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[Resolved]  GOVERNMENT of INDIA- INCOME TAX ofFICE - ONE of MOST CORRUPT DEPARTMENT. — INCOME-TAX OFFICES CORRUPTION AND BRIBERY SCAM

‘Babudom’ is a phenomena that is most pronounced in the IT department. While we all know that bribes are paid to get things moving, attempts to quantify it have remained ambiguous. This study takes into account what the common citizen experiences. In a sample survey conduced in 2006, it traces his concerns and perceptions about petty corruption estimated at Rs 496 crore for this period. Based on the profile of those interviewed, following pointers emerged:
3.14% people pay income tax (Rs331.49 lakh as of 2002-03)
5.7% (91.16 crore households) had some interaction with the department (13% in urban and 3% in rural areas)
46% visited the department a minimum of 4 times.
20.4% of those who interacted with the department had paid bribe (1.16% of total households paid about 24 lakh),
62% of those who visited, felt that corruption had increased during this period.
Corruption in high income states is higher than in low income states.
47% of bribes were paid directly to IT staff; 28% through CAs and 15% through agents and touts.
While the I-T Department is notorious for being corrupt and harassing consumers, they have their story too, some of which does hold water. They feel people wake up at the last moment to file returns. Resultantly workload 15 days prior to last date increases manifold. CAs, touts and agents collect money from clients in the guise of bribes and tarnish image of the department. Tax payer’s desire to minimize tax liability/burden or to cover lapses creates a pervasive corruption culture.
Issues of Concern
Repeated visits: Procedures like incomplete formalities and clarifications on paper work are reasons for revisits. 37% returned because of non-availability of concerned staff.
Procedural problems: 41% (including literate people) complained of tedious paperwork.
Non-availability of forms: Common occurrence that resulted in delay and harassment.
Low level of awareness amongst taxpayers: Information has not percolated down, resulting in confusion, anxiety and lack of awareness amongst tax payers, increasing their dependence on external sources.
Mistrust
Level of trust between taxpayer and the IT department is extremely low.
Penetration of Corruption
67% respondents interacting with the department felt that officials were corrupt (71% illiterate, 79% professionals and 81% high income people felt that corruption was high)
Despite setting up a Complaint Redressal Helpline, computerization of records and centralization of refund dispatch, 40% people felt that corruption persists.
39% respondents felt that the department lacked seriousness/commitment to fight corruption; 22% found them indifferent; 23% felt things were changing gradually and committed levels were going up.
35% found service quality of officials abysmally low; 36% felt it was good; 29% were indifferent.
23% respondents from low income states experienced corruption every time they visited the department while 10% in high income states did so.
Taxpayers can either go in for a long/tedious process or take the alternate route of paying bribe and getting the job done faster. 30% used the ‘alternate’ route (32% in low income states and 27% in high income states).
55% paid bribe payers for filing returns, getting PAN card, IT refund, seeking benefits (under assessment, reduction in penalty, closure of scrutiny). Average bribe for getting tax exemption was Rs 325 and for ensuring tax refund Rs 2141.
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Aug 14, 2020
Complaint marked as Resolved 
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Dear Sir

Till last year my income tax return forms were accepted at Ward-6 at Aayakar Bhawan ( Income Tax Office) at Patiala, Punjab. This year when I went to file my return then they refused to accept the ITR-1 form and said that you have to file the income tax return in the circle at Mandi Gobing Garh (Punjab) as your taxable income is more than 5 Lacs. Mandi Gobing Garh is about 40 Kms away from Patiala. I went there. There also they denied to accept the from and said that it should be accepted at Patiala only. Please guide me what to do? It is an unnecessary harassment.
I am waiting for your reply.
Dear Sir
File an e -return and please ask our DRFA to complete the last column of transfer/challan no of monthly TDS and you can every year submit online.

No hassels

Sanjai Saxena
Thapar University
Sir,

Due to appeal affect, Iam eligible to get refund of rs. 48054 from ACIT Circle 1(1), Ujjain. But even after 6 written reminders and many oral reminders to the ACIT Circle 1(1), they are not sending my refund.

Please help me what should I do ?

Ashok Agrawal
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Sir,
I have been allotted PANNO.AAQPK4839B as intimated to me by Income tax office, Chandigarh vide their letter No. 770115/26 dated 29.05.1998 but till date no PAN card is sent to me..

It is therefore requested kindly send me IT card for the PAN Number or guide me how to get card for the income tax purpose.

Kamlesh Kumari
#2551, Sector 22-C,
Chandigarh
Dear sir,
I have been allotted PANNO.AFQPR1496A by Income tax office, Aaykar bhawan, Panchkula, haryana . I have been told that i would receive my IT card in time but till date no PAN card is sent to me.

I need it urgently. So, it is requested kindly send me PAN card (IT) for PAN Number as soon as possible.

GEETA RANI
#348, Sector-11,
Panchkula
Haryana
The main problem for VRS is, if your VRS compensation in the year 2029 is Rs.2, 100/- per month, you are under Income Tax ambit!

This refers to “THE TRUTH ABOUT VRS”, The Telegraph, 1.9.2009. You have mentioned about VRS where lucky people got payment at the time of separation and got an Income Tax relief of Rs.5 lakhs. They got interest on the capital they got also get income tax relief on savings they made year after year. If a person does not become extravagant, they can lead life happily and utilize their skill as they like.
Another type of VRS is there which media does not perhaps has any idea. Here instead of lump sum one time payment compensation is given on monthly basis till the age of retirement. Suppose here the person is put under VRS in March, 2009 at the age of 40; he will be getting fixed monthly compensation till February, 2029 and after that no pension or any other benefit. Here if the compensation is more than Rs.25, 000/- (Rupees twenty five thousands) per year, i.e. @Rs.2, 100/- (Rupees two thousand one hundred) per month, income tax will be deducted at source from this compensation in the year 2029! How it happened I am explaining.
During nineties Steel Authority of India Ltd. (SAIL) was passing through very bad time; the demand of steel was poor and SAIL was cash trapped. To overcome this situation SAIL had to reduce manpower without taking financial assistance from other sources. So an innovative self-financing VRS was formulated. Here instead of lump sum payment, compensation was on monthly basis till the age of retirement based on the last monthly salary drawn and no Rs.5 lakh income tax (IT) relief as per Section 10(10C) was given. Income tax was being deducted at source as per basic concept of IT (Ref: Basic Income tax National Website of IT Dept. of India.htm), i.e. “As per rates of tax specified in Part-I of the First Schedule to the Finance Act passed annually by the Parliament of the country”. People were getting Tax Rebate on savings and no problem was there.
In the mean time some people appealed to Court for Rs.5 lakh IT relief as per Section 10(10C) and in 2003 Calcutta High Court gave ruling that the VRS people are financially sufferers and they cannot be deprived from the Rs.5 lakh relief and this should be given considering their total compensation.
Normal common sense implies that up to the first Rs.5 lakh no IT to be deducted and beyond Rs.5 lakhs, IT to be deducted as per basic concept of IT. Otherwise, total compensation over years may be added and Rs.5 lakhs to be deducted from the same. The balance amount is taxable amount over years; it should be divided by number of years to find the taxable income per year and IT should be deducted as per Basic Concept of IT.
Kabiguru Rabindranath Tagore has stated “SUKSHMA BUDDHIR LAKSHMAN EI JE, TA SAHAJ JINISHKE SHAKTA KORE TOLE. PRITHIBITE BISTAR BUDDHIMAN NA THAKLE PRITHIBIR KAJ ANEKTA SAHAJ HAITO”. (Rajarshi). This means, “Problem with super intellectuals is that they make simple things complicated. Had there been less super intellectual people in the world, life would have been easier”. (Rajarshi).
Authorities are super intellectuals. So what they did is, they added the total compensation to be received over years, deducted Rs.5 lakh from that amount as relief and assessed IT on the balance amount as per the IT rates passed by the Parliament in the year of VR and distributed the huge IT over years, which is against the “Basic Concept of Income Tax”. What they did, the example will clarify the picture:-
Suppose the person lost service due to VRS in March, 2009 at the age of 40 and he will be getting fixed monthly VRS compensation @Rs.20, 000 per month till February, 2029, i.e. for 20 years (240 months). Then the total income over 20 years (240 months) comes to Rs.48 lakhs. After giving relief of Rs.5 lakhs as per Section 10(10C) of IT rule the taxable income over 20 years comes to Rs.43 lakhs. As per Finance Act passed by Parliament in the Financial Year 2008 -09 the total tax on Rs.43 works out to Rs.12, 90, 000/- (twelve lakhs and ninety thousands). This is divided by 20 to work out the income tax liability in each year of earning and it comes out to Rs.64, 500/- per year (Rs.5375/- per month). The person gets @Rs.14, 625/- per month after deduction of income tax of Rs.5375 at source till 2029. No tax rebate on any savings is allowed since the assessment of income up to 2029 is already assessed in the Financial Year 2008-09. Suppose the company liquidates within two years of VRS, total compensation received by the person will be less than Rs.5 lakh, but already Rs.1, 29, 000/ - has been deducted as IT at source which he will never get back.
This mockery of Rs.5 lakh relief is such that if the person’s yearly compensation is more than @Rs, 25, 000/- a year (say, @Rs.2, 100/- per month), his total income over 20 years will be more than Rs.5 lakh and he will fall under IT ambit and IT will be deducted from compensation of Rs.2, 100/- per month in the year 2029, whereas had he not lost his job due to VRS, with compensation @Rs.38, 000/- per month today he would not have to pay any income tax (Considering a saving of Rs.3 lakh).
Such a decision by the authorities came as a bolt from the blue to the VRS victims of nineties in the year 2003. Many of them had to abandon education of their children, postponed marriage of their daughters, stopped building their houses, some sold away their half completed buildings and shifted to “Jhupris”, , many became sick and could not continue proper treatment although company assisted “Mediclaim” but they did not have cash to shell out for treatment. Being unable to bear this shock till date nine persons have committed suicide. In fact it is a case fit for getting a place in “Guiness Book of Record” or “Ripleys Believe It or Not”.
The VRS victims formed association and appealed to Calcutta High Court in 2003 to consider the severe financial punishment for losing job under VRS. Lots of Laws, By-laws, Sections and By-sections and what not thread bare analysis are on and it is expected that justice will come some day though many of the victims may not be in the world to receive the refund of IT already deducted on the mockery of Rs.5 lakh relief.
Since it is a tricky matter, it has not caught the notice of media and very few people know this unbelievable trick of the authorities.

Hara Lal Chakraborty
Ex. Chief Engineer (Project) | Also a victim of above innovative calculation
SAIL, Durgapur Steel Plant
3/27, Arabinda Nagar
Kolkata – 700040
Ph. No.[protected], Mobile: [protected]

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