ , to accomplish the desired outcome, with the sole aim of making life on earth much easier; in no circumstance, complicate it any further verging on complicity.
    For an upright enlightenment in the deservedly better direction, and in turn to equip self to sharing useful views with the rest for the common good, are to be found enough feedback in the public domain; for instance, HERE > · · Justice S. Rangarajan Memorial Lecture | Talk2Press talk2press.blogspot.com/2009/…/justice-s-rangarajan-memorial-lecture.ht…(Sep 27, 2009 – JUSTICE S. RANGARAJAN MEMORIAL LECTURE. Delivered by. HON’BLE MR. JUSTICE N. SANTOSH HEGDE,. LOKAYUKTA, STATE OF …)

  2. Nem Singh says:

    But who will change this autocracy of bureaucracy? Is after 65 years we are bound to follow the laws which were made and regulated by outsiders for their own country benefit? Are we deaf or poor in knowledge and unable to make own good laws in the interest of people and country? I this no but we are politically motivated and ignore all things saying that “Sab kuchh Ram Bharose chalata rahega”. It is right time to make new laws considering the global scenario and current situation of the country and the people also. Otherwise we lost our dignity, unity and stability.

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