‘Curbing powers to authorise tax surveys is a step in the right direction’

The Central Board of Direct Taxes’ (CBDT) order to restrict power to authorise tax survey is being seen as a step in the right direction by tax and legal consultants among others.

Tax survey is basically a mechanism to verify submission by taxpayer for proper assessment.

According to CBDT, as ‘survey action under Section 133 A of the Act’ is an intrusive action, it is expected that it should be carried out with utmost responsibility. Accordingly, the Board directed that only the officers posted in Directorates of Investigation (Investigation Wing) and Commissionerates of TDS, shall act as “Income Tax Authority” for the purposes of survey.

It means only DGIT (Investigation) and Principal Chief Commissioner /Chief Commissioner (TDS) will approve survey of an assesssee.

On the new platform launched by Prime Minister Narendra Modi, Divakar Vijayasarathy, Founder of DVS Advisors LLP, said this new platform is part of digitalisation of the functioning of the IT Department undertaken to eradicate corruption, harassment of the taxpayers and reducing litigation by introducing faceless transactions.

Some part of it is already in practice with most of the notice being issued under e-proceedings. Now it is being extended to assessment and appeal.

“This should be coupled with tax certainty and other tax reforms like punitive measures for high pitches fictitious assessments, to derive optimum mileage, he said while advocating these reforms should be followed by consistent efforts to simplify the legislation and removing subjectivity in tax enforcement.”

Aravind Srivatsan, Partner at Nangia Andersen LLP, said simplification of tax policies and tech-driven faceless assessments also pave the way for rolling out clear concise tax positions on significant matter by the Tax Department as rightly understood by taxpayers and global business community which are incorporated in their business models. This will also eliminate the ongoing difficulties faced by taxpayers to approach judiciary in matters involving tax refunds due contested by Tax Department citing technical fallacies.

“With heavy technology and targeted audits, a clear message has been signalled to the taxpayer community is that the government is committed to acknowledge and treat the honest and compliant taxpayers with fairness and courteousness. Conversely, non-compliance to tax laws will be severely viewed leading to automatic penal consequences with strict enforcement approach by the Tax Department,” he said.

Vipul Jhaveri, Managing Partner (Tax) at Deloitte India, feels the idea of honouring the honest taxpayers through such a platform will encourage people to participate as also take pride in development and growth of the nation.

“It is certainly a very taxpayer-friendly step for putting in place a people-centric, public-friendly approach in tax matters and lead to larger structural reforms in the coming years. It will further the goal of Ease of Doing Business as also ensure Ease of Living, which the Prime Minister has been strongly propagating,” he said.

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