Mody said the charter would be notified very soon. Once operationalised, India would be only the “third or fourth” country to have such a tax administration, he said. CBDT frames policy for the Income Tax Department.
“The underlining theme with which we have been working till now is that we trust taxpayers. From purely an enforcement agency, we are shifting our focus to being a service-oriented department,” said Mody.
The CBDT chief said that they were attempting to promote voluntary compliance. In the process, he said, they were also trying to inculcate some discipline on the provision of these services within a limited time-frame, and with certain benchmarks.
“It is the taxpayers right to expect these services,” he said.
Modi had earlier said that the services were part of an administrative mechanism by the way of an existing citizens charter. “Now we are giving it a statutory recognition and once it is in the statute (in the law), it is enforceable,” he said.
“Earlier it was expected to be enforced but now it is binding. And to that extent it is the empowerment of the taxpayer,” Mody said. He explained that the duties of a taxpayer are “already provided” in the Income-Tax Act regarding payment of tax, advance tax, and doing tax deducted at source (TDS).
“I think the US, Canada and Australia have it in statute. So it is a big, big responsibility we are undertaking,” he said.
Finance Minister Nirmala Sitharaman proposed the charter in her Budget speech on Saturday and said the government would like to reassure taxpayers that it remains committed to taking measures so that they are free from harassment of any kind. Tax harassment cannot be tolerated, she said.
She said that any tax system required trust between taxpayers and the administration, which will be possible only when the latter’s rights are clearly enumerated.
Talking about the ‘Vivad Se Vishwas Scheme’, Mody said the aim of the latest measure was to reduce litigation and see the finalisation of 4.83 lakh stuck cases in appellate forums under the direct taxes category.
The CBDT chairman said that a “few lakh crores” are locked in such cases. “These cases are at different appellate levels like Commissioner of Income Tax (Appeals), Income Tax Appellate Tribunal, High Courts and the Supreme Court. These cases stuck cover multitude of individuals, partnership firms, cooperative societies, small and big corporates,” he said.
Under the scheme, a taxpayer would be required to pay only the amount of the disputed tax and will get complete waiver of interest and penalty provided they pay by March 31, 2020. “Those who avail this scheme after March 31, 2020, will have to pay some additional amount. The scheme will remain open till June 30, 2020,” Sitharaman had said in her Budget speech.
A similar scheme, ‘Sabka Vishwas’, for cases stuck in litigation under the indirect taxes category, was brought by the government in the last Budget. Buoyed by the success of the faceless e-assessment scheme of income tax cases, the finance minister proposed in the Budget to bring a new faceless appeal scheme.
The CBDT chief said that as a part of the e-assessment scheme, launched on October 8 last year, the I-T Department has completed assessment in 100 cases and notices had been issued in 48,000 cases out of the total 58,000 picked as part of the scheme.
“All physical infrastructure is already in place in terms of hardware. The success of the e-assessment scheme has given us the confidence that it (faceless appeals) can be handled,” he said.
“Based on that convenience, we took it to the next level. It (e-appeals) would be randomised and team-based and with the basic idea to increase transparency,” he said, adding that this scheme would be notified soon, as well.