Wrongful Action of Assessment/Appellate Authorities In NFAC And Total Injustice Caused To Tax Payers
Summary: The Income Tax Department’s assessment orders for the 2017-18 and 2018-19 financial years have raised concerns due to the misuse of Section 115BBE of the Income Tax Act, particularly post-demonetization. Around 90% of these orders are high-pitched, with tax and penalty demands exceeding three times the net worth of the taxpayers, suggesting a lack of thorough examination by assessing authorities. The imposition of penalties, which are directly linked to these assessments, often remains unresolved as penalty appeals are dismissed before regular appeals are decided. The First Appeal Orders by the Commissioner of Appeals in the National Faceless Assessment Centre (NFAC) have mostly favored the department, leaving taxpayers without access to natural justice. These actions have resulted in the creation of unwarranted demands, putting taxpayers in a difficult position. The author, a tax advocate with over 40 years of experience, has criticized the current state of affairs, urging the Central Board of Direct Taxes (CBDT) to delegate more experienced officials for handling appeals to avoid long-term damage to the reputation of the department. The article raises several questions about the fairness and efficiency of the Income-Tax Act, administration, and assessing officers, urging a review to ensure the system aligns with the intended purpose of equitably taxing citizens without causing undue harm to taxpayers.
About 90% of orders passed in Income-Tax Deptt. for the Asst. Year 2017-18 and 2018-19 are high pitched assessment orders. Section 115BBE of Income-Tax Act as amended after demonetization has been misused by majority of assessing authorities. Tax/Penalty demands raised in those orders are more than 3 times the Net Worth of Tax Payer. This clearly indicates that assessing authorities have not applied their mind or common sense or natural justice in concluding the orders. Penalties are directly linked to regular assessments. On date, all Penalty Appeals are dismissed before disposing regular appeals on assessment. First Appeal Orders passed by Commissioner of Appeals NFAC are all in favour of the Deptt. only. Tax Payers are not getting natural justice. This has resulted in mounting up of fake demands in Income-Tax Deptt. and the Income-Tax Payers are standing in between Devil & Deep Sea. I have not seen these type of assessment orders in my 40 years of Income-Tax practice. Therefore, I suggest CBDT to delegate learned officials in the Deptt. to dispose the appeals. This suggestion has been given in the interest of Tax Payers & CBDT to avoid Bad Remarks that may be issued by ITAT in future, which may result in defaming of CBDT. If this is continued, Deptt. wil get bad name & Income-Tax Payers will go out of Tax Net. I hope Tax Policy Division of CBDT will introspect, make an analysis of following issues in the interest of tax payers & Govt. revenue to meet the intention of legislature for framing Income-Tax law.
(1) Very purpose of Income-Tax Act is to equate the citizens financially have been met ?
(2) Very purpose of Income-Tax Act is to bankrupt the Tax Payers ?
(3) Is there anything wrong with the present Income-Tax Act ?
(4) Is there anything wrong with the administration of Income-Tax Act ?
(5) Is there anything wrong with the assessing officers of Income-Tax Dept. ?
(6) Why assessing officers are resorting to pass high pitched assessment ?
(7) Reasons behind passing high pitched assessment orders ?
(8) Can I presume that AO’s passing high pitched assessment orders are not fit for the job or insane & does not have common sense to judge the case ?
(9) Whether assessing officers are acting as such to show their mark of protest against faceless assessment scheme of Income-Tax Dept.
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Author: B.S.K. Rao, B.Com, LL.B, MICA, Tax Advocate, Tilak Nagar, Shimoga-577201, Karnataka | M: 9035089036 | E: [email protected]
