Life is amazing: 2014

F.No. TDS 18-1/Confdl/07-08 Dated: 26.10.2007

Place: Bangalore

To,

The Chief Commissioner of Income-tax,

Bangalore-I,

Bangalore.

Sir,

Sub: Representation- Confidential Report for the year 2006-07- Adverse remarks- reg.

Your Ref: D.O.C.No. Confdl/AR/SSR/2007-08/CC dated 29.08.07

F.No. Confdl/AR/SSR/2007-08/CC dated 11.09.07 F.No. Confdl/AR/SSR/2007-08/CC dated 28.09.07

D.O.C.No. Confdl/AR/SSR/2007-08/CC dated 23.10.07

My Ref: DO. F.No. TDS 16-3/Confdl/07-08 Dated 10.09.07

F.No. TDS 16-3/Confdl/07-08 Dated 14.09.07

F.No. TDS 16-3/Confdl/07-08 Dated 19.09.07

F.No. TDS 16-3/Confdl/07-08 Dated 08.10.07

F.No. TDS 18-1/Confdl/07-08 Dated 10.10.07

F.No. TDS 18-1/Confdl/07-08 Dated 25.10.07

On 03.09.2007 I received a communication from your office vide letter D.O.C.No. Confdl/AR/SSR/2007-08/CC dated 29.08.07 about the adverse remarks of Shri A K Agarwal, CIT (Central), the Reviewing Officer in my ACR for the year 2006-07. The adverse remarks by the Reviewing Officer in my ACR were based on the General Assessment reflected in PART V of the ACR. The relevant portion of PART V communicated to me is reproduced for your ready reference as under:

“PART-V- To be filled in by Reviewing Officer:

3. General Assessment :

The officer is intelligent but is casual in his approach to work. Even in the ACR proforma here, he has not given targets and achievements in all the important areas. The details of leave was incorrectly shown which was later corrected. The required information regarding reporting officer and reviewing officer are not filled in while Part-I of the proforma. This casual Approach is also seen in the maintenance of records, submission of scrutiny and other reports.”

2. “WITH POWER COMES RESPONSIBILITY, WITH GREATER POWER COMES GREATER RESPONSIBILITY.”

3. The Office of a Commissioner is the core and a front office as a Fundamental Unit. Whereas the offices of field formations are existential reality and created in and around the Office of a Commissioner. The meaning of each post is as under:

a. The Assistant Commissioner- An Assistant to Commissioner

b. The Deputy Commissioner- A Deputy to Commissioner

c. The Joint Commissioner- Where an the authority makes the joint efforts towards an Office of a Commissioner

d. The Additional Commissioner- An authority who is an alter ego of a Commissioner and in the absence of a Commissioner.

4. The wisdom and maturity goes on increasing as one ascends in a hierarchy. The leader at the top is bestowed with responsibility to achieve an intended goal while playing a game. It is also an important responsibility of a leader to develop and shape the potentiality of each member for their future growth in a team. It is to be noted that “Winning a game by the leader is only commendable, when it is played by adhering not only to rules but also to the spirit of the game.

5. A licensed gun is issued to those by authorities, when the authorities are convinced that the gun will neither be used for coercion nor for indiscriminate firing. A bullet is fired from a gun towards an unarmed person not on a provocation but after exhausting all the options. Cautioning, the unarmed person several times is the EDIFICE and Fundamental Rules of Firing. Similarly, before an adverse remark is made in an ACR by any authority it is also seen whether the “DUE PROCESS OF LAW” has been strictly followed or not?

6. It was a rude shock when I received the adverse remarks from Shri A K Agarwal, CIT (Central) for the following reasons:

a. During the year 2006-07, the Reviewing Officer has neither informed me about the casual approach nor has given any memo by cautioning me, which is fundamental for making an adverse remark in an ACR.

b. If the remarks of the Reviewing Officer would’ve been true then the Reviewing Officer would’ve taken steps in improving the performance in the present job, where the adverse remarks were made, which was never done during the year 2006-07. The same fact can be reinforced by inquiring into that no counseling, discussions, censuring or reprimanding me through a memo was done by the Reviewing Officer in the year 2006-07.

c. If the Reviewing Officer had found any deficiencies in my work then the Reviewing Officer would definitely have assessed my potentialities and prepared me for the jobs suitable to my personality. On the contrary, the Reviewing Officer has endorsed the views of the Reporting Officer about my overall performance. The Reporting Officer who was supervising my work on day to day basis was always appreciable about my core area of work i.e. Quality investigation, Quality Search Assessments and my efforts in Budget Collections. The same is verifiable from the comments in my ACR for the year 2006-07.

d. I take the humble opportunity to highlight some of the main functions of various posts in an Office, in order to ascertain, “Whether the Reviewing Officers observations were appropriate about filling of ACR proforma and maintenance of records?” The relevant content from the MANUAL OF OFFICE PROCEDURE published by DIRECTORATE OF INCOME TAX (ORGANISATION AND MANAGEMENT), CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, GOVERNMENT OF INDIA - FEBRUARY 2003 is reproduced as under:

Manual of Officer Procedure: Volume-1 (Administrative)
Page No.	Point No.	Description
37	23	Functions of an Assessing Officers
37	23.1	The main functions of the Assessing Officers are:-
	23.1.i	Ensuring processing of returns on AST module.
	23.1.ii	Alloting PAN’s wherever required
	23.1.iii	Making IRLA operational and ensuring that all demands are entered into this system
	23.1.iv	Ensuring all software packages prescribed by the DIT (Systems) are made operational
	23.1.v	Seeing that all taxpayers grievances are attended in time and redressed in fixed time bound manner.
	23.1.vi	Ensuring timely collections of demand and issue of refunds.
	23.1.vii	Selection of cases for scrutiny in time and ensuring their timely disposal
	23.1.viii	Controlling all computer hardware and software of the range and ensuring its maintenance, replacement and updating. Providing technical support and guidance for the operation of computer systems
	23.1.ix	Taking all necessary steps for widening of tax base.
	23.1.x	Internal audit functions
	23.1.xi	Ensuring that appeal effects are given and central scrutiny reports are submitted in time
	23.1.xii	Statutory functions

40	27	Functions of Office Superintendent
42	27.4	Work relating to assessment and related functions
43	27.4.ii.p	Proper Maintenance of Records including placement of all papers, specially returns, forms TDS certificates etc. on records by way of conducting test checks.

56	30	Functions of a Tax Assistant
58	30.3	Work relating to assessment and related functions
58	30.3.iv	Proper placement and processing of all papers including those regarding advance tax, partnership deeds, challans, advice notes etc. in the case records

e. Without prejudice to the observation the Reviewing Officer I state that the Reviewing Officer has not made any of the observation relating to main functions but has mostly remarked in my ACR about the functions relating to the Administrative Section of CCIT (CCA), Office Superintendent and a Tax Assistant.

f. With due humility, I express that an ACR is not an instrument of fault finding but an assessment of overall performance of a person in a year. I’m still confused with the motive “Why Shri A K Agarwal CIT (Central) is maligning my unblemished career despite my best of my efforts in the year 2006-07?”

g. Since the adverse remarks have not followed any of the criteria for making an adverse observation with respect to the development of a subordinate and issuing of memos in the year 2006-07, I have reason to believe that the columns of ACR are, therefore, filled up by the Reviewing officer in a subjective and partial manner”.

h. Since, the official proceedings necessary for the ACR is in progress, I submit my explanation point by point for all the issues raised by the Reviewing Officer in the General Assessment for the year 2006-07.

7. From the above General Assessment of the Reviewing Officer the following observations have 3 limbs which have become the basis of adverse remarks in my ACR for the year 2006-07. The same is listed as under:

a. PART – I proforma of the ACR is insufficiently/incorrectly filled and later corrected.

b. In PART-II, target and achievements in all important areas have not been filled.

c. Casual approach in maintenance of records, submission of scrutiny and other reports.

8. Sir, I had requested you the basis of adverse remark by the Reviewing Officer and also a copy of PART-I and PART- II vide letter DO. F.No. TDS 16-3/Confdl/07-08 Dated 10.09.07. You have supplied me the material vide letter F.No. Confdl/AR/SSR/2007-08/CC dated 11.09.07. I have perused through PART-I and PART-II of the ACR supplied by you. I also noticed an infirmity of the Reviewing Officer while making the adverse observation about the PART-I in my ACR for the year 2006-07.

9. According to PART – I proforma of the ACR, it can be seen that there is clear mention in the ACR itself that it has to be filled by Administrative Section of CCIT (CCA). Certification of the same, by Shri S K Iyer, the then CCIT (CCA), reaffirms my view. Therefore, the Reviewing Officer observation that ‘I was casual while filling the PART - I proforma of the ACR’ can never become as one of the basis of adverse comments in my ACR for the year 2006-07. The observation of Reviewing Officer about the work of CCIT-CCA in my ACR about PART-I Proforma is an infirmity which should have been suggested by the nodal officer for correction by the Office of CCIT-CCA itself. This infirmity of Reviewing Officer in my ACR was brought to your knowledge vide letter dated 25.10.2007 and I sought your guidance on this issue.

10. With due humility I bring out that the observation of the Reviewing Officer for non-filling/insufficient filling of PART-I of ACR will never become reason for being CASUAL. It is a fact that due to shortage of manpower at the office of CCIT-CCA each individual sometimes while writing an ACR may help in filling the PART-I of the ACR. If the Reviewing Officer takes the voluntary assistance of an Officer as the basis of adverse, then the Reviewing Officer on technical grounds will be in a difficult position to defend the adverse remarks aimed at Officer Superior to him. Therefore, the 1^st limb about the adverse remark made by the Reviewing Officer on this reason is not only sustainable but a petty remark.

11. The 2^nd limb about the adverse remark of the Reviewing Officer in my ACR is again based on the PART –II Proforma of the ACR. The Reviewing Officer has stated that I have not given “target and achievements in all the important areas in PART-II of the ACR for the year 2006-07.

12. Sir, your letter C.No. 304/Vig/CIR/2005/CC-I dated 05.04.2007 is on the subject “Writing of ACR of IRS (IT) Gr ‘A’ Officers for the year 2006-07 (01.04.2006 – 31.03.2007). This letter is based on the letter F.No.A.28011/2/2004-DT/Per dated 29.03.07 issued by the Section Officer (DT/Per), Ministry of Finance, Central Board of Direct Taxes, North Block, New Delhi.

13. In this letter, there is no separate preset-format issued for filling target and achievements in all important areas for the year 2006-07 while writing an ACR. The target and achievements in all important areas for the year 2006-07 has been vividly published as ACTION PLAN FOR FINANCIAL YEAR 2006-2007 by the Central Board of Direct Taxes. The target and achievements in all the important areas for the Assessing Officer are clearly spelled at Page 14 (read with page 3 to 7), 16, 17, and 19 to 29. It is not possible for any Group ‘A’ Officers to fill up the target and achievements in all the important areas within the 7 lines of space provided in the ACR.

14. Rules for writing ACR is also very strict about Column 10, 11 and 12 of PART II (to be filled by the officer reported upon) of ACR. The target and achievements in all the important areas and self appraisal should not exceed more than the space provided in the ACR. Annexing any additional paper to ACR is viewed very seriously.

15. With due humility I would like to express that “No Group ‘A’ Officers can and no Group ‘A’ Officers has filled the targets and achievements in all the important areas in their ACR.” There is also no percentage set in the instruction to the writing of ACR that ‘what targets and achievements in all important areas if an Officer writes gets qualified for being termed as CASUAL or otherwise.’ Even the Reviewing Officer in the year 2006-07 has not given any format for writing in ACR all the target and achievements in all important areas.

16. Sir, no separate targets were set by the Reviewing Officer assessing officer-wise. The targets and achievements for the year 2006-07 were set by the Reporting Officer assessing officer-wise. The areas mentioned were as under:

a. Budget Collections – Corporate and Non- Corporate.

b. Demand Collections- Arrear and Current.

17. I had brought to the knowledge of Shri Narender Kumar, Addl. CIT, Central Range-2, about the difficulties in achieving the targets for the year 2006-07. The difficulties were based on the fact that in the year 2005-06, BPL Group had not only achieved the above targets but contributed greatly in achieving the targets of the Central Range-2. Since the BPL group along with the other groups was de-notified, the targets set by the Reporting Officer for the year 2006-07 were seemed to be on a higher side.

18. Shri Narender Kumar, Addl. CIT, Central Range-2, explained to me that “Hari, the targets are tentative as the target to be achieved is for the entire CIT (Central)’s charge. You just concentrate only on the Budget Collections. The Demand Collections for the CIT (Central) Charge have already been achieved in the first quarter of financial year 2006-07 by adjusting the Wipro Group’s refund amount. Therefore, you need not worry about the Demand Collections.”

19. Since there was confusion over the target, I was advised to concentrate only on the budget collection. Therefore, I was under the bonafide presumption that I have to write in my ACR only about the Budget Collections, which was my target. In PART-II at column 12 of ACR for the year 2006-07, I had written a summary about my core work. The self appraisal about my core work for the year 2006-07, was the Assessment of Search cases in the case of M/s Deepak Cable Group and Prasad Reddy Group, tax collected from them and also the Post Survey enquiries in the case of M/s Karnataka Breweries and Distilleries Limited and M/s Chaitanya Properties Private Limited.

20. Though I’ve not written all the areas of work in the ACR but the Reporting Officer has not only appreciated my efforts in the core area of work but also the entire area of work done in the year 2006-07. Its true since the Reporting Officer has not only monitored the work on day to day basis, but has silently acknowledged my modesty of lying low while writing my target &achievements in ACR despite doing good qualitative work. This fact was confirmed from your letter F.No. Confdl/AR/SSR/2007-08/CC dated 11.09.07. The relevant extracts of the comments are being reproduced for your ready reference as under:

Comments of Reporting Officer

“The Officer has achieved the Budget Collection etc. He has not reported upon other targets such as targets arrear demand collection, net collection out of current demand etc. There also his efforts were very good. He has completed good quality assessment in the Deepak Cables Group of cases. He has also followed post-survey enquiries in the case of KBDL and Chaitanya Properties Ltd., with perseverance. He is a good team person”

21. Even my overall efforts for the year 2006-07 were appreciated by the Reviewing Officer in my ACR as the Reviewing Officer has agreed with the remarks of the Reviewing Officer. This fact was again confirmed from your letter F.No. Confdl/AR/SSR/2007-08/CC dated 28.09.07. The relevant extracts of the comments are being reproduced for your ready reference as under:

Comments of Reviewing Officer

“Whether the Reviewing Officer has agreed on the remarks of the Reporting Officer? –

Yes, Except for Column 17(b) where I rate him as Good only”.

It may be mentioned here that column 17(b) related to the grading on Officer’s: Knowledge on procedure’.”

22. From the above fact, it now becomes clear that the target and achievements in all important areas for the year 2006-07 (ACTION PLAN FOR FINANCIAL YEAR 2006-2007 by the Central Board of Direct Taxes) is not possible to mention within the column 11 of the ACR for the year 2006-07. Therefore, the adverse remarks of the Reviewing Officer on the 2nd reason limb relating to PART-II proforma of the ACR becomes peripheral and minor issue. I request you humbly to observe that the Reviewing Officer has not been all that fair by appreciating my overall performance on one hand, and on the other making adverse remarks on petty and minor issues.

23. The 3^rd and final limb about the adverse remark of the Reviewing Officer is based on “casual approach in maintenance of records, submission of scrutiny and other reports.”

24. Sir, I had requested you the basis and copies of material relating to the adverse remark made by the Reviewing Officer vide letter DO. F.No. TDS 16-3/Confdl/07-08 dated 10.09.07. You have supplied me this material vide letter F.No. Confdl/AR/SSR/2007-08/CC dated 28.09.07. Your letter accompanied the letter of the Reviewing Officer F.No. ACR/CC-1(1)/CIT(C)/06-07 dated 26.09.2007 annexed with ANNEXURE – A, B, C, D, E, F, G-1, G-2 and H. Your good self was kind enough to give me 30 days time to make representation starting from 01.10.2007.

25. After perusing the material I had requested for personal inspection of my work at CIT- Central Office, in order to save time for representation vide letter. F.No. TDS 18-1/Confdl/07-08 Dated 08.10.07 and 22.10.07. This request was denied by you vide letter D.O.C.No.Confdl/AR/SSR/2007-08/CC dated 23.10.2007. Sir, after responding to my request after 16 days you had also declined to extend any further time for filing my representation before the Competent Authority. This state of deprivation has definitely put me in little disadvantageous position to fully represent my case before the Competent Authority.

26. On 08.10.2007 and 10.10.2007, I also gathered material through moment register from the Office of ACIT CC-2(1) related to my work in the case of Shri A S Chinnaswamy Raju and Shri V Srinivasa Raju. I gave the acknowledgement for the material. I wrote a detailed letter to you on 10.10.2007 not only about the material collected from AO but also explaining my difficulties that there was pressure on AO to send the material as the cases were de-notified. I also gave a reminder on 24.10.2007 for adhering to my request that the material were very crucial till the representation process was not complete. But your good self has been silent to my request till date.

27. I have perused the Reviewing Officer’s letter F.No. ACR/CC-1(1)/CIT(C)/06-07 dated 26.09.2007 substantiating the basis of adverse remarks in my ACR for the year 2006-07. The seven grounds of adverse remarks by the Reviewing Officer in my ACR is based on the material supplied by you, it’s listed as under:

a. Inspection of Assessment in the case of A S Chinnaswamy Raju for the Assessment Year 2003-04.

b. Inspection of Assessment in the case of V S Srinivasa Raju for the Assessment Year 2003-04.

c. Proposal for Reopening of case u/s 147 for M/s Polyflex India Limited for the Assessment Year 2000-01 and 2001-02.

d. Scrutiny report in the case of Srinivasa Trust for the Assessment Year 1999-2000.

e. Scrutiny report in the case of M/s Mysore Fruits Products Limited for the Assessment Year 2001- 2002.

f. Scrutiny report M/s Sabari Trust for the Assessment Year 2003-04.

g. Assessment Order in the case of Shri K S Ramakrishna for the Assessment Year 2003 - 2004 and 2004 – 2005.

28. The Reviewing Officer has taken the above grounds as the basis for making an observation in my ACR but inadvertently omitted to notice the inherent weaknesses in these observations. These are:

a. Inspection of Assessments:

1. The inspections of cases were my work done during the year 2005-06. Whereas the ACR is written for the work done in the year 2006-07.

2. The minor issues such as page marking and placing of papers must be common with all the officers. The Reviewing Officer singling me out on this issue is reflecting partiality.

3. Both the inspections were concluded with an overall rating of ‘VERY GOOD’ by the Reviewing Officer himself. This means all the flaws were taken into consideration while giving an overall rating.

4. It’s a gesture of humility of an Officer and not an approach of casualness that the observations made by the Reviewing Officer is not responded by exposing with the weaknesses in the observation of a superior while inspection of cases. Since the Reviewing Officer has made it an issue, I have also recommended the observations for amendment.

5. The Reviewing Officer did not have any counter comments to my comments offered for inspection. Hence the inspection proceeding was a closed chapter for all practical purpose.

6. The confusions while inspection would have never occurred if the Reviewing Officer would have consulted my immediate boss instead of Shri D K Jha, Addl. CIT, CR-1.

7. Making an adverse observation based on the observation of and Officer other than Reporting Officer at the time of writing an ACR for the work done in the year 2005-06 is not all that fair step.

b. Scrutiny Reports:

1. The process of Scrutiny Reports is an academic exercise. In this column everyone is given freedom to express their views freely. It’s only a learning process. Difference of opinion is not construed as dissent or defiance.

2. Every person in a hierarchy from ITO to Addl. CIT gives their independent views on a related subject with their individual level of understanding. The independent observation of the Officer is of non-revenue implication and should not be held in against when a view is contrary.

3. The CIT by virtue of superior wisdom makes the ultimate choice on the related subject which can be based on the views available on record.

4. During the year 2006-07, I had prepared scrutiny report in cases numbering anywhere between 50-75 and the Reviewing Officer has made observations only in 3 reports.

5. I was always open for learning and fundamentally believed in giving my independent views on a subject. This academic act, the Reviewing Officer considering adversely is not all that fair.

c. Assessment in the case of Shri K S Ramakrishna

1. The Reviewing Officer has referred to the first assessment order for the A.Y 2003-04 were passed in the year 2005-06. But the basic question arises “Why the case needs to be merely mentioned while substantiating the basis at all when the CIT (Central) never commented on the work in the year 2006-07?” It’s only an act of ‘shooting arrows in the dark’ by the Reviewing Officer which is never appreciable and seeing the dignity of the position which one is occupying.

2. If the Reviewing Officer had sought any query on this subject I would’ve personally gone and explained the factual position while passing the assessment order for the A.Y. 2004-05.

3. The Reviewing Officer has also failed to observe that no orders are generally passed without the approval or discussion with the Reporting Officer.

4. The Reviewing Officer is not that fair in raising a pointer only at me when it was always teamwork.

29. As the issues are already raised. Let each issue be examined based on the observation of the Reviewing Officer.

30. The 1^st ground of the adverse remarks, in my ACR for the 3^rd limb, was based on the Inspection of Assessment in the case of A S Chinnaswamy Raju for the Assessment Year 2003-04. The relevant extract of the material is reproduced for your ready reference as under:

2.1 An inspection of the work done by the AO was conducted by me during the financial year. Two cases were taken for this purpose- one which was suggested by the AO and the other was selected by the CIT. The case of Sri A S Chinnaswamy Raju for the asst. year 2003-04 was taken up for inspection as per the AO’s choice. In this case on page 2 of the inspection note, I had made the following observations.

“There’s no evidence in the record to prove that the assessee has gone before the CIT (A). It is also not clear form the file what is happening to the penalty u/s 271(1)(c) which has been initiated by the AO on 31.12.2005 and got barred by limitation on 30.06.2006. The AO may submit a report on this aspect.”

The AO in his comments reported as under.

“The comments of the Hon’ble CIT, Karnataka (Central), Bangalore has been accepted willfully. It was already ascertained orally from the assessee and the office of CIT (A)-Central that the assessee has filed an appeal on 13.07.06(sic). The official communication of appeal from CIT(A) office was received on 16.10.06. Therefore, would like to bring to the notice of Hon’ble CIT(Central) Bangalore that the penalty proceeding u/s 271(1)(c) is not time barred, but kept in abeyance till the matter is decided by the Hon’ble CIT(A).” (emphasis supplied). It is clear from the observations and the comments of the AO that there was no material available on record to show that the penalty proceedings initiated u/s 271(1)(c) were kept in abeyance. Normally, when, penalty proceedings are kept in abeyance if the assessee has filed appeal against the order and makes a request to AO to keep the penalty proceedings in abeyance. Even then, it is the discretion of the AO to keep the penalty proceedings in abeyance or not. No such letter was available on record. Even the official communication from CIT (A) was received on 16.10.2006 i.e. after six months from the date of assessment order when the penalty normally got barred by limitation. In fact, the Addl. CIT, CR-1 who was assisting me in doing the inspection work had asked AO regarding this fact, but the AO did not give any clarification to him and stated that the clarification will be given to the CIT. These facts clearly show the casual approach of the AO. There is no written order passed or noting made in the order sheet to show that the assessee had filed an appeal and the penalty was, therefore kept in abeyance. I may once again emphasize that this was a case offered for inspection.

I had also made the following observations in the inspection note.

“A. The papers in the file are not page marked properly. Some of the papers which are agreement of sale are not even filed properly. It is placed as a loose document in the file. It is improper on the part of the AO.”

This again shows that the AO was casual in his approach in the maintenance of records. A copy of my inspection note is enclosed herewith as Annexure ‘A’.

31. With due humility I state that the Reviewing Officer has given the adverse remark in my ACR by relying on my work for the year 2005-06 and not 2006-07.

32. The Inspection of Assessment in the case of A S Chinnaswamy Raju and in the case of Shri V Srinivasa Raju, for the Assessment Year 2003-04, was the work which was highly appreciated by Shri M L Agarwal, CIT(Central). Shri M L Agarwal had personally communicated to me orally that I was graded ‘OUTSTANDING’ in ACR for year 2005-06.

33. The Reviewing Officer has relied on the Inspection of Assessment in the case of A S Chinnaswamy Raju for the Assessment Year 2003-04 which was a protective assessment. This fact is very clear from the assessment order itself. The Reviewing Officer has not considered the substantive assessment done for the A.Y 2002-03 in the year 2006-07 which was clearly stated in the assessment order.

34. Analysis of the above observation of the Reviewing Officer gets crystallized as under:

a. There is no evidence on record to state whether the assessee has gone for appeal before CIT(A)?

b. The status of penalty initiated u/s 271(1)(C) – Whether time barred or not?

c. There is no written order passed or noting made in the order sheet to show that the assessee had filed an appeal and the penalty was, therefore kept in abeyance. I may once again emphasize that this was a case offered for inspection.

d. The papers in the file are not page marked properly. Some of the papers which are agreement of sale are not even filed properly. It is placed as a loose document in the file. It is improper on the part of the AO.”

e. Shri D K Jha, Addl. CIT, CR-1 who was assisting me in doing the inspection work had asked AO regarding this fact, but the AO did not give any clarification to him and stated that the clarification will be given to the CIT.

f. A copy of my inspection note is enclosed herewith as Annexure ‘A’.

35. In order to explain the 1^st ground of the 3^rd limb about the adverse remark of the Reviewing Officer, I present you a brief background in the case of A S Chinnaswamy Raju for the A.Y 2003-04 as under:

a. The assessee is part of Atria Group who is in the business of hotels, Power projects, builders and developers. It was a regular scrutiny assessment for the A.Y 2003-04 and the return was filed on 31.03.2005.

b. The story in this case- A group of farmers approached the assessee and requested to help them as their land was to be acquired by KIADB. The assessee paid a token sum by entering into an agreement with each farmer. The agreement clearly spelled out that if the assessee gets the property de-notified from KIADB then the farmers will sell their piece of land at an agreed rate to any party which the assessee decides. Till the date of absolute sale, the farmers enjoyed all the rights in land. Hence the assessee acted just like any other broker or a commission agent. In exchange, the assessee received monies for providing various services to the farmers.

c. The assessee never revealed this matter to the department while assessment proceedings. I investigated the matter and gathered a relevant material in the form of a term sheet/memorandum of understanding dtd. 19/10/2001 from M/s WIPRO Limited. The term sheet/memorandum of understanding dtd. 19/10/2001 clearly revealed that the assessee and his family member for the past nine months were already negotiating with M/s Wipro for transferring the lands. This fact was not only suppressed in the supplementary agreement entered with farmers after getting the lands de-notified from KIADB but also to the Income-tax Department by the assessee. The documents also clearly spelled what were the services were to be provided by the assessee to M/s WIPRO while arranging the transfer of land from farmers.

d. The assessee filed the returns by claiming the income from above transaction as long-term capital gains despite the fact that the asset were transferred to M/s Wipro by the farmers and the assessee was a mere ‘confirming party’ for the said transaction. Even in the return of income of farmers it can be seen that the farmers have offered the income as long term capital gain in the year A.Y. 2003-04.

e. The assessee was asked “why the transaction was not reflected as business income but as a long term capital gain when there was no asset which was transferred to M/s WIPRO by the assessee?” Suddenly, during the assessment proceedings, the assessee made a fresh claim to give back the taxes paid as refund for the return filed, by taking a new position that he has sold the rights in land to M/s Wipro, which does not have a cost. Hence, the same is not taxable.

f. The facts in the case- The assessee along with other members in the group (Shri.C.S.Sunder Raju, Smt. Indiramma and Smt. Tejavathi S Raju) entered into agreement to sell with several farmers on 15.07.1998 by paying a token sum of Rs.50,000/- for the land situated at Doddathoguru Village, Begur Hobli, Bangalore South Taluk with survey no.70/1, 70/2, 70/3, 70/4, 84/1, 84/2, 84/3, 84/4. The relevant extract of the agreement to sell at page 5 para 4 is reproduced as under:

“the vendor agrees to hand over the physical possession of the Schedule ‘A’ along with the original title deeds to the purchaser or to his nominee or nominees as the purchaser may direct on receiving the entire sale consideration either on or before the time of execution and registration of the sale deed in the favour of the purchaser or his nominees.

g. The assessee again entered a supplementary agreement with the farmers on 03.10.2001. Page 3 point no. f spells out the intent of the assessee with respect to the land. “Whereas the purchaser has pursuant… pending the completion of the sale in favour of the purchaser or his nominees considering that the said lands in close proximity to the electronic city being set up in the near by area and the said lands after conversion could be offered to industrial houses for industrial purposes provided that the purchaser considers making a suitable enhancement in the sale consideration payable to him.”

h. The term sheet /memorandum of understanding dtd. 19/10/2001 was obtained from M/s Wipro Ltd., is the evidence which shows that the assessee and his family member were already negotiating with M/s Wipro for the past nine months for transferring the lands.

i. On 18.03.2002 the assessee entered into an agreement to sale with M/s. Wipro again as a confirming party for an enhanced consideration. On 17.03.2003 the farmers transferred the land under absolute sale deed to M/s. Wipro and the assessee was again only a confirming party.

j. The assessee while computing the income under the head capital gains had taken the cost of acquisition as the total consideration reflected in the supplementary agreement. The cost was indexed by taking the base year as F.Y.1998-99 despite the fact that the major (80%) consideration to the farmers was paid in the F.Y.2002-03.

k. From the documents produced it is seen the farmers and the assessee had offered the income under the head capital gains in the F.Y.2002-03.

l. The assessee has never reflected the property in the Wealth-tax nor has reflected anytime in their regular returns.

m. The property was never transferred in the name of the assessee but was always owned and enjoyed by the farmers till the property was actually transferred through absolute sale deed in favour of M/s Wipro.

n. Point no. 37 of the assessment order surmised that the income has to be taxed in the A.Y. 2002-03 and not A.Y. 2003-04 as claimed by the assessee. The income actually accrued in financial year 2001-02 and not 2002-03. The assessment for the A.Y 2002-03 was reopened separately.

o. Point no. 38 of the assessment order has clearly mentioned that the assessment of Rs. 3,32,58,944/- under the head business or profession is being assessed on protective basis.

p. At 29 page assessment order was passed order was passed on 30.12.2005 and was served on Shri K N S Ramamohan Rao; the assessee’s authorized representative on 18.01.2006. A notice of demand u/s 156, a penalty notice u/s 271(1)(c), and tear off acknowledgement are part of record, in the assessment folder for the A.Y 2003-04, which are placed at Page no. 457, 458 and 459 respectively.

36. Based on the above facts in this case, I would like to clarify about the observation of Reviewing Officer while conducting inspection in the case of A S Chinnaswamy Raju for the A.Y 2003-04 as under:

a. There is no evidence on record to state whether the assessee has gone for appeal before CIT(A)

1. I had personally enquired from the assessee and the office of CIT (A) and found that the appeal was filed on 13.07.06. Based on my past experience I knew beyond doubt that the assessee has preferred appeal as the case of the assessee was handled by Shri Venkatesan, CA. Even this fact was known to Reporting Officer. Only Form 35 is kept in file as a proof of evidence for the assessee being in appeal. Form-35 was received at my office on 16.10.06 which corresponds with the period of inspection by the Reviewing Officer. Since the file was available at CIT (Central)’s office the Form-35 could not be placed while inspection of assessment in this case.

b. The status of penalty initiated u/s 271(1)(c) – Whether time barred or not?

1. The penalty was not time barred as it was very clear from the record lying in possession of the Reviewing Officer. The assessment order and penalty notice u/s 271(1)(c) were served on 18.01.06. Following this dictum, the penalty time barring date was on 31.07.06 and not 30.06.2006 as pointed out by the Reviewing Officer. This fact is further reiterated with the fact that the assessee has not asked any condonation for delay in filing of appeal before CIT (A). Hence on both grounds the status of penalty was clear and within the limitation of time.

2. Without prejudice, it is to be noted that assessment order was made only on protective basis for the assessment year 2003-04. Therefore, imposition of protective penalty is purely of academic interest and the Reviewing Officer has lost sight of this fact from file.

1. It is a general practice prevalent in the department, that in order to prevent in fructuous demand through penalty proceedings, in all high demand cases where huge additions are made, the cases are kept pending invariably without an order sheet noting. I also emphasize that this case was offered for inspection by me as it was part of outstanding work done in the year 2005-06 based on which my performance was evaluated for the purpose of ACR by the Reviewing Officer in the year 2005-06. The grading is a matter of record which is verifiable.

1. Normally, the pages in assessment records are not marked. The pages in the assessment records are marked whenever the records are sent out of the CIT charge or sent to the outside agencies. Since, the file was needed for the purpose of inspection for my good work by the Reviewing Officer, with bonafide belief the file was sent on “as is where is basis”. I’ve also ascertained form other AO’s at CIT (Central)’s charge about this observation. I’ve found that none of the AO has marked the pages in all the assessment folders.

2. The confidential records are properly marked and serially numbered and are already kept under the safe custody under lock and key. The same procedure was all along followed at my office too.

3. I have taken all the files for representation based on which adverse remarks were made by the Reviewing Officer from the office of DCIT. A letter F.No. TDS 18-1/Confdl/07-08 Dated 10.10.07 was filed at your office. All the files cited by the Reviewing Officer were marked as it has become part of the confidential documents.

4. Page marking of the file has to be done by TA as per ‘Manual of Office Procedure listed at Point 2(d).’ The Reviewing officer was already aware that Shri. Shivprakash was the only TA at my Office whose leave for 1 year was sanctioned by the higher authority. The shortage of staff has been brought to the notice of my Reporting Officer who has mentioned this fact in his monthly DO.

5. With due humility I may point out that these observations are rather on peripheral and less important issue. The Reviewing Officer rather than appreciating my operational constraints has made one of the issues for adverse comments in my ACR for the year 2006-07.

1. The matter was never communicated to me orally or through written means of communication by the office of the Reviewing Officer, Reporting Officer or by the Reviewing Officer himself that Shri DK Jha, Addl. CIT, CR-1 was assisting the Reviewing Officer in the inspection of my Assessment for the year 2005-06. It’s a matter of record which is verifiable.

2. With due respect, I was under the honest and bonafide belief that it is the Reviewing Officer and his office was carrying on the inspection as it’s the core work as per the ACTION PLAN TARGET FOR FINANCIAL YEAR 2006-07 published by CBDT.

3. It is very pertinent for me to abreast at this stage for what actually transpired between me and Shri D K Jha, Addl. CIT, CR-1. The Reviewing Officer had all the rights to summon me and verify the fact about the incident.

4. I have also brought this incident to the notice of CIT (Central) vide letter 25.10.2007 while proposing certain amendments in inspection and scrutiny report. I’m bringing in detail the conversation on verbatim basis which should become part of the record. It becomes more imperative keeping in view the principle of natural justice as the Reviewing Officer has commented about me by only listening to the version of Shri D K Jha, Addl. CIT- CR-1. The incident below was immediately brought to the knowledge of Reporting Officer during the year 2006-07.

Incident No.1	(During the inspection of cases by the Reviewing Officer, Shri DK Jha called at intercom)
D K Jha:	Hari in the case of A S Chinnaswamy Raju for the A.Y 2003-04, what is the status of penalty?
Hari Rao	Sir I’m given to understand that the assessee is in appeal. But the assessment in the case of A S Chinnaswamy Raju for the A.Y 2003-04 is a protective assessment and substantive assessment is in the A.Y. 2002-03.
D K Jha:	You have not concluded the penalty proceedings and you are in deep trouble and you will definitely loose your job if I tell CIT.
Hari Rao	Sir for academic interest, the penalty proceedings u/s 271(1)(c) is also a protective penalty proceedings and the matter is in appeal before the CIT(Appeals) and the penalty proceeding is kept in abeyance till the disposal of appeal then how will I loose my job?
D K Jha:	If I tell the same thing to CIT you will definitely loose your job and you will be giving clarification on this matter.
Hari Rao	Yes sir, I will definitely give the clarification on this matter to CIT.
	I was shocked and disturbed with this incident as I didn’t know why Shri D K Jha was threatening me about my career for no fault of mine? Immediately I brought this matter to the knowledge of Shri Narendra Kumar, Addl. CIT CR-2, who in turn pacified me to ignore this matter.

5. Based on my incident as narrated above, I humbly state that the Reviewing Officer might have been misinformed by Shri D K Jha, as I had clarified the factual position in the case of Shri A S Chinnaswamy Raju to Shri D K Jha, Addl. CIT, CR-1.

6. With due humility I express that I’m not sure about the above incident and the matter still seeks clarification on my future prospects, “Whether the threatening calls on my career were the exclusive views of Shri D K Jha, Addl. CIT, CR-1 or were made by Shri D K Jha, on behalf of the Reviewing Officer?”

f. A copy of my inspection note is enclosed herewith as Annexure ‘A’.

1. Close perusal of the Annexure- ‘A’ will clearly reveal that the Reviewing Officer has accepted my comments in the case without any objections. At page 57 of the Inspection Report at point no. 12 (Counter comments of I O) the Reviewing Officer has stated ‘NO COMMENTS’.

2. Further it is also reaffirmed from page 58 which is the overall certificate under the head ‘D. APPRAISAL’ of the inspection report that the Reviewing Officer had again given no comments to offer for the comments of Officer Reported upon in this case.

3. This is a matter of verifiable record as one of the copies of Inspection Report of the Reviewing Officer is already available with DGIT (Inv), Karnataka & Goa.

4. This issue as a basis can never be a reason for adverse comments in my ACR as the chapter gets closed the moment the IO doesn’t have any Counter comments to offer. Since the Reviewing Officer now has taken up this issue, this issue has again become alive. I have written a letter F.No. TDS 18-1/Insp Repo/07-08 dated: 25.10.07 requesting CIT (Central) to make necessary amendments to inspection report and scrutiny report in the light of explanations offered by me in this respect.

37. From the above inspection in the case of A S Chinnaswamy Raju for the A.Y 2003-04, reasonable facts can be drawn on the 1^st ground of 3^rd limb about the adverse remark of the Reviewing Officer. The remarks of the Reviewing Officer are quite contrary to the facts. A part of the observation of the Reviewing Officer is also an indirect inference about me which was drawn only on the version of Shri D K Jha, Addl. CIT, CR-1. The Reviewing Officer has framed the opinion without verifying the facts from the Officer reported upon. It also brings out clearly the prejudice of the Reviewing Officer and Shri D K Jha, Addl. CIT, CR-1, against me.

38. Shri A K Agarwal, CIT (Central), by terming me as CASUAL despite my untiring effort in this case, is not only being ruthless but also unkind by ignoring and not recognizing my operational constraints.

39. The 2^nd ground about the adverse remarks in my ACR for the 3^rd limb was based on the Inspection of Assessment in the case of V S Srinivasa Raju for the Assessment Year 2003-04. The relevant extract of the material is reproduced for your ready reference as under:

2.2 The other case which was taken up for inspection by me was the case of Sri V. Srinivasa Raju – A.Y. 2003-04. The following observations made by me in this inspection note relate to maintenance of record.

“3. It is seen from the assessee’s letter dated 7.11.2005 that a summon u/s 131 dated 2.11.2005 was issued by the AO for personal attendance of the assessee. The office copy of the summons is not available on record. There is no noting given by the AO on the order sheet for issuing summons u/s 131 for personal attendance of the assessee which is a major lacuna in the record.

4. The order sheet has not been properly maintained. It is found that a page of the order sheet where entry dated 19.12.2005 is placed after the order sheet where noting is dated 17.03.2006. The AO should be more carefully in maintenance of order sheet and it should be properly page marked.

5. The papers in the file are not properly marked.

12. Certain papers filed on 27.01.2006 and 6.2.2006 have been kept in record after the assessment order dated 17.03.2006. The AO should take more care in placing papers on record.”

These observations clearly show that the AO was casual in his approach so far as maintenance of assessment record was concerned.

In this case, the last hearing took place on 17.01.2006 but the assessment order was passed after an in ordinate delay of 2 months, i.e on 17.03.2006. The AO had not collected the statement of affairs of the assessee. There was no lists of assets available on the record. It was not clear from the records whether any appeal had been filed before the CIT(A) or not. All these facts were mentioned by me in the inspection note. The AO had given the following comments.

“The Comments of the Hon’ble CIT (Central) is noted and accepted. The assessee has failed to furnish the details of assets. The list of assets (immovable and movables) has been collected and have been attached. The debtors have been attached. Proceedings u/s 281B has been proposed. Huge sums have been collected. The penalty proceedings have been kept in abeyance as the assessee has filed an appeal before CIT(A) on 27.04.06 The matter is kept in abeyance till the disposal of appeal.” (emphasis supplied)

From the above comments of the AO, it is clear that the list of assets were collected afterwards. The AO has tried to justify the fact of not collecting the details of assets by saying that the assessee has failed to furnish the details of assets. The AO has all the authority under the Act to collect whatever information which he desires. Also, the proceedings u/s 281B can be taken only during the pendency of proceedings for assessment.. The AO , without reading the section, has made comments in a casual manner that proceedings u/s 281B has been proposed. There is nothing in the record to show that the penalty proceedings had been consciously kept in abeyance. All these facts show the casualness of the approach of the Officer towards work. A copy of inspection note in case of Sri V Srinivasa Raju is enclosed herewith as Annexure ‘B’.

40. With due humility I state that the Reviewing Officer has again given the adverse remark in my ACR by relying on my work for the year 2005-06 and not 2006-07.

41. The Reviewing has not at all considered the investigations and the efforts of recovery made in this case which were marked as Investigation folder (Vol. I-VI) and Recovery folder (1-3).

42. The Inspection of Assessment in the case of Shri V Srinivasa Raju and in the case of A S Chinnaswamy Raju for the Assessment Year 2003-04 was the work which were appreciated by Shri M L Agarwal, CIT(Central) who had personally communicated to me orally that I was graded ‘OUTSTANDING’ in ACR for year 2005-06.

43. Analysis of the above observation of the Reviewing Officer gets crystallized as under:

a. It is seen from the assessee’s letter dated 7.11.2005 that a summon u/s 131 dated 2.11.2005 was issued by the AO for personal attendance of the assessee. The office copy of the summons is not available on record. There is no noting given by the AO on the order sheet for issuing summons u/s 131 for personal attendance of the assessee which is a major lacuna in the record.

b. The order sheet has not been properly maintained. It is found that a page of the order sheet where entry dated 19.12.2005 is placed after the order sheet where noting is dated 17.03.2006. The AO should be more carefully in maintenance of order sheet and it should be properly page marked.Certain papers filed on 27.01.2006 and 6.2.2006 have been kept in record after the assessment order dated 17.03.2006. The AO should take more care in placing papers on record.”

c. The last hearing took place on 17.01.2006 but the assessment order was passed after an in ordinate delay of 2 months, i.e on 17.03.2006

d. The AO had not collected the statement of affairs of the assessee. There was no lists of assets available on the record.

e. It was not clear from the records whether any appeal had been filed before the CIT(A) or not.

f. All these facts were mentioned by me in the inspection note. The AO had given the following comments.

g. From the above comments of the AO, it is clear that the list of assets were collected afterwards. The AO has tried to justify the fact of not collecting the details of assets by saying that the assessee has failed to furnish the details of assets. The AO has all the authority under the Act to collect whatever information which he desires. Also, the proceedings u/s 281B can be taken only during the pendency of proceedings for assessment.. The AO , without reading the section, has made comments in a casual manner that proceedings u/s 281B has been proposed. There is nothing in the record to show that the penalty proceedings had been consciously kept in abeyance. All these facts show the casualness of the approach of the Officer towards work.

h. A copy of inspection note in case of Sri V Srinivasa Raju is enclosed herewith as Annexure ‘B’.

44. In order to explain the 2^nd ground of the 3^rd limb about the adverse remark of the Reviewing Officer, I present you a brief background in the case of V Srinivasa Raju for the A.Y 2003-04. Though the assessment is for the A.Y. 2003-04 the actual story began in the A.Y 2005-06 which is reflected as under:

a. The assessee Shri V Srinivasa Raju is a real estate agent.

b. My predecessor selected the case of Shri V Srinivasa Raju in a routine manner for the A.Y 2003-04, as all the cases in Central Circle were compulsory scrutiny cases.

c. I was perusing the return for the A.Y. 05-06 and found something very unusual in the return of income of Shri V Srinivasa Raju. The assessee had filed the return for the A.Y. 05-06 on 20.05.2006 declaring a total income of Rs. 42,70,000/-. It was a statutory audit case 44AB being filed in the month of May than in October.

d. While going through the computation sheet I detected that the assessee had declared Profit from Joint Venture at Rs. 40,00,000/- under the head ‘Income from Business.’ The assessee did not adduce any audit report.

e. Discreet market enquiries revealed that the assessee has a piece of land admeasuring to 10Acres (Approx.). In this property the assessee has already completed a Joint Development Agreement (JDA) named as “Shriram Shrishti” in 3 acres of land with M/s Shriram Properties Private Limited. The consideration received was between Rs. 8-10 Crores. The assessee also entered JDA with M/s Siroyah Constructions in the balance 7 acres. Information gathered was that the assessee had already received an advance of Rs. 5 crores. The share of assessee was anywhere between Rs. 60-80 crores.

f. I immediately brought the information to the knowledge of Reporting Officer. Immediately notices were issued by selecting the case for scrutiny. Since the case for A.Y 2003-04 was already in scrutiny and was in the zone of time barring simultaneous recording of note sheet writing was taking between A.Y. 2003-04 and A.Y. 2005-06.

g. Summons were issued 02.11.2005 to the following persons to appear on 07.11.2005 at 11.30 am.

1. Shri V Srinivasa Raju (herein afterwards will be referred as VSR) (Page 38 of the assessment folder for the A.Y 2005-06)

2. Smt Revathi Raju (Wife of VSR) (Page 39 of the assessment folder for the A.Y 2005-06)

3. Shri Gautam Varad (Son of VSR) (Page 40 of the assessment folder for the A.Y 2005-06)

4. Shri Shailesh Siroyah (M D of M/s Siroyah Constructions) ((Page 98 of the assessment folder for the A.Y 2005-06)

5. Shri M Murali ( Executive Head, M/s Shriram Properties Private Limited) (Page 42 of the assessment folder for the A.Y 2005-06)

6. In view of huge pending work, separate investigation folder was opened (At the end of the case Investigation folders had VI volumes). There is a clear note on the order sheet in the Investigation folder Vol. I by Shri A N Suri, ITI (now retired) about the issue of summons for the A.Y 2003-04. From the perusal of summons u/s 131 it can be clearly seen that the persons were directed for personal appearance. Since the A.Y 2005-06 was the focal point the note sheet writings were made in the A.Y 2005-06 than 2003-04.

h. This fact can be reconfirmed in following ways:

1. The first order sheet noting in the case of VSR is in the assessment folder of A.Y 2005-06 and not A.Y 2003-04.

2. The summons u/s 131 for personal appearance has been placed in file for the A.Y. 2005-06 and not A.Y. 2003-04. It can be further verified from the assessment folder for the A.Y. 2005-06 that Shri M Murali, Shri V Srinivasa Raju and Shri Gautham Varad appeared on 22.11.2006 and detailed note sheet writing is there in the assessment folder for the A.Y. 2005-06. (Point no. 1 to 5 between Pages 1 to 5 of the order sheet noting.)

3. The same fact is further certified in assessment folder for the A.Y. 2003-04 by Shri K N Rama Mohan Rao vide order sheet noting dated 04/01/06 (Point no. 7 at Page 5 of the order sheet noting.)

4. The statement of Shri Shailesh Siroyah was recorded u/s 131 on 07.11.05 (Page 84 of the Investigation Folder Vol II).

5. From the above instances the analogy can clearly be drawn that the proceedings were active more for A.Y 2005-06 than A.Y 2003-04. The core issue of assessment was spread between the A.Y 2003-04 to 2006-07.

i. The assessee has been totally non-cooperative throughout the proceedings. The assessee filed 6 revised returns without submitting any detail for expenditure on land, which was rejected. The details of actual expenditure on land were culled out from the search folder from the earlier years.

j. The assessee rather than concluding the assessment by furnishing the information resorted to unfair means which was never encouraged by me. I had brought this incident to the knowledge of Reporting Officer during the year 2005-06.

k. My efforts in the assessment will be more visible if the earlier years records are perused based on the quantum of tax payments made in the case of assessee.

45. The Reviewing Officer has made the inspection in the case of Shri V Srinivasa Raju for the A.Y 2003-04 without considering the all the materials collected and compiled as Investigation/Recovery folders. The Reporting Officer had the full knowledge of my overall efforts in this case. It can be seen from the table below that the maximum data has been gathered in the A.Y. 2005-06 and not 2003-04. The data is tabulated in order to view the chronology of the investigations done in the case of Shri V Srinivasa Raju. This data was tabulated only for making representation before you. The efforts in this case are as under:

Sl. no	Date	Description	Person	Page No	Folder
1	14.10.05	Issue of 142(1) notice asking Books/Bank Property details	V Srinivase Raju	9	A.Y 05-06
2	25.11.05	Bank Statement from ING	V Srinivase Raju	29	A.Y 05-06
3	25.11.06	Bank Statement from Indian Bank	V Srinivase Raju	33	A.Y 05-06
4	25.11.07	Bank Statement from Syndicate Bank	Gautam Varad	37	A.Y 05-06
5	15.12.07	Hearing notice to VSR	V Srinivase Raju	35	A.Y 05-06
6	02.11.05	Summons u/s 131	Gautam Varad	38	A.Y 05-06
7	02.11.05	Summons u/s 131	V Srinivase Raju	39	A.Y 05-06
8	02.11.05	Summons u/s 131	Revathi Raju	40	A.Y 05-06
9	02.11.05	Summons u/s 131	Sriram Properties	42	A.Y 05-06
10	19.12.05	Statement recorded u/s 131	Madhu Gowda	44	A.Y 05-06
11	21.12.05	Statement recorded u/s 131	M A Subba Raju	58	A.Y 05-06
12	21.12.05	Statement recorded u/s 131	Mahalinga Bhat	62	A.Y 05-06
13	15.12.05	Summons u/s 131	V Kempashetty	85	A.Y 05-06
14	15.12.05	Summons u/s 131	Lakshmanna	86	A.Y 05-06
15	15.12.05	Summons u/s 131	Chikkana	87	A.Y 05-06
16	15.12.05	Summons u/s 131	Srinivas	88	A.Y 05-06
17	15.12.05	Summons u/s 131	D Venkatachala	89	A.Y 05-06
18	15.12.05	Summons u/s 131	V Ram das	90	A.Y 05-06
19	15.12.05	Summons u/s 131	V Narayan Swamy	91	A.Y 05-06
20	15.12.05	Summons u/s 131	Smt. Shardamma	92	A.Y 05-06
21	15.12.05	Summons u/s 131	SRI Ramapriya	93	A.Y 05-06
22	15.12.05	Summons u/s 131	Kirtichakravarty	94	A.Y 05-06
23	15.12.05	Summons u/s 131	Smt Sarasawati Kumar	95	A.Y 05-06
24	15.12.05	Summons u/s 131	Smt Bindu Murthy	96	A.Y 05-06
25	02.11.05	Summons u/s 131	Shailesh Siroyah	98	A.Y 05-06
26	21.06.06	Summons u/s 131	V Srinivase Raju	119	A.Y 05-06
27	26.06.06	Statement recorded u/s 131Bank Account, Asst Details etc.	V Srinivasa Raju	121	A.Y 05-06
28	09.08.06	Letter- Failure to furnish the vochures	V Srinivasa Raju	130	A.Y 05-06
29	09.08.06	Summons u/s 131	V Srinivasa Raju	135	A.Y 05-06
30	17.08.06	Detailed Letter- Assessee's obstructing the proceedings	V Srinivasa Raju	160	A.Y 05-06
31	22.08.06	Summons u/s 131	H M Venktesh	189	A.Y 05-06
32	22.08.06	Statement recorded u/s 131	H M Venktesh	191	A.Y 05-06
33	28.08.06	Letter to ITO Ward 11(2) fo Protective Assessment	Gautam Varad	219	A.Y 05-06
34	07.08.06	I Revised Return	V Srinivasa Raju	260	A.Y 05-06
35	08.08.06	II Revised Return	V Srinivasa Raju	270	A.Y 05-06
36	10.08.06	III Revised Return	V Srinivasa Raju	280	A.Y 05-06
37	21.08.06	IV Revised Return	V Srinivasa Raju	186	A.Y 05-06
38	04.09.06	IV Revised Return	V Srinivasa Raju	250	A.Y 05-06
39	29.08.06	V Revised Return	V Srinivasa Raju	231	A.Y 05-06
40	04.09.06	VI Revised Return	V Srinivasa Raju	289	A.Y 05-06
41	12.09.06	Letter for prod of evidence	V Srinivasa Raju	295	A.Y 05-06
42	18.09.06	Letter of Adjournment	V Srinivasa Raju	297	A.Y 05-06
43	28.09.06	143(3) order served on 06.10.06	V Srinivasa Raju	321	A.Y 05-06
44	28.09.07	Penalty notice served on 06.10.07	V Srinivasa Raju	322	A.Y 05-06
45	28.09.08	Demand Notice served on 06.10.08	V Srinivasa Raju	323	A.Y 05-06
46	08.08.07	Hearing notice for Appeal from CIT(A)	V Srinivasa Raju	334	A.Y 05-06
47	03.02.05	Notice u/s 143(2) by Ann.K DCIT-CC 2(1)	V Srinivasa Raju	8	A.Y 04-05
48	25.11.05	Summons u/s 131	Indian Bank	13	A.Y 04-05
49	11.07.05	Hearing notice	V Srinivasa Raju	10	A.Y 04-05
50	25.11.05	Summons u/s 131	ING Vysya Bank	14A	A.Y 04-05
51	25.11.05	Summons u/s 131	Syndicate Bank	14	A.Y 04-05
52	12.12.05	Summons u/s 131	K Bhopal	196	A.Y 04-05
53	12.12.05	Summons u/s 131	K Mohan	197	A.Y 04-05
54	12.12.05	Summons u/s 131	Madesha	198	A.Y 04-05
55	12.12.05	Summons u/s 131	Smt Sobha	198A	A.Y 04-05
56	12.12.05	Summons u/s 131	Manjesha	199	A.Y 04-05
57	12.12.05	Summons u/s 131	Ambika	200	A.Y 04-05
58	12.12.05	Summons u/s 131	Neelima	201	A.Y 04-05
59	12.12.05	Summons u/s 131	Nagarathna	207	A.Y 04-05
60	12.12.05	Summons u/s 131	H B Usha	208A	A.Y 04-05
61	12.12.05	Summons u/s 131	H B Dayananda	208	A.Y 04-05
62	12.12.05	Summons u/s 131	H B Chidananda	209	A.Y 04-05
63	12.12.05	Summons u/s 131	HB Sudhaka	210	A.Y 04-05
64	12.12.05	Summons u/s 131	H B Srinivas	211	A.Y 04-05
65	12.12.05	Summons u/s 131	H B Somshekar	212	A.Y 04-05
66	12.12.05	Summons u/s 131	H B Shivananda	213	A.Y 04-05
67	12.12.05	Summons u/s 131	K Madhugowda	222	A.Y 04-05
68	12.12.05	Summons u/s 131	Shubha	223	A.Y 04-05
69	12.12.05	Summons u/s 131	B Prathap	224	A.Y 04-05
70	12.12.05	Summons u/s 131	B Ramesh	225	A.Y 04-05
71	12.12.05	Summons u/s 131	B Kumar	226	A.Y 04-05
72	12.12.05	Summons u/s 131	B Babu	227	A.Y 04-05
73	12.12.05	Summons u/s 131	B Madhu	228	A.Y 04-05
74	21.06.06	Summons u/s 131	V Srinivasa Raju	229	A.Y 04-05
75	29.06.06	Proposal u/s 148	V Srinivasa Raju	2	A.Y 02-03
76	12.07.06	Noticel u/s 148	V Srinivasa Raju	4	A.Y 02-03
77	26.10.05	Notice u/s 143(2) by Ann.K DCIT-CC 2(1)	V Srinivasa Raju	6	A.Y. 03-04
78	23.12.05	Letter seeking information	V Srinivasa Raju	9	A.Y. 03-04
79	17.03.06	Assessment order u/s 143(3)	V Srinivasa Raju	42	A.Y. 03-04
80	07.11.05	Statement recorded u/s 131	Shailesh Siroyah	84	Inv. Vol II
81	29.11.05	Bank Statement Indian Bank	V Srinivasa Raju	132	Inv. Vol II
82	20.03.06	Letter u/s 281 Shailesh Siroyah	V Srinivasa Raju	2	Rec. Proc-I
83	03.07.06	Notice u/s 226(3) Shailesh Siroyah	V Srinivasa Raju	4	Rec. Proc-I
84	03.07.06	Notice u/s 226(3) Union Bank of India	V Srinivasa Raju	6	Rec. Proc-I
85	03.07.06	Notice u/s 226(3) HSBC	V Srinivasa Raju	8	Rec. Proc-I
86	03.07.06	Notice u/s 226(3) Indian Bank	V Srinivasa Raju	10	Rec. Proc-I
87	06.07.06	Notice u/s 226(3) Unnati Projects	V Srinivasa Raju	12	Rec. Proc-I
88	07.07.06	Meager amount Collected from HSBC	V Srinivasa Raju	38	Rec. Proc-I
89	08.07.06	Notice u/s 226(3 Collected from UBI	V Srinivasa Raju	39	Rec. Proc-I
90	11.07.06	Notice u/s 226(3) HSBC	V Srinivasa Raju	40	Rec. Proc-I
91	17.07.06	Notice u/s 226(3) Unnati Projects	V Srinivasa Raju	41	Rec. Proc-I
92	09.08.06	Notice u/s 226(3) Indian Bank	V Srinivasa Raju	45	Rec. Proc-I
93	09.08.06	Letter to Siroyah Constructions	V Srinivasa Raju	49	Rec. Proc-I
94	07.07.06	Inspectors Report	V Srinivasa Raju	50	Rec. Proc-I
95	11.08.06	281B Ist Proposal	V Srinivasa Raju	2	Rec. Proc-II
96	12.09.06	281B 2nd Proposal	V Srinivasa Raju	6	Rec. Proc-II
97	17.11.06	Rejection of Approval	Addl CIT Letter based on CIT's Letter	19	Rec. Proc-II
98	17.11.06	Drawing of certificate to	TRO	23	Rec. Proc-II

46. Based on the above fact I would like to clarify the observation of Reviewing Officer while inspection in the case of V Srinivasa Raju for the A.Y 2003-04 as under:

1. The Reviewing Officers observations are quite contrary to fact stated at PARA 38 & 39 of this letter. The Reviewing Officer has ignored to go through the Investigation/Recovery folders. This fact was also known to the Reporting Officer.

2. The personal attendance of the assessee is not written in order sheet noting but striking out the relevant column in the summons u/s 131 vide ITNS-25. The same can be verified from the carbon copy placed in file.

b. The order sheet has not been properly maintained. It is found that a page of the order sheet where entry dated 19.12.2005 is placed after the order sheet where noting is dated 17.03.2006. The AO should be more carefully in maintenance of order sheet and it should be properly page marked. Certain papers filed on 27.01.2006 and 6.2.2006 have been kept in record after the assessment order dated 17.03.2006. The AO should take more care in placing papers on record.”

1. The Reviewing Officer was justified while making this observation only when the entire sanctioned strength of manpower was given to my office. All the crucial material are very much part of the record. There are possibilities of small slippage due to shortage of manpower.

2. It needs to be mentioned here that the maintenance of records and filing of papers is the work of TA as per ‘Manual of Office Procedure listed at Point 2(d).’ The Reviewing officer was already aware that Shri. Shivprakash was the only TA at my Office whose leave for 1 year was sanctioned by the higher authority. The shortage of staff has been brought to the notice by the Reporting Officer in his monthly DO.

c. The last hearing took place on 17.01.2006 but the assessment order was passed after an in ordinate delay of 2 months, i.e. on 17.03.2006.

1. As it was a huge demand case where assessments were involving A.Y 2003-04 to 2006-07 all the necessary precautions were taken. The first assessment order would’ve definitely become a benchmark for the rest of the cases. Hence, two months time was normal but not at all an inordinate in the case of a litigant assessee and this position can be verified with all other AO’s..

2. It’s a time consuming process when voluminous enquiries were to be done. It is a fact known all across the department including the Reviewing Officer that cases involving huge demands needs due care.

3. Cutting across all lines, it’s a known fact that huge demand cases need drafting, redrafting and vetting. These factors are totally unavoidable. It becomes more crucial in the case of non-cooperative assessee’s.

4. Without prejudiced to the above, CIT (Central) has totally lost sight of the fact at Point no. 8 to 10 of the assessment order for the A.Y 2003-04 between Pages 3 to 8 of the assessment order it is clearly mentioned that the assessment order for the year 2003-04 was based on the facts collected for the A.Y 2005-06. It was exhaustive order with legal complications, based on the mathematical model which I had developed. The Reporting Officer had not only approved the method but also appreciated the model.

d. The AO had not collected the statement of affairs of the assessee. There was no lists of assets available on the record.

1. With due respect to the Reviewing Officer, the observation is not true and the CIT (Central) has totally ignored my efforts made during the assessment proceedings which have been mentioned at PARA 38 and 39 of this letter.

2. The assessment proceeding for the A.Y 2003-04 was time barring on 31.03.2006. Therefore, the assessment order was passed on 17.03.2006. Though the assessment proceedings for the A.Y 2003-04 got concluded, the A.Y 2004-05 and A.Y 2005-06 were still in progress. The details were collected after great efforts and first proposal u/s 281B was initiated on 11.08.2006.

3. With due respect, the Reviewing Officer could not have appreciated my efforts while inspection of the case without ever going through the Recovery folder maintained by me or discussing this matter with the Reporting Officer who had the total knowledge of the case.

e. It was not clear from the records whether any appeal had been filed before the CIT (A) or not.

1. I had personally enquired from the assessee and the office of CIT (A) and found that the appeal was filed on 27.04.06. Based on my past experience I knew beyond doubt that the assessee has preferred appeal as the case of the assessee was handled by Shri Venkatesan, CA. Even this fact was known to Reporting Officer.

f. All these facts were mentioned by me in the inspection note. The AO had given the following comments.

From the above comments of the AO, it is clear that the list of assets were collected afterwards. The AO has tried to justify the fact of not collecting the details of assets by saying that the assessee has failed to furnish the details of assets. The AO has all the authority under the Act to collect whatever information which he desires. Also, the proceedings u/s 281B can be taken only during the pendency of proceedings for assessment. The AO, without reading the section, has made comments in a casual manner that proceedings u/s 281B has been proposed. There is nothing in the record to show that the penalty proceedings had been consciously kept in abeyance. All these facts show the casualness of the approach of the Officer towards work.

1. Firstly, the Reviewing Officer has made a factual error while reproducing my comments. I would like to alter my comments correctly. Hence, “Huge sums have been collected.” should read as “Meager sums have been collected.”

2. The list of movable and immovable assets was collected during the assessment proceedings of A.Y 2005-06. The sequence of events at PARA 38 & 39 clearly shows what led to various investigations conducted in this case.

3. With due humility to the Reviewing Officer I would like to express that in the assessment order for the A.Y 2003-04 it is very clear that all major information were collected in the A.Y. 2005-06. The Reviewing Officer would have appreciated my efforts if the folder for the A.Y 2005-06 would have been taken into consideration.

4. Without prejudice I would like to mention that the Reviewing Officer’s inspection in the case of Shri V Srinivasa Raju has ignored the 6 volumes of Investigation folders developed by me. Hence, the comment that initiative for recovery and the papers were placed later is based on half truth.

5. With due respect, the Reviewing Officer has lost sight of my initiative taken in this case. In the interest of revenue, I had also suggested that a protective assessment be made in the hands of Shri Gautham Varad (Son of VSR) by writing a letter to ITO Ward 8(2). The letter is reproduced as under:

28.08.06

Letter to ITO Ward 11(2) fo Protective Assessment

Gautam Varad

219

A.Y 05-06

No.ATR/DCIT/CC-2(1)/06-07 Office of the

Deputy Commissioner of Income-tax

Central Circle 2(1), Bangalore.

Dated: 28/08/2006

The Income-tax Officer

Ward 8(2)

Malleswaram

Bangalore.

Sir,

Sub: Protective assessment in the case of Shri Gautham

S Varad for the A.Y.2002-03, 2003-04, 2004-05,

2005-06 & 2006-07 - reg.

* * * *

During the course of assessment proceedings of Shri V Srinivasa Raju for the assessment year 2005-06 it was found that Shri Gautham S Varad had entered into a Joint Development Agreement with M/s Shriram Properties Pvt. Ltd for building flats for sale at Hebbal, Bangalore. As on date around Rs.8.77 crores have been received from project Shriram Shristi built by the venture partner M/s Shriram Properties Pvt. Ltd.

It was found from the Absolute Sale Deeds furnished by Shri V Srinivasa Raju that in the Financial year 2000-01 and 2001-02 Shri Gautham S Varad had purchased 1,23,057 sq.ft. of land in Hebbal Village for project Shriram Shristi, from GPA holder Shri V Srinivasa Raju at a cost of Rs.42,87,500/-. The entire payment was made in cash. For the F.Y.2000-01 cost of land purchased in cash was Rs.19,50,000/- and for the F.Y.2001-02 Rs.23,37,500/-.

Though the substantive assessment has been made in the hands of Shri V Srinivasa Raju, protective assessment to be initiated in the interest of Revenue as the above property though Shri V Srinivasa Raju is the defacto owner but the owner of the asset as per documents is Shri Gautham S Varad. A Copy of assessment order for the A.Y.2003-04 is being annexed which would give the greater insight in the entire episode of the facts in this case. Therefore, investigation may also be done at your end in order to know the source of cash for purchase of the above property. Furthermore, ascertain whether Shri Gautham S Varad has declared the above property in the Wealth-tax returns?

Shri Gautham S Varad was summoned u/s 131. On 22.11.2005 Shri Gautham S Varad stated that the properties though were in his name but actually belongs to his father Shri V Srinivasa Raju. Since Shri V Srinivasa Raju was holding the property under Agreement to sell backed by General Power of Attorney could not transfer the property again in the name of Shri V Srinivasa Raju. Therefore, for business convenience the property was registered in the name of his son.

Shri Gautham S Varad has also entered into another Joint Development Agreement with M/s Siroya Constructions. On 9.12.2003 Shri Gautham S Varad had purchased 1 acre and 7½ guntas of land for a consideration of Rs.25,31,250/- in cash from Shri V Srinivasa Raju. Similar line of investigation done for project Shriram Shristi can also be taken up in the case of project jointly being done with M/s Siroya Constructions.

An Annexure of property furnishing the details of absolute sale deed in the nutshell is being annexed for your ready reference. You are free to interact on this case with me and I will provide all the necessary assistance needed for bringing the case to finality.

This is for your information and necessary action.

Sd/-

(S.S. HARI RAO)

Deputy Commissioner of Income-tax

Encl: As below: Central Circle 2(1), Bangalore.

a. Annexure of Property statement (a) & (b)

b. Extract of Statement of land in Hebbal

c. Extract of receipts from Project Shristi

d. A copy of the assessment order of Shri V Srinivasa Raju for the A.Y.2003-04.

Copy to:

1. The Addl.Commissioner of Income-tax, Central Range-2, Bangalore.

2. The Addl.Commissioner of Income-tax, Range-8, Bangalore.

3. Shri Gautham S Varad, No.46/D, Fairfield Layout, Race Course Road, Bangalore-01.

4. Shri V Srinivasa Raju, No.12, 10^th Main, RMV Extension, Bangalore-80.

a) Annexure of Property Statement for Project Shriram Shristi

Date of sale deed	Purchaser	Seller	Amount (in Rs.)	Mode of Payment	F.Y.	A.Y.
02/03/01	Gautham S Varad	Madhu Gowda Group GPA holder VSR	487500	Cash	00-01		01-02
02/03/01	- do -	- do -	487500	- do -	00-01		01-02
02/03/01	- do -	- do -	487500	- do -	00-01		01-02
02/03/01	- do -	- do -	487500	- do -	00-01		01-02
19/04/01	- do -	Venkatachala group GPA holder VSR	487500	- do -	01-02		02-03
19/04/01	- do -	Venkatachala group GPA holder VSR	487500	- do -	01-02		02-03
19/04/01	- do -	Venkatachala group GPA holder VSR	487500	- do -	01-02		02-03
19/04/01	- do -	- do -	487500	- do -	01-02		02-03
19/04/01	- do -	- do -	337500	- do -	01-02		02-03

6. From the above fact it is clear that my efforts have been completely ignored by Shri A K Agarwal, CIT (Central), which were taken in the interest of revenue. I’m bringing before your good self some more details relating to various hardships faced by my team while making efforts for collecting details of assets in this case. The Inspector’s Report and subsequent letter to Shri V Srinivasa Raju exhibits the assessee’s behaviour towards Government Officials and Government proceedings:

07.07.06

Inspectors Report

V Srinivasa Raju

Rec. Proc-I

Inspectors Report

On 7^th July 2006, I visited the premises of M/s Unnathi Projects Ltd., 10^th Floor, Tower Block, Unity Building, Bangalore which was as per the directions of the Dy.Commissioner of Income-tax, Central Circle 2(1), Bangalore for serving a notice u/s 226(3), dtd.07/07/2006 addressed to M/s Unnathi Projects Ltd. with regard to recovery proceedings of Shri V Srinivasa Raju.

When I entered the premises Shri V Srinivasa Raju one of the Directors was in the office and he received the notice u/s 226(3) and gave acknowledgement at that time Shri V Srinivasa Raju said that being the assessee himself he cannot receive the notice on behalf of M/s Unnathi Projects and he asked one of the authorized signatory to accept the notice u/s 226(3) under stamp and seal. The same is enclosed. While collecting the other details of M/s Unnathi Projects as per the directions of DCIT, CC-2(1), Bangalore, I had to wait in the above office for about 20 minutes. During this time Shri Srinivasa Raju stated that he has seen many officers of Income-tax Department. The present DCIT is the 7^th Officer is seeing and said how to deal with the officer. He also said that the present DCIT is only person who has sent an inspector to his office. Till now no inspector or official of the Income-tax Department has ever entered in his business premises. After serving the notice I took the details and left the office of M/s Unnathi Projects Pvt. Ltd.

Submitted Sir,

Sd/-

Bangalore (MALINI N)

Dated: 07/07/2006 Income-tax Inspector

17.08.06

Detailed Letter- Assessee's obstructing the proceedings

V Srinivasa Raju

160

A.Y 05-06

No.ATR-13/DCIT/CC-2(1)/06-07 Office of the

Deputy Commissioner of Income-tax

Central Circle 2(1), IV Floor

C R Buildings Annexe, Queen’s Road

Bangalore – 560 001.

Dated: 17/08/2006

Shri V Srinivasa Raju

No.12, 10^th Main

RMV Extension

Bangalore.

Sir,

Sub: Assessment Proceedings for the A.Ys. 2004-05

and 2005-06 – reg.

Ref: Your letters dtd.11.08.2006

* * * * *

The scrutiny proceedings u/s 143(3) is in progress and your case has been under discussion from the month of November 2005. From past 10 months time you have been given several opportunities to furnish the proof of expenditure which was presented by you as an extract on 22.11.2005. Till date other than self made cash vouchers for land purchase and other land documents you have failed to furnish even a single evidence for expenditure claimed by you.

I would like to remind you that it’s only due to failure of non-furnishing of evidence despite several opportunities that the Department was left with no choice but to issue summons u/s 131 on 09/08/2006. I have gone through your letter dated 11.0802006 wherein you have taken the plea that you are suffering from tooth ache and also recuperating from by-pass surgery.

You have sought several adjournments under the pretext that books will be produced before us and also have failed on all the counts. This, itself displays the delay tactics in the assessment proceedings followed by you. When you were told to appear for concluding the assessment proceedings on 28.07.2006, it was learnt from you and your AR Shri K N Rama Mohan Rao, C.A that you were on a personal or business trip to Delhi. It was also learnt that you are also regularly attending your offices. Keeping this fact in view and also taking shelter behind your ill health for not appearing before me for scrutiny proceedings tantamount to deliberate hampering of business of Government of India. If keeping the ill health you can travel to Delhi and back which is more than 4000 Kms cannot be sufficient reason for taking a plea of non-compliance to summons. Our office is situated exactly at the centre, that is, between your residence and your office. If keeping ill health you can attend your office regularly also can travel long distance, then you can always attend the proceedings initiated by the Government of India as it is your national duty. I find no reason to appreciate your claim of ill health and non-compliance to summons and hence your reason vide letter dated 11.08.2006 for non-compliance to Summons u/s 131 is rejected. You are hereby directed to explain as a show-cause is being issued asking you why penalty u/s 272(A)(c) should not be initiated against you?

In order to be courteous Ms. Malini, Inspector of Income-tax, had enquired from you on your cell phone that a letter and summons was to be served on you as per your convenience. You had intimated Ms. Malini to visit the address at 3.00 pm. It was reliably learnt that you were not available at the premises. I had given the direction to paste the summons through ‘service by affixture. The same matter was also briefed to my superior. Your allegation that Ms. Malini had introduced as bank employee to gain entrance is totally false and baseless as she directly interacted with the servant maid at the above address and also your wife Smt. Revathi Raju. Your baseless allegation shows your attitude to divert the official proceedings by following personal attacks. The incident in the next paragraph will bring in light your behavior with a Government servant.

Ms Malini had visited M/s Unnathi Projects Pvt. Limited to serve notice u/s 226(3) for collection of demand. Your indifferent attitude and personal attack on me was brought to my notice by Ms. Malini through an “Inspectors Report”. The report clearly brings out that you have been finding ways and means to divert the Government proceedings. I’ve not given importance to the issue till date and kept the issue aside. Since you have launched the personal attack on me and my team I have no choice but to bring it on our official record. Your allegations on the entire team of this office is because we are not singing to your tunes and you are not finding any respite in assessment of true income and payment of taxes. Your allegation does not bear any weight as the entire episode expresses in itself the true story.

During the course of assessment proceedings the authorized representative accepted orally that income from Project Shrishti will be more than Rs. 2.5 Crores in the F.Y 2005-06 as all the expenditure have already been claimed prior to F.Y.2005-06. If this is the fact, then, why no advance tax/self assessment tax has been paid for the income so arrived? It was also discovered during the scrutiny preceding that in the F.Y 2005-06 you have advanced loan for more than Rs. 3 Crores to M/s Unnathi Projects Pvt. Limited, a company in which you have controlling stakes. A demand has already been raised for the A.Y. 2003-04 and you have again defaulted on payment of taxes. The above fact reveals your attitude for payment of taxes which are due to Government of India. If you give more importance to your personal needs more than the taxes due to Government then the Government of India has no choice but to initiate coercive mode to collect taxes due from you.

During the course of assessment proceedings your authorized representative has been briefed thoroughly why the cost of land has been restricted. You have been holding the piece of land on which project Shristi was built under Agreement to sell (ATS) backed by General Power of Attorney (GPA). Under ATS the cost of land from the land owner has been clearly specified in the ATS. Further more, the same land has been registered under Absolute Sale Deed in the office of Sub-Registrar, Government of Karnataka. The document for cost of land which is to be accepted is the cost as certified by the Government of Karnataka. The cost of land certified by the Government of Karnataka is much more than ATS backed by GPA. Any amount paid over and above through self made cash vouchers cannot be accepted for the cost of land therefore, the cost of land has to be legally restricted to cost certified by the Government of Karnataka.

Project Shriram Shristi completed its construction in the F.Y.2002-03 itself. The documents for land and other expenditures are the event which has taken place much prior to F.Y.2002-03. I find no reason and necessity by you for not submitting the books of accounts or vouchers for expenditure claimed by you for the F.Y.2002-03 till date under the pretext that the documents are still not complete. It is quite surprising that you have been in the business for more than 2 to 3 decades and you are not in the possession of few documents of expenditure where you have bought land and incurred some expenditure. This leads to the reason beyond doubt that you do not possess any proof of expenditure with you till date and you are deliberately delaying and wasting the national time. Hence the revised computations for the F.Y.2004-05 filed by you without adducing any evidence was rejected and was also intimated to you vide our letter dtd.09/08/2006.

During the course of proceeding it was brought out clearly by the department that asset in question was a business asset as you have earlier developed the land and sold many plots to customers under your proprietary concern under the name and style of M/s Rachana Associates. The same land was given for joint development. You have also declared the income under the head business in the A.Y 2005-06 in the return of income filed by you. The same was accepted by you unequivocally as business income during the assessment proceedings for the A.Y 2003-04. When it was realized later by your authorized representative Shri K N Rama Mohan Rao that the said income would need auditing on one hand and loss cannot be carried forward, then the shift in stand took place by suddenly claiming the income form a capital asset. By treating the income from a capital asset your authorized representative is trying to overcome the audit responsibility as no one will come forward to audit income as a business income without the proof of any expenditure.

The above finding by me gains more credence since you have been totally silent when it was brought to your notice the exact nature of expenditure for plan sanction and registration claimed by you. The expenditures are the monies paid to Government official for greasing their palms and also for smoothening the plan and registration process. These are the expenditure which is non-allowable expenditure as per Income-tax Act. This is the precise reason why no auditor will sign an audit report including your authorized representative. This fact has been verbally confirmed by your authorized representative himself.

Surprisingly your authorized representative Shri K N S Rama Mohan Rao is a qualified Chartered Accountant and is also aware of this fact about the non- allowability of the illegal expenditure. The revised total income is statement prepared by you is with the help of your authorized representative. While computing the revised total income why your authorized representative failed to give you the correct position of law is still a pondering doubt. The Government is exploring the action against your authorized representative under the meaning and scope of Section 278 of the Income-tax Act.

After giving umpteen opportunities to present the proof of expenditure claimed by you, you have failed to produce any evidence. It leaves us with no choice but to complete the assessment for the A.Y 2004-05 and 2005-06 with the available material on record. The assessment proceedings will follow on the same lines of A.Y 2003-04 as you had defaulted there also to furnish the proof expenditure.

This is for your information.

Yours faithfully,

Sd/-

(S.S. HARI RAO)

Deputy Commissioner of Income-tax

Central Circle 2(1), Bangalore.

7. From the above Inspector Report and letters, the non-cooperation attitude of the assessee is very much visible. It can also be seen that I have used all the powers to bring in line a litigant assessee.

8. The observation of the Reviewing Officer that the proposal of 281B was issued when the proceedings were closed is not true as proceedings in the case of A.Y 2004-05 and 2005-06 were in progress. The first proposal was sent on 11.08.06. As per the suggestion of the Reporting Officer with certain modifications the proposal of 281B was again sent to the Reviewing Officer on 12.09.06. The letter also mentions clearly that the assessee has defaulted in payment of tax for the A.Y. 2003-04. To substantiate this fact I’m reproducing the proposal u/s 281B dated 12.09.2006 as under:

12.09.06

281B 2nd Proposal

V Srinivasa Raju

Rec. Proc-II

No.281B/DC-CC-2(1)/06-07 Office of the

Deputy Commissioner of Income Tax

Central Circle 2(1), Bangalore

Dated: 12/09/2006

The Commissioner of Income Tax (Central)

Bangalore.

(Through: The Addl. CIT, C.R. 2, Bangalore)

Sir,

Sub: Provisional attachment u/s.281 B of the Income tax

Act- case of Shri V Srinivasa Raju - reg.

-------------

The assessment proceedings of Shri. V Srinivasa Raju (A.Ys. 2004-05 and 2005-06) and Smt. Revathi Raju (A.Y. 2004-05) are in progress. The assessee had entered into a Joint Development Agreement with M/s Shriram Properties Pvt. Ltd where the income has aroused. The assessee had declared only a meager income for the purpose of income-tax. Investigations have revealed that the quantum of taxation is much higher than the income declared.

a. During the course of assessment proceedings Shri V Srinivasa Raju has been found to be non-cooperative and evasive in replying and furnishing evidences. On the same issue the demand of Rs.88,51,740/- has been raised for A.Y.2003-04. Shri V Srinivasa Raju has failed to pay the demand raised on him. The action for recovery by attaching his bank account and debtors has already been initiated. It is also found that there is an ongoing project with M/s Siroya Constructions an annexure of land for the said project held in the name of Shri. V Srinivasa Raju, Smt. Revathi Raju and Shri Gautham S Varad are being annexed. M/s Siroya Constructions have also been intimated about the pending proceedings and the invoking of section 281 of the Income-tax Act, 1961.

The following properties are the assets of Shri. V Srinivasa Raju, Smt. Revathi Raju and Shri Gautham S Varad. Shri. V Srinivasa Raju has confirmed that though the property are in the name of his wife Smt. Revathi Raju and his son Shri Gautham S Varad, but actually it belongs to him and for business convenience the properties have been registered in the name of Smt. Revathi Raju and Shri Gautham S Varad. To safeguard the interest of revenue the properties are being proposed for provisional attachment:

b. Survey no. 5/1, 5/2, & 6 of Hebbal village and survey nos. 99 and 100 of cholanayakanahalli, Hebbal Bangalore all measuring approximately to 8 acres. (Registered in the name of Shri. V Srinivasa Raju, Smt. Revathi Raju and Shri Gautham S Varad).

c. Survey nos. 101/2, Kodigehalli, Yelahanka Hobli, Bangalore North taluk (3 acres). (Registered in the name of Shri. V Srinivasa Raju).

The assessment proceedings are under progress. Once assessments are concluded the same would result in substantial demand. If the assessees dispose off the properties mentioned above it would be difficult to enforce recovery. For the purpose of protecting the interest of revenue, it is necessary to invoke provisions of section 281B of the Income-tax Act, 1961. Therefore, a proposal is placed before the Hon’ble CIT to attach the properties provisionally.

Yours faithfully,

Sd/-

(S.S. HARI RAO)

Deputy Commissioner of Income-tax

. Central Circle 2(1), Bangalore.

a. Annexure of Property statement (a) & (b)

b. Extract of Statement of land in Hebbal

c. Extract of receipts from Project Shristi

d. A copy of the assessment order of Shri V Srinivasa Raju for the A.Y.2003-04.

9. The order for the A.Y 2004-05 & 2005-06 were passed on 30.09.2007. Since the Reviewing Officer did not respond to the proposal I was under the bonafide belief that the proposal has already been approved by the Reviewing Officer.

10. On 07.11.2006 while offering the comments for the observation of Reviewing Officer in the inspection report, ‘I had stated that the proceedings u/s 281B is proposed’, was indeed true. It’s a matter of record that I had received communication for rejecting the 281B proposal by the CIT (Central) on 17.11.2006, which was after the date of my offering of comments for the observation of the Reviewing Officer.

11. With due respect I submit that I had sent the proposal when the proceedings were pending, well within time. ‘But the delay in according sanction to the proposal of 281B is not attributable to me. This fact again went out of sight of the Reviewing Officer. Its again verifiable that as on the date of my comments for the observation of the Reviewing Officer in inspection report, the proposal u/s 281B was still lying at the office of CIT (Central).

12. The Reporting Officer communicated to me only on 17.11.2006 that the Reviewing Officer has rejected the proposal u/s 281B as the proceedings for the A.Y 2004-05 and 2005-06 is not pending. On the same day I drew a certificate to TRO and dealt the issue.

13. If Reviewing Officer would’ve sought the assistance of the Reporting Officer who knew my untiring effort in this case instead of Shri DK Jha, Addl. CIT, CR-1, then the Reviewing Officer would’ve appreciated my case with better grading while inspecting the cases of assessment done by me.

14. Therefore, the comments of CIT (Central) that “the AO, without reading the section, has made comments in a casual manner that proceedings u/s 281B has been proposed” is baseless and devoid of facts. The Reviewing Officer has lost the sight of my efforts in the interest of revenue u/s 281 beside the section 281B of the I.T Act.

15. With great humility I would like to state that “if my above efforts in the interest of revenue are beyond the satisfaction of Shri A K Agarwal, CIT (Central), then I’m totally confused as to what further skills & talents should I equip with, in order to enhance my ‘Knowledge of Procedure’ and ‘the application of mind’ as per the expectation of Reviewing Officer.”

g. A copy of inspection note in case of Sri V Srinivasa Raju is enclosed herewith as Annexure ‘B’.

1. Close perusal of the Annexure- ‘B’ will clearly reveal that the Reviewing Officer has accepted my comments in the case without any objections. At page 22 of the Inspection Report at point no. 12 (Counter comments of I O) the Reviewing Officer has stated ‘NO COMMENTS’.

2. Further it is also reaffirmed from page 23 which is the overall certificate under the head ‘D. APPRAISAL’ of the inspection report that the Reviewing Officer had again no comments to offer for the comments of Officer Reported upon in this case.

3. This is a matter of verifiable record as one of the copy of Inspection Report of the Reviewing Officer is already available with DGIT (Inv), Karnataka & Goa.

4. This issue as a basis can never be a reason for adverse comments in my ACR as the chapter gets closed the moment the IO doesn’t have any Counter comments to offer. Since the Reviewing Officer now has taken up this issue, this issue has again become alive. I have already written a letter F.No. TDS 18-1/Insp Repo/07-08 dated: 25.10.07 requesting CIT (Central) to make amendment to inspection report and scrutiny report in the light of my explanation offered for inspection.

47. With due humility I express that the inspection report is not a fault finding exercise. The observation should not only have sense of proportion but also bring out the good work of the officer. Highlighting peripheral and minor aspects of work to the disadvantage of a subordinate and also to present distorted and lopsided picture of Officer Reported upon is just like:-

“Charging a soldier for Court Marshalling who has returned from war with an observation that ‘While at war Soldier was casual at work since the uniform became un-creased, the shoe laces were not tied properly and the shoes were also dirty during war’.”

48. From the above inspection in the case of V Srinivasa Raju for the A.Y 2003-04, reasonable facts can be drawn on the 2^nd ground of 3^rd limb about the adverse remark of the Reviewing Officer. The remarks of the Reviewing Officer are quite contrary to the facts. The Reviewing Officer has made non-issues an issue and failed to acknowledge my work despite my operational constraints. It also brings out clearly the prejudice of the Reviewing Officer against me.

49. With due respect I impudently express that anybody’s heart will bleed if a person is referred as CASUAL in approach after so much of toiling with sweat and blood in this case. The adverse remarks of the Reviewing Officer in this case have been found to be excessively unreasonable.

50. The 3^rd ground about the adverse remarks in my ACR for the 3^rd limb was based on the Proposal for Reopening of case u/s 147 for M/s Polyflex India Limited for the Assessment Year 2000-01 and 2001-02.The relevant extract of the material is reproduced for your ready reference as under:

2.3 In case of M/s Polyflex India Ltd. The AO had submitted proposal dated 27.11.2006 for reopening of the assessment for the asst. year 2000-01 and 2001-02. The reasons given for reopening the assessment for the A.Y. 2001-02 are as under:

“ The assessee is a manufacturer of polyurethane foam seats to automobile industries and has claimed deduction u/s 80IA to the tune of Rs. 20,80,347/-. Manufacturer of polyurethane foam is covered under in eleventh schedule, as such not entitled for deduction u/s 80IA. The assessee knowingly claimed the deduction u/s 80IA. The assessee fraudulently concealed income and evaded tax by claiming deduction u/s 80IA. The assessee fraudulently concealed income and evaded tax by claiming deduction u/s 80IA. Therefore, I have reason to believe that the income to the tune of Rs. 20,80,347/- claimed u/s 80IA has escaped assessment within the meaning and scope of section u/s 147(b). Hence, this proposal is submitted for CIT’s approval.”

Similarly worded proposal was submitted for the asst. year 2000-01. Section 148(2) contemplates that a notice u/s 148 can be issued after recording the reasons for the same.

Various Courts have held that there should be proper application of mind while recording reasons. In the present case, the AO has not even mentioned the section correctly and is referring to section 147(b). Section 147 was amended by Direct tax Laws (Amendment) act 1987 w.e.f. 01.04.1989 and a new section 147 was substituted in place of the old section 147. Now there is no section 147(b) in the Act. Mentioning of a section which does not exist in the Act clearly shows the casual approach of the AO. The Addl. CIT, CR-2 was informed about the same. However, the AO did not submit fresh reopening proposal was submitted by Shri P P Aspatwar vide letter dated 02.03.2007 who was holding the charge of Sri Sanghi Srihari Rao at that time.

51. Analysis of the above observation of the Reviewing Officer gets crystallized as under:

a. The AO has not even mentioned the section correctly and is referring to section 147(b).

b. Various Courts have held that there should be proper application of mind while recording reasons. In the present case, the AO has not even mentioned the section correctly and is referring to section 147(b). Section 147 was amended by Direct tax Laws (Amendment) act 1987 w.e.f. 01.04.1989 and a new section 147 was substituted in place of the old section 147. Now there is no section 147(b) in the Act. Mentioning of a section which does not exist in the Act clearly shows the casual approach of the AO.

c. The Addl. CIT, CR-2 was informed about the same.

d. However, the AO did not submit fresh reopening proposal was submitted by Shri P P Aspatwar vide letter dated 02.03.2007 who was holding the charge of Sri Sanghi Srihari Rao at that time.

52. Based on the above fact I would like to clarify the observation of Reviewing Officer regarding the reopening of the assessment for the asst. year 2000-01 and 2001-02 in the case of M/s Polyflex India Ltd vide proposal dated 27.11.2006. as under:

a. The AO has not even mentioned the section correctly and is referring to section 147(b).

1. I admit that instead of writing “U/s 147 Explanation 2(b) the proposal was sent as U/s 147(b). It was a typographical error which by oversight I had forwarded the proposal through Addl. CIT, CR-2. It was minor mistake, as it can be seen from the fact that the Reviewing Officer sought not only oral communication but also kept the file for more than 3 months.

1. With little knowledge about the Income-tax Act, 1961 I possess, I express that the “PARLIAMENT in their wisdom had realized that typographical and petty errors are part and parcel of any administration. The collective wisdom had also given immunity for slippages which were bonafide. As long as the minor mistakes are in conformity, in its sum and substance and effect, relating to the intent and purpose of the Act, then the mistakes cannot be challenged in any Court of Law to make any proceeding invalid.”

2. The Reviewing Officer has again lost sight of this fact enumerated in Section 292B in the Income-tax, Act 1961. The Provision of 292B is reproduced for you ready reference as under:

“Section 292B. Return of income, etc., not to be invalid on certain grounds.

No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.”

3. With due respect I am constrained to state that the Reviewing Officer has pointed an obvious typographical error and failed to look at the Income-tax Act “U/s 147 Explanation 2(b). I would have humbly clarified this pointed orally if he would’ve summoned me directly. The provision Explanation 2 (b) reads as under:

“Explanation 2.-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:-

(b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;”

c. The Addl. CIT, CR-2 was informed about the same.

1. The Addl. CIT, CR-2 had informed me orally and I had also explained the typographically error orally by stating the correct provision of the Income-tax Act. I was under the bonafide impression that the matter was over.

d. However, the AO did not submit fresh reopening proposal was submitted by Shri P P Aspatwar vide letter dated 02.03.2007 who was holding the charge of Sri Sanghi Srihari Rao at that time.

1. It is to be noted that the proposal was sent on 27.11.06. Within a week the typographical error was conveyed to me by the Reporting Officer orally and I clarified the mistake orally. If the Reviewing Officer had sent back the proposal to me then the same would’ve been corrected and sent back immediately.

2. The Reviewing Officer had sent back the file after more than 3 months to the Office of DCIT CC-2(1). Since I was on Earned Leave Shri P Pradeep Aspatwar, who was holding additional charge in the capacity of DCIT CC-2(1) resubmitted the proposal. It’s again a routine process in the department to hold additional charge and dispose the work while holding the additional charge.

3. The Reviewing Officer was aware of the fact that I’m on leave. The Reviewing Officer has failed to bring out the fact that I have also held additional charges as DCIT CC- 2(2) and CC- 2(3) during the year 2006-07. During this period I have also carried out important works with equal responsibility as DCIT CC- 2(2) and CC- 2(3) which is a matter of record and is verifiable.

53. From the observation of the Reviewing Officer regarding the reopening of the assessment for the asst. year 2000-01 and 2001-02 in the case of M/s Polyflex India Ltd reasonable facts can be drawn on the 3^rd ground of 3^rd limb about the adverse remark of the Reviewing Officer. The Reviewing Officer rather than improving the proposal by just inserting ‘Explanation 2’ between ‘section 147(b)’ has made not only a non-issue an issue but also inordinately delayed the proposal for more than 3 months. With due respect I state that the attitude of the Reviewing Officer was not at all of a facilitator but of a mere fault finder over petty issues despite being the leader of Central Charge.

54. The 4^th ground about the adverse remarks in my ACR for the 3^rd limb was based by relying in on the case of M/s Srinivasa Trust for the Assessment Year 1999-2000. The relevant extract of the material is reproduced for your ready reference as under:

2.4 In the case of M/s Srinivasa Trust, the CIT(A) has passed order dated 12.01.2007 for the asst. year 1999-00 allowing the appeal of the assessee trust holding that the contention of the applicant was acceptable and the disallowance as per Sec. 11 was not justified and the trust was entitled for exemption. The asst. order which was subject matter of appeal was passed after taking action u/s 147 by the same AO. It was noticed from the assessment records of M/s Mysore Fruit Products Ltd. That the assessee trust had given advance of Rs. 99,74,000/- on 31.03.1999 as interest free loan to M/s Mysore Fruit Products Ltd.. The lending of advance or loan was against the objects of the trust. On the basis of this information gathered in the case of M/s Mysore Fruit Products Ltd., the assessment of the assessee trust was reopened. The exemption claimed by the assessee trust was not allowed as the assessee trust had continued to lend money to a person referred to in sub-sec(3) of Sec. 13 of the I.T Act 1961 during the previous year relevant to the asst. year 1999-00 The AO in his scrutiny however, did not recommend filing of appeal before the ITAT. It may be noted here that the assessment order was passed by the same AO who had submitted the scrutiny report. I therefore, made the following remark on the note sheet.

“Please request the Addl. CIT to resubmit his report after going through assessment records and any submission made by the AO at the time of appeal proceedings and also considering Rule 46A of I.T. Rules 1962.”

55. Analysis of the above observation of the Reviewing Officer gets crystallized as under:

a. “Please request the Addl. CIT to resubmit his report after going through assessment records and any submission made by the AO at the time of appeal proceedings and also considering Rule 46A of I.T. Rules 1962.”

b. Only after this, the AO submitted another scrutiny report recommending filing of second appeal before ITAT. This shows that the AO had submitted scrutiny report on an appeal order which was passed against his own asst. order without properly appreciating all the facts and circumstances of the case.

c. After going through these grounds of appeal it will be clear that these grounds of appeal it will be very clear that these have been prepared without any application of mind. Grounds of Appeal No. 1 & 2 are not grounds but statement of facts only. Grounds of appeal no.3 is in the nature of facts and argument. Grounds of appeal No.4 is again a statement of fact. Grounds No. 5 is again in the nature of statement of fact and argument. An officer of his seniority should also know to how to frame grounds of appeal. I, therefore, made the following remarks on the note sheet.

d. It may not be out of place to mention here that the AO had not submitted the grounds of appeal while submitting the fresh proposal dated 13.03.2007. The matter was getting barred by limitation on 07.04.2007. Therefore, authorization was sent on 16.03.2007 to the AO. In the authorization letter, the AO was asked to submit grounds of appeal for approval before filing the appeal. With lot of pursuing done by the ACIT(HQ), the grounds of appeal were received on 27.03.2007 and revised grounds were submitted even later. It is also learnt that the AO had told the Addl.CIT, CR-1 that it was not his job to draft grounds of appeal and the same was required to be done by the CIT. The above fact shows that AO is not only casual in his approach but also arrogant.

56. Based on the above fact I would like to clarify the observation of Reviewing Officer regarding not recommending the case for appeal before ITAT in the case of M/s Srinivasa Trust for the asst. year 1999-00 as under:

1. The order of M/s Srinivasa Trust for the assessment year 1999-2000 was passed by me. The whole order was based on only one piece of evidence relating to advancing of monies by M/s Srinivasa Trust to M/s Mysore Fruits Products Limited for buying a property. The assessee failed to furnish the evidence. The order was passed by taxing the trust on the ground of related party transaction in the absence of evidence.

2. The assessee furnished the crucial evidence before CIT (A). The CIT (A) called me for hearing and explained me that the assessee has furnished the evidence for advancing loan for buying a property through M/s MFPL. I expressed the fact that the evidence was not furnished before me. I also expressed to the CIT (A) to dispose the case on the merit of the evidence.

3. Subsequently CIT (A) allowed the assessee’s appeal. Since I was aware of the whole fact, I applied my mind and did not recommend for further appeal by stating that the CIT (A) has looked into this issue on merits.

4. Shri D K Jha, Addl. CIT, CR-1, endorsed my finding and did not recommend further appeal before ITAT. And one fine day, Shri D K Jha, Addl. CIT CR-1, was disturbed and called me to his Office. I’m bringing in detail the conversation on verbatim basis.

Incident No.2	(On being called by Shri DK Jha at his Office)
D K Jha:	Yaar, you don’t know how to write scrutiny report.
Hari Rao	Sir, what happened and which case?
D K Jha:	Its Srinivasa trust for the A.Y 1999-00 you have recommended no further appeal for the order of CIT (Appeals).
Hari Rao	Yes, I agree with scrutiny report as I personally went before the Chinna Sir. During Appeal, fresh facts were put before Chinna Sir which was not produced before me during the assessment. This evidence was core for the assessment. I told this fact to Chinna Sir and conveyed that the matter may be disposed off on merits.
D K Jha:	CIT is very annoyed for you not recommending second appeal and you will be in problem.
Hari Rao	Sir, why should I be in problem for my independent view? You have also agreed with my view and forwarded it to CIT. If you had a different view then you should have given your independent judgment.
D K Jha:	You have done a big mistake by not recommending for second appeal and you just go through Rule 46A.
	Shri DK Jha gave to me the IT Rules. After Going through Rule 46A I continued my discussion
D K Jha:	You change the scrutiny report as per Rule 46A as I’m going to change my observation and resend the proposal.
Hari Rao	Sir, I stand on my views and I don’t find any mistake and I’m going to stand on it.
D K Jha:	You are heading for problems with CIT unnecessarily. Just change the report and send it and close the issue as there’s no point in annoying the CIT. I will prepare it and send it to you. But you have to also learn how to prepare Grounds of Appeal.
Hari Rao	Ok Sir you prepare everything and send it to me or call me I will come and sign it with my comments. Sir, Grounds of Appeal was earlier made by the CIT’s Office but from past few months we have been preparing Grounds of Appeal for which CIT is not happy. Why don’t you tell CIT to have a class or training on Grounds of Appeal for all the officers so that there will be uniformity in action.
D K Jha:	I will tell CIT and see what best we can do.

5. With due humility I express that I still stand on the decision of not suggesting for further appeal as it was after the application of my mind. I have already written a letter F.No. TDS 18-1/Insp Repo/07-08 dated: 25.10.07 requesting CIT (Central) to make amendment to scrutiny report in the light of my explanation offered.

1. There is no provision in the Income-tax Act, 1961 or Circular which states that one has to suggest for further appeal despite the change of fact on ground.

2. With due humility, I express that I still stand on the decision of not suggesting for further appeal was done not only after considering the facts but also after application of my mind. It’s only that Shri D K Jha prevailed upon me I changed my opinion or else I would never have changed my independent view by force.

3. The scrutiny report has a specific column as ‘Assessing Officers Observation’. In this column everyone is given freedom to express their views freely. The independent observation column is of non-revenue implication. It’s only a learning process. Difference of opinion should not be construed as dissent. Similarly, independent views are given by the Joint/ Additional Commissioner. The ultimate decision is of the CIT to take a view which is based on the views available on record and his own judgment.

4. With due humility I need to mention that CIT (Central) has again lost the sight of Surveys u/s 133A in the case of M/s Karnataka Breweries and Distilleries Limited and Chaitanya Properties Private Limited who belongs to the same group. The efforts have been highly appreciated by the Reporting Officer and the Reviewing Officer in my ACR for the year 2006-07.

5. With due respect to the Reviewing Officer I would like to state that during the hearing on appeal I had appeared before an authority who is co-equal to the rank of the Reviewing Officer. After discussion on this subject I was convinced that the CIT (A) would make all the efforts in looking into evidence which I would have made and more than that. Therefore, after discussion leaving the matter on merits and that too to the judgment and wisdom of CIT (A) is no matter of crime, even for the order which I myself have passed.

c. After going through these grounds of appeal it will be very clear that these have been prepared without any application of mind. Grounds of Appeal No. 1 & 2 are not grounds but statement of facts only. Grounds of appeal no.3 is in the nature of facts and argument. Grounds of appeal No.4 is again a statement of fact. Grounds No. 5 is again in the nature of statement of fact and argument. An officer of his seniority should also know to how to frame grounds of appeal. I, therefore, made the following remarks on the note sheet.

1. Shri D K Jha, Addl. CIT, CR-1 has endorsed my view on this issue. It’s a matter of record which is verifiable. Therefore, Shri A K Agarwal, CIT (Central) treating only me with an adverse comments is being partial.

1. Without prejudice to the Reviewing Officer I submit that there was no need for sending report back and forth. The Reviewing Officer could have taken the final decision based on various independent views available on the subject.

2. With due humility again I would like to represent my case that the Reviewing Officer may hardly find a case where a matter has barred by limitation. It is a matter of verifiable record the speed with the official matter gets disposed at my table.

3. It can also be ascertained from my Circle that the next time barring date of Search assessment case is 31.12.2008. The status of all pendency can be verified by comparing my statistics with all the other AO’s under Central Charge. The status of pendency can also be verified from the office of DCIT- 2(1), prior to my takeover.

4. The Reviewing Officer making a remark that I had expressed to Shri D K Jha, Addl. CIT CR-1 that ‘Grounds of appeal is the job CIT is not true. I have been totally quoted out of context.

5. I have already narrated the Incident No.2 to abreast the Reviewing Officer at this stage about what actually transpired between me and Shri D K Jha, Addl. CIT, CR-1. I’ve brought in detail the conversation on verbatim basis.

6. I strongly object for the observation of the Reviewing Officer by terming me as Casual and Arrogant, purely on the basis of listening to one side of story. The Reviewing Officer had all the rights to summon me and verify the fact about the incident and unravel the truth. It violates the very foundation of the “PRINCIPLE OF NATURAL JUSTICE as inferences cannot be drawn by just hearing to only one side.”

7. The Reviewing Officer has made the observation and relevant extract from above is reproduced “It is also learnt that the AO had told the Addl. CIT, CR-1 that it was not his job to draft grounds of appeal and the same was required to be done by the CIT. The above fact shows that AO is not only casual in his approach but also arrogant”.

8. Without Prejudice to the legal knowledge of Reviewing Officer I humbly submit that the adverse remark in my ACR on this issue is based only on hearsay than factual.

9. With the little knowledge of procedure which I possess, I explain, that “the proceedings should be conducted so they are fair to all the parties - expressed in the Latin maxim audi alteram partem: ‘let the other side be heard’. Each party to a proceeding is entitled to ask questions and contradict the evidence of the opposing party. A decision-maker should take into account relevant considerations and extenuating circumstances, and ignore irrelevant considerations.”

10. With due humility again to the Reviewing Officer I would like to state that listening to one side, no issue can qualify to become a FACT & it will always remain as a HEARSAY. The terming of hearsay as fact based on the version of Shri D K Jha, Addl. CIT, CR-1 not only violates the Principle of Natural Justice but clearly reveals the prejudice of Shri A K Agarwal, CIT (Central) against me.

11. With due respect I state that the Reviewing Officer has taken an independent and fair view made in the scrutiny report as dissent. The Reviewing Officer has not been all that tolerant to bonafide and academic views contrary to his own views.

12. The Reviewing Officer has also displayed attitude of partiality for singling me out on this issue and making an adverse comments only in my ACR.

57. From the above explanations for the scrutiny report in the case of Srinivasa Trust for the Assessment Year 1999-2000 reasonable conclusions can be drawn on the 4^th ground of 3^rd limb about the adverse remark of the Reviewing Officer. A part of observation of the Reviewing Officer is also an indirect inference drawn on the hearsay basis of Shri D K Jha, Addl. CIT, CR-1 without verifying the facts from the Officer reported upon. It brings out clearly the prejudice of not only the Reviewing Officer but also the prejudice of Shri D K Jha, Addl. CIT, CR-1 against me.

58. The 5^th ground of the adverse remarks in my ACR for the 3^rd limb was based on the scrutiny report in the case of M/s Mysore Fruits Products Limited for the Assessment Year 2001- 2002. The relevant extract of the material is reproduced for your ready reference as under:

2.5 In the case of M/s Mysore Fruit Products Ltd. For the asst. year 2001-02, the AO had submitted a perfunctory report not recommending second appeal. The Addl. CIT, CR-2 submitted a very detailed report running into 4 pages recommending second appeal along with 8 grounds of appeal. Copy of the AO’s report and Addl. CIT’s report are attached herewith as Annexure ‘C’ & ‘D’ respectively. This again shows the seriousness which the AO shows while submitting the scrutiny report. The issue involved in this case was regarding wrong depreciation claimed which would be relevant for successive asst. years as well.

59. Analysis of the above observation of the Reviewing Officer gets crystallized as under:

a. In the case of M/s Mysore Fruit Products Ltd. For the asst. year 2001-02, the AO had submitted a perfunctory report not recommending second appeal.

b. The Addl. CIT, CR-2 submitted a very detailed report running into 4 pages recommending second appeal along with 8 grounds of appeal. Copy of the AO’s report and Addl. CIT’s report are attached herewith as Annexure ‘C’ & ‘D’ respectively. This again shows the seriousness which the AO shows while submitting the scrutiny report. The issue involved in this case was regarding wrong depreciation claimed which would be relevant for successive asst. years as well.

60. Based on the above fact I would like to clarify the observation of Reviewing Officer regarding the scrutiny report in the case of M/s Mysore Fruit Products Ltd. For the asst. year 2001-02

a. In the case of M/s Mysore Fruit Products Ltd. For the asst. year 2001-02, the AO had submitted a perfunctory report not recommending second appeal.

1. M/s Mysore Fruit Products Ltd. – The assessee had imported Filler/Croner machine for capping the bottle.

2. A Survey u/s 133A was conducted by my predecessor in the year 2003-04 and found the machine at the premises of M/s KBDL instead of MFPL, its related concern for packing of beer bottle. The circumstantial evidence by taking the employees statement it was opined that the machine was installed and used by only KBDL in the earlier years also..

3. The AO in the asst. year 2001-02 disallowed the depreciation on Kroner machine in the hands of MFPL on circumstantial evidence. Later the employee retracted the statement and the assessee got the installation certificate of the machine at MFPL from Customs Department and substantiated that the machine existed during the period.

4. Since the assessee produced the evidence in its favour for the claim of depreciation based on certificate of Custom Department I was under bonafide belief that without concrete evidence and also on the statement of an employee who had retracted the statement the department is on weak stand. Hence I suggested no appeal. Since the immediate superior was witness to Survey proceeding had a different view and suggested further appeal.

5. I object to the word ‘perfunctory’ used by the Reviewing Officer. The Reviewing Officer even before stating the case is displaying open prejudices. The Reviewing Officer has charged me right at the beginning of substantiating the basis of observation for the adverse remarks in my ACR for the year 2006-07. This act of branding by the Reviewing Officer violates the very foundation of the “PRINCIPLE OF NATURAL JUSTICE.”

1. Without prejudice to the Reviewing Officer I express that I still stand on the decision of not suggesting for further appeal as it was based on my level of understanding. It was done not only after considering the facts but also after application of my mind.

2. With due humility I need to mention that CIT (Central) has again lost the sight of Surveys u/s 133A in the case of M/s Karnataka Breweries and Distilleries Limited and Chaitanya Properties Private Limited who belongs to the same group. The efforts have been highly appreciated by the Reporting Officer and the Reviewing Officer in my ACR for the year 2006-07.

3. The assessment in this case done by my predecessor was the core work in earlier year. One of the main considerations for scrutiny report is that it should be sent in time which I have always done in my entire career.

61. From the above explanations for the scrutiny report in the case M/s Mysore Fruit Products Ltd. For the asst. year 2001-02, reasonable conclusions can be drawn on the 5^th ground of 3^rd limb about the adverse remark of the Reviewing Officer. The Reviewing Officer has not been all that fair to make an adverse remark on a bonafide independent academic view which is fundamental for the discharge of an official duty.

62. The 6^th ground of the adverse remarks in my ACR for the 3^rd limb was based by relying on the Scrutiny report in the case of M/s Sabari Trust for the Assessment Year 2003-04. The relevant extract of the material is reproduced for your ready reference as under:

2.6 In the case of Sabari Trust for the asst. year 1998-99, the AO submitted a very perfunctory report not recommending second appeal. The Addl. CIT submitted a very detailed report running into 3 pages recommending appeal to High court. A copy of the report of the AO and the Addl. CIT are enclosed as Annexure ‘E’ & ‘F’ respectively.

63. Analysis of the above observation of the Reviewing Officer gets crystallized as under:

a. In the case of Sabari Trust for the asst. year 1998-99, the AO submitted a very perfunctory report not recommending second appeal.

b. The Addl. CIT submitted a very detailed report running into 3 pages recommending appeal to High court. A copy of the report of the AO and the Addl. CIT are enclosed as Annexure ‘E’ & ‘F’ respectively.

64. Based on the above fact I would like to clarify the observation of Reviewing Officer regarding the scrutiny report in the case of Sabari Trust for the asst. year 1998-99 is as under:

a. In the case of Sabari Trust for the asst. year 1998-99, the AO submitted a very perfunctory report not recommending second appeal

1. M/s Sabari Trust- The assessee had declared income received in the form of rent as ‘Income from House Property’.

2. The AO treated the income under the head “Income from Business or Profession” by treating it as assessee’s business.

3. The ITAT made a finding that department had accepted in the A.Y. 1996-97 the income under the head ‘Income from house property’ and cannot change the opinion now. I accepted the fact after going through the facts as observed by the ITAT and the same stand was taken by the Reporting Officer on this issue.

b. The Addl. CIT submitted a very detailed report running into 3 pages recommending appeal to High court. A copy of the report of the AO and the Addl. CIT are enclosed as Annexure ‘E’ & ‘F’ respectively.

1. The Addl. CIT has not recommended the issue for further appeal, rather endorsed my view at Para 2 of his letter dated 19.10.06. It’s a matter of record which verifiable.

2. By virtue of the background in the related cases the Addl. CIT has added few more points to my finding and recommended those issues in appeal. The Reviewing Officer has again lost the sight of this verifiable fact which is a matter of record.

65. From the above explanations for the scrutiny report in the case of Sabari Trust for the asst. year 1998-99, reasonable conclusions can be drawn on the 6^th ground of 3^rd limb about the adverse remark of the Reviewing Officer. The remarks of the Reviewing Officer are quite contrary to the facts. The Reviewing Officer has failed to realize that the Reporting Officer has endorsed my view and not differed from my view. The Reviewing Officer has made the remarks without going through the facts properly.

66. The 7^th and final ground of the adverse remarks in my ACR for the 3^rd limb was based on by relying is based on the Assessment Order in the case of Shri K S Ramakrishna for the Assessment Year 2003-2004 and 2004–2005. (ANNEXURE - G-1 & G-2). The relevant extract of the material is reproduced for your ready reference as under:

2.7 I have also come across asst, orders passed by the AO in the case of Shri K S Ramakrishna for the asst. year 2003-04 and 2004-05. In this case, the AO had visited the premises of the assessee also. However, while making the additions, it is seen that huge additions were made without bringing any evidence on record. As a result, the CIT(A) has deleted the addition made by the AO. Copy of the asst .orders and the order of the CIT(A) is enclose herewith as Annexure ‘G-1’, ‘G-2’ & H respectively.

67. Analysis of the above observation of the Reviewing Officer gets crystallized as under:

a. I have also come across asst, orders passed by the AO in the case of Shri K S Ramakrishna for the asst. year 2003-04 and 2004-05. In this case, the AO had visited the premises of the assessee also.

b. However, while making the additions, it is seen that huge additions were made without bringing any evidence on record.

c. As a result, the CIT(A) has deleted the addition made by the AO. Copy of the asst .orders and the order of the CIT(A) is enclose herewith as Annexure ‘G-1’, ‘G-2’ & H respectively.

68. Based on the above fact I would like to clarify the observation of Reviewing Officer regarding the asst, orders passed by the AO in the case of Shri K S Ramakrishna for the asst. year 2003-04 and 2004-05 is as under:

1. I had visited the business premises of the assessee Shri K S Ramakrishna along with my team in the financial Year 2005-06. The team comprised of Shri AN suri, ITI, Bhavani, ITI, Girijan, STA, and Aarti, Steno. The visit was in order to explore the veracity of the claim of agricultural income. The visit was with the prior approval of the Reporting Officer.

b. However, while making the additions, it is seen that huge additions were made without bringing any evidence on record.

1. It is a common experience in the Department that usually we all find it difficult to break the case involving the claim of agricultural income. Evidences can be gathered only by a field visit.

2. I learnt that the assessee had introduced a novel technique to increase the productivity by three times. The technique is the usage of bone-meal with vermi-compose bed for growing Rose plant. The assessee requested not to discuss this technique in the order as it was contradictory to the business interest and also the revealing of secret of his business.

3. The entire team saw the plants were massive in size and in yield. The entire poly-house of the assessee was replaced by this new technique and the plant reached its usual yield in 6 months.

4. Based on the first hand experience and also going through the documents furnished by the assessee. I found that assessee in all circumstances can claim agricultural income not beyond three times. The same fact was confirmed by the assessee. The assessee claimed 71/2 times more than the earlier year as an agricultural income. The claim was quite contrary to assessee’s own admission and my facts gathered during the field visit. Therefore, based on facts I was convinced to restrict the agricultural income to 3 times which comes to Rs. 11,85,000/-. After considering all the facts I restricted the assessee’s claim of agricultural income only to Rs. 10,00,000/- A detailed assessment order for the A.Y 2003-04 was passed on 22.03.06.

5. With due humility I state that the Reviewing Officer has lost the sight of the following

(I) The case was time barring on 31.03.2006. In this type of case only field visits can state the truth which I did it on 22.02.06.

(II) After considering all the facts on ground and the assessment order were passed in the year 2005-06 for the A.Y. 2003-04 after the discussion with the Reporting Officer.

(III) Since on this issue a stand was already taken the assessment order for the A.Y. 2004-05 the orders were again passed on the same lines of earlier year. The orders were again passed after the discussion with the Reporting Officer.

(IV) The Reviewing Officers in the year 2005-06 & 2006-07 had reviewed the assessment as per the Action Plan for the Year 2005-06 and 2006-07 published by CBDT.

(V) I was always well disposed to clear any doubt if the Reviewing Officer had hinted any confusion over the collection of evidences. The very fact that no proceeding u/s 263 were made by the Reviewing Officer for the orders passed, gives the credence to the fact that the Reviewing Officer never had any adverse observation in the year 2006-07.

6. From the above submissions it can be inferred that its sheer my effort of gathering evidence on ground led to the development of evidence. The Reviewing Officer very recently, has again endorsed the same basis of evidence in the grounds of appeal filed before the ITAT on 12.07.07.

c. As a result, the CIT (A) has deleted the addition made by the AO. Copy of the asst .orders and the order of the CIT(A) is enclose herewith as Annexure ‘G-1’, ‘G-2’ & H respectively

1. The Reviewing Officer on 12.07.2007 has preferred an appeal before ITAT in the case of Shri K S Ramakrishna for the A.Y 2003-04 and 2004-05. Its worth reproducing the relevant contents of the grounds of appeal:

(I) The Learned CIT (A) has erred in deleting the entire addition without any basis as the AO was justified in his estimation of Agricultural Income at three time of the earlier year’s Agricultural Income declared.

(II) The Learned CIT (A) has erred in not appreciating the efforts of the Assessing Officer in determining the Agricultural Income at three times of earlier years income as against 7 ½ times resorted by the assessee.

(III) The Learned CIT (A) ought to have remanded the matter back to the Assessing Officer for getting the factual picture especially when there was unusual increase in the Agricultural Income shown by the assessee.

2. All the points stated above by the Reviewing Officer in the Grounds of appeal filed before ITAT not only vindicates my stand but highlights my efforts made during the assessment proceeding.

3. It’s quite confusing and surprising that the Reviewing Officer is officially approving and endorsing my view and privately criticizing and making it as the basis of adverse remarks in my ACR for the year 2006-07? The Reviewing Officer has not taken that entire fair and true means to give an adverse observation on this issue.

69. From the above explanations about scrutiny report in the case of Shri K S Ramakrishna for the A.Y 2003-04 and 2004-05, reasonable conclusions can be drawn on the 7^th ground of 3^rd limb about the adverse remark of the Reviewing Officer. The remarks of the Reviewing Officer are quite contrary to the facts. But the basic question arises “Why the case needs to be merely mentioned while substantiating the basis at all when the CIT (Central) never commented on the work in the year 2006-07?” It’s only an act of ‘shooting arrows in the dark’ by the Reviewing Officer which is never appreciable and seeing the dignity of the position which one is occupying. It also brings out clearly the prejudice of the Reviewing Officer against me despite the good work done by me.

70. The adverse remarks by the Reviewing Officer in my ACR were based on the General Assessment reflected in PART V of the ACR. I have replied point by point to each and every basis for the adverse observation made by the Reviewing Officer. I have also brought out numerous incidents of the Reviewing Officer where opinions about me were made by Shri A K Agarwal, CIT (Central) by merely relying to the version of Shri D K Jha, Addl. CIT CR-1 instead of my immediate boss who monitored the work on day to day basis. Now I would like to make humble submission about the process of ACR.

71. Annual Confidential Report is a great responsibility bestowed in the hands of a superior assuming that the person on top will have superior wisdom. A senior is necessarily required to be fair and impartial while writing a confidential report. ACR not only deals with the present prospects but also the future career prospects of a person reported upon. Hence, an ACR should be handled with utmost care.

72. According to OM No.21011/6/2001-Estt(A) dated 14.5.2001 “The Annual Confidential Reports of the government servants are written with a view to adjudge their performance every year in the areas of their work, conduct, character and capabilities. The system of writing confidential reports has two main objectives. First and foremost is to improve performance of the subordinates in their present job. The second is to assess their potentialities and to prepare them for the jobs suitable to their personality. The columns of ACRs are, therefore, to be filled up by the Reporting, Reviewing and Accepting authorities in an objective and impartial manner”. At this juncture I would like to bring before your good self my experiences at the Central Circle.

73. After the experience of Investigation for more than a year I was transferred to Central Circle in year 2005-06. I had excellent experience as long as Shri M L Agarwal, CIT (Central) was holding the charge. Ever since Shri A K Agarwal, CIT (Central) took over, ‘hierarchical game’ was followed very strictly. ‘Hierarchical game’ is, ‘in the presence of seniors, juniors will not speak and offer comments even when the gaps can still be filled in’. Since I had an open relation with Shri Narendra Kumar, Addl. CIT CR-2, all was well at work place as I hardly had any interaction with the Reviewing Officer. In the entire year of 2006-07, I met officially Shri A K Agarwal, CIT (Central) only on very few occasions.

74. Whereas in the case of Shri D K Jha, Addl. CIT, CR-1, I learnt from a senior that during the lunch club meet Shri D K Jha, ridiculed me on many instances citing my investigation cases of GDR Group, Fern Builders & Developers and P B Nichani group. The senior also asked Shri D K Jha, “Why you are after Hari Rao when you have never worked with him. You must see him how he works in crisis.” I was really surprised by the behaviour of Shri D K Jha, when I came to know about the incident.

75. Later during the inspection of my assessment done during the year 2005-06, I experienced the direct heat of Shri D K Jha, and my fears were found to be true. I ignored the incident on the words of Reporting Officer. But when the Reporting Officer was transferred in the month of February, I started having direct confrontation with Shri D K Jha, on many official and trivial issues. On the other hand, I also learnt from the Reporting Officer that the Reviewing Officer had asked the Reporting Officer “Why Hari has been given outstanding when Hari does not know how to write reports”. The Reporting Officer replied by stating that “reports are only a small fraction of the total work and I have graded Hari on the basis of overall performance.”

76. During the process of representation I have learnt from the material supplied to me from the Office of CCIT-CCA that Shri A K Agarwal has framed opinion about me by taking the words of Shri D K Jha, Addl. CIT- CR-1 as gospel truth, that too, without ever cross-verifying the credibility and veracity of the facts about me. From all the above incidents above I have reason to believe that the writing of my ACR by Shri A K Agarwal, CIT (Central) was pre-meditated to give me adverse comments.

77. During the year in question the Reviewing Officer neither did any counseling, discussions, reprimanding formally or informally about my casual approach nor did he issue any memo for the said approach. On the contrary, the Reporting Officer had appreciated me on numerous occasions for the good work done by me. In such a situation the adverse remarks made by Shri A K Agarwal CIT (Central) can only be due to reasons other than my work. One among that may be the strong prejudice of the Officer about my caste; I have strong reasons to believe this as can be seen from the incident which took place during an Official Language Meeting on 13.04.2007

Incident No.3	Shri AK Agarwal comments during an Official Language Meeting on 13.04.2007.
A K Agarwal	In an official letter a lady steno typed S E Dubey as SC Dubey. S E Dubey must have thought that he’s Scheduled Caste Dubey whereas that poor chap was a Brahmin.
My analysis	The above statement of Shri AK Agarwal not only is derogatory but brings out the deep seated attitude of casteism. SC word need not necessarily means Scheduled Caste, but can also mean Subhash Chandra or Satyendera Chandra or any name.
	The above utterance of Shri AK Agarwal was totally unwarranted in an official meeting. From the above statement of Shri A K Agarwal, it can be interpreted reasonably that the CIT-Central is still carrying caste prejudices at workplace despite holding a senior position with the Government of India. I was deeply hurt with the utterance of Shri AK Agarwal as I belonged to the Scheduled Caste community. I never wanted to make it an issue but in the process of ACR Shri AK Agarwal without even giving me any opportunity has blindly followed the words of Shri D K Jha as gospel truth, which again is from a forward community, has made me to take this step. I ignored the incident. Since, Shri A K Agarwal has attempted to destroy my career by being prejudiced on mere hearsay of Shri D K Jha, I have taken this issue very seriously.. All along service in IRS I had an unblemished record at workplace. Unnecessarily, Shri AK Agarwal has colluded with Shri DK Jha and sought vengeance. I feel the strong sense of victimization by Shri A K Agarwal, in the writing of ACR process despite my untiring work. For no reason me and my family has suffered mentally and visualizes further attempts by Shri A K Agarwal to frame me falsely. Therefore, to safeguard from further victimization I have simultaneously taken recourse for action with appropriate agencies.

78. The prejudiced attitude of the Reviewing Officer is further seen while substantiating the basis for adverse remarks in my ACR for the year 2006-07. The epitome of the basis are as under:

a. PART-I of ACR- terming me as CASUAL for the work which is the responsibility of Administrative Section CCIT-CCA.

b. PART-II of ACR- terming me as CASUAL for not writing the targets and achievements in all the important areas when it was impossible to write in the space provided in the ACR.

c. For the year 2006-07 Reviewing Officer agreeing on one hand, with the my immediate boss not only on overall performance but also about my work in the core areas i.e. quality investigation, quality search assessment, post Survey investigation with perseverance and also as a good team man and contradicting it on the other, by terming me CASUAL on peripheral and lesser important issues.

d. The Reviewing Officer displaying highest degree of intolerance to any free and fair opinion during reports. Treated difference in opinion as dissent and defiance. Strict following to the HIERARCHICAL GAME is an attitude of revival of colonial/feudal legacy at a workplace.

e. Grading on the peripheral and lesser important issues for the work done in the year 2005-06 and not on the core area of work during the year 2006-07.

f. No counseling, discussions, censuring or reprimanding me through a memo in the year 2006-07 for the alleged adverse comments but privately creating adverse like situation despite my untiring efforts.

g. Framing opinion about me on the words of Shri D K Jha, Addl. CIT CR-1, instead of Reporting Officer who has directly supervised my work.

h. Using strong words like CASUAL, ARROGANT, PERFUNCTORY and weak on KNOLWEDGE OF PROCEDURE without even verifying the factual position in each case.

i. Tacitly and subtly hinting of foul play while placing of summons and papers in the file, note-sheet writing, agreeing on the order passed by CIT (A) for the order passed by me and mere passing of remarks on the order of K S Ramakrishna. Officially appreciating my initiative in the case of K S Ramakrishna but privately giving me adverse remarks on the same efforts.

j. If the comments of the Reviewing Officer is weighed with the comments of all the Reporting Officer and the Reviewing Officer in my ACR’s between the years 2001- 2007 (i.e., right from the beginning of my career till date) then it will egregiously stand out the deeper prejudices of the Reviewing Officer towards me.

k. At this point I take the opportunity to highlight another incident with Shri D K Jha, Addl. CIT, CR-1, which will vindicate the stand that the adverse comments by the Reviewing Officer were pre-meditated. The incident is:

Incident No.4	(On being called by Shri DK Jha at his Office) I found that Shri Giridhar, ITI posted with me was already sitting in the chamber.
D K Jha:	Giridhar is not able to explain me anything about this matter, you tell me about it.
	I went through the assessment folder of M/s Polyflex (I) Limited for the A.Y 2003-04.
Hari Rao	Yes Sir, I have gone through what’s the problem?
D K Jha:	CIT has discussed this case with me. There’s no 11^th schedule in Section 80IA in this Act.
	I went through the Income-tax Act.
Hari Rao	Sir you are holding the Income-tax Act, 2006 and seeing the Section 80IA. What was 80IA in A.Y 2003-04 is now 80IB in 2006 Act. In the same Act you can find the old changes.
	I took out the relevant changes and showed the old provision.
D K Jha:	Ok that’s fine. But you have not written the reasons at all in the assessment order for disallowing the claim u/s 80IA.
	I went through the assessment order of M/s Polyflex (I) Limited for the A.Y 2003-04.
Hari Rao	Sir, the reason is clearly written at point no. 4 of the order. This is a continuing issue from the past years. In this year I went for a factory visit. Later I recorded the statement of Shri Jagdish Nagapal, technical head of M/s Polyflex (I) Limited.
D K Jha:	Let me see it.
	Shri D K Jha went through the assessment order of M/s Polyflex (I) Limited for the A.Y 2003-04.
D K Jha:	Your order is not at all a speaking order.
Hari Rao	Sir, the original order was very detailed and Narendra Kumar Sir advised me to keep it short as the same matter was already in appeal.
D K Jha:	If Chandramouli would have been there, he wouldn’t have done it this way.
Hari Rao	Yes Sir, He’s Chandramouli and I’m Hari Rao. But if you were my boss I would have done the way you would have instructed it. Since my boss was Narendra Kumar Sir I did the way he has instructed me to do it.
D K Jha:	Ok. But I’m trying to protect you from CIT.
Hari Rao	Sir there’s no need to protect me from CIT as I’ve done no action which is malafide. The action which is bonafide also you take out small mistakes and make it very big.
D K Jha:	What to do I have to explain that to CIT?
Hari Rao	Sir that’s your problem. If I can explain you my problem then you should be able to explain your problem to CIT. Your action of fault finding rather than helping is creating general sense of unrest. We spend active part of life at office and ever since you took over there’s no fun at work place.
	After some more discussion on the issue of grounds of appeal the discussion came to an end. When I and Giridhar were walking out with files back to our Room I noticed, Shri Anurag Sahay, Addl. CIT(HQ) was already sitting in the room, whom I wished. Immediately outside the door I got confronted with Shri Sushil Mantri of M/s Mantri Group with whom I exchanged pleasantries as I was the authorized officer at the business premises of M/s Mantri Group.

79. Without prejudice to anyone, based on my experience till now, I humbly submit that I have all the reason to believe that the Reviewing Officer colluded with Shri D K Jha, Addl. CIT, CR-1 to fix me. THE REAL STORY- When no fault could be found in the core area of my work for the year 2006-07, the Reviewing Officer alongwith Shri D K Jha, started looking for faults committed right form perusing the proforma of ACR to all other areas. The Reviewing Officer without even cross checking that whether its my responsibility to fill the ACR, whether it’s the work for the year 2006-07, whether all the facts were considered in inspection, whether honest and bonafide opinion in reports should be construed as defiance, whether hearsay can be a deciphered as fact and host of other issues were taken as the basis for making adverse remarks in my ACR for the year 2006-07.

80. I’m very happy and sad at this moment. I’m happy because I’m able to highlight the greater design and prevailing work culture under the leadership of Shri A K Agarwal, CIT (Central). The same could not have been possible if my incident would not have come to light. I’m sad and contrite because it was an extremely traumatic experience for me and my family. I have learnt a very hard way that in the present regime at Central Charge ,“good work is not all about dodging the bullets from front while at war but saving your back from your own superiors.”

81. The image of the Officer at the level of ITO/AC/DC will be purely made by the Officer in the rank of Jt./Addl. CIT and CIT to the DGIT or CCIT. If the Officer in the rank of Jt. /Addl. CIT and CIT come together and create unhealthy campaign for the assessing officers then the Officer in the rank of DGIT and CCIT will be unaware of the ground reality.

82. It’s a generally known fact that Officers of higher caliber are selected in Investigation Wing and Central Circle. This fact is further certified by the fact that it’s a special pay post. It’s a matter of record and verifiable that I’ve participated in maximum number of search cases at Bangalore between the years 2001-2007. The ability to take responsibility is verifiable not only from participation in searches but also from my pending work related to search assessments, regular assessments, scrutiny reports, rectification applications, Pre & post investigation in Survey cases, budget collections, my contribution to Canteen as a Chairman, as a member of ITRC, as a member in various PAC meetings, as a member of IRS, participation in sports and cultural activities, taking classes in RTI, Bangalore, active participation in trekking conducted by Youth Hostel Association of India, etc. If I was ever CASUAL at work as alleged by the Reviewing Officer then my working profile would’ve been quite opposite.

83. To the whole proceedings of ACR, the “Principle of Natural Justice” becomes the cornerstone. I take the effort to bring out the principle in order weigh “whether the Reviewing Officer has followed the Principle while giving the adverse remarks in my ACR for the year 2006-07”.

Principle of Natural Justice- Natural justice is a legal philosophy used in the determination of just, or fair, processes in legal proceedings. Natural justice operates on the principles that man is basically good, that a person of good intent should not be harmed, and one should treat others as one would like to be treated. Natural justice includes the notion of procedural fairness and may incorporate the following guidelines:

· A person accused of a crime, or at risk of some form of loss, should be given adequate notice about the proceedings (including any charges).

· A person making a decision should declare any personal interest they may have in the proceedings.

· A person who makes a decision should be unbiased and act in good faith. He therefore can not be one of the parties in the case, or have an interest in the outcome. This is expressed in the Latin maxim, nemo judex in sua causa: "no man is permitted to be judge in his own cause".

· Proceedings should be conducted so they are fair to all the parties - expressed in the Latin maxim audi alteram partem: "let the other side be heard".

· Each party to a proceeding is entitled to ask questions and contradict the evidence of the opposing party.

· A decision-maker should take into account relevant considerations and extenuating circumstances, and ignore irrelevant considerations.

· Justice should be seen to be done. If the community is satisfied that justice has been done, they will continue to place their faith in the courts.

84. If all my submissions to the adverse remarks of the Reviewing Officer are taken into consideration then the general approach of the Reviewing Officer all along with me was as under:

· The Reviewing Officer accused me of a crime, and I had a risk of loosing my promotion, but I was never given adequate notice about the proceedings (including any charges).

· The Reviewing Officer never declared his caste and personal prejudices while making a decision and also failed to declare the personal interest as it had direct bearing in the proceedings.

· The Reviewing Officer who was making a decision was biased and did not act in good faith.

· The Reviewing Officer never conducted the proceedings in a fair manner to all the parties - expressed in the Latin maxim audi alteram partem: "let the other side be heard". On the contrary Shri A K Agarwal CIT (Central) even mentioned the HERESAY as FACT about my version from Shri D K Jha, Addl. CIT, CR-1

· The Reviewing Officer never encouraged to ask questions and contradict the evidence, rather strictly followed ‘Hierarchical game’. The Reviewing Officer was intolerant to any free and fair opinion and also treated ‘Difference of opinion as dissent and defiance’.

· The Reviewing Officer has never taken into account my core work for the year 2006-07 and extenuating circumstances, but gave undue important to irrelevant considerations. The Reviewing Officer all along suppressed not only my good work but deliberately highlighted the peripheral and lesser important issues in order to present a distorted and lopsided picture. The Reviewing Officer rather than appreciating my operational difficulties about the lack of manpower, which was very much within the knowledge, made it as basis for the adverse remarks in my ACR.

· From the approach of Reviewing Officer it can now clearly be seen that the Justice was not done and was never seemed to be done.

85. With a heavy heart, I express that every piece of the ‘PRINCIPLE OF NATURAL JUSTICE was not only violated but was torn apart by Shri AK Agarwal, CIT (Central) while making the adverse remarks in my ACR for the year 2006-07.

86. With due humility I again bring to your notice the adverse remarks by the Reviewing Officer in my ACR. It’s an exercise to align with the view of all the superiors so as to bring out whether the basic fundamentals about writing an ACR have been violated or not? The relevant portion of PART V communicated to me is reproduced for your ready reference as under:

“PART-V- To be filled in by Reviewing Officer:

3. General Assessment :

Comments of Reporting Officer

The Officer has achieved the Budget Collection etc. He has not reported upon other targets such as targets arrear demand collection, net collection out of current demand etc. There also his efforts were very good. He has completed good quality assessment in the Deepak Cables Group of cases. He has also followed post-survey enquiries in the case of KBDL and Chaitanya Properties Ltd., with perseverance. He is a good team person”

Comments of Reviewing Officer

“Whether the Reviewing Officer has agreed on the remarks of the Reporting Officer? – The extract of your ACR in respect of Part V as written by the Reviewing Officer is as under:

“Yes, Except for Column 17(b) where I rate him as Good only”

It may be mentioned here that column 17(b) related to the grading on Officer’s : Knowledge on procedure’.

Comments of CIT (appeals)

“Candid in approach. A very enthusiastic Officer, makes good passionate efforts to put his views through, in assessment order and remand report. Has given balanced views in remand report”

87. From the above comments it’s clear that the Reporting Officer, Reviewing and the CIT (A) have given positive comments and have found no less energy with my overall personality. Reviewing Officer by endorsing the opinion of Reporting Officer had no reason for creating adverse situation in my ACR on presumptive procedural grounds. The writing of ACR of a person reported upon can never be based on non-filling of Proforma or mistakes in report as it is not a fault finding exercise.

88. The basic tenets for writing an ACR have been violated by the Reviewing Officer in my case as the Reviewing Officer has been totally subjective and partial. Even till now it’s inexplicable to me that how the grading of ‘Good’ in ‘Knowledge of Procedure’ by the Reviewing Officer becomes adverse in the overall grading of my ACR for the year 2006-07.

89. During the year 2006-07, the Reviewing Officer never appreciated my good work; neither helped in improving my work nor understood my operational constraints but waited eagerly all along to catch me on petty mistakes. Making non-issue an issue and completely ignoring the core work for making an observation in my ACR is a matter without a sense of proportion. The Reviewing Officer has all along suppressed not only my good work but deliberately highlighted the peripheral and lesser important issues in order to present a distorted and lopsided picture. Shri A K Agarwal, CIT Central has failed as a leader of the team, Fired bullets not only without any warning but violating the “DUE PROCESS OF LAW”

90. It has been generally observed in bureaucracy that the adverse comments, if any, in ACR is given by the Reporting Officer and the matter is appealed for expunging before the Reviewing Officer. Its true, since the Reporting Officer supervises the work of the Officer reported upon and monitor the work almost on daily basis. It’s seldom heard, that the Reviewing Officer makes an adverse comments by overriding the Reporting Officer’s finding of appreciation of the Officer Reported upon. It can happen only when the Reviewing Officer has concrete information which is not in the knowledge Reporting Officer.

91. This is rarest of the rare case where the Reviewing Officer is not only overriding the finding of the Reporting Officer on peripheral issues but also making adverse comments based on the hearsay version of another Senior Officer who is not at all the Reporting Officer. It also raises a deeper question “that an Officer Reported upon had an unblemished and outstanding career till Shri Narendra Kumar Addl. CIT, CR-2 was in-charge for the year 2006-07. But what could have happened in just two months when Shri D K Jha, Addl. CIT, CR-1 took over and held it as an additional charge, and the Officer reported upon was suddenly found to be CASUAL.

92. I really thank my stars that Shri Narendra Kumar, Addl. CIT CR-2 relinquished charge at the end of January 2007 and did not get transferred in December 2006. By virtue of this Shri Narendra Kumar, Addl. CIT CR-2 remained the Reporting Officer. The sequence of events and circumstances clearly indicate that if Shri Narendra Kumar, Addl. CIT CR-2 was transferred when 3 or more months were to spare then I would have definitely got ADVERSE in my ACR for the year 2006-07 by both the Reporting Officer as well as Reviewing Officer, as the Reporting Officer would have been Shri D K Jha, Addl. CIT, CR-1.

93. At this stage I make my representation humbly that none of the observation made by the Reviewing Officer is tenable. Then why the Reviewing Officer and Shri D K Jha Addl. CIT- CR -2 were having bias of prejudices. I am not able to still correlate whether these biases are because of any of assessee or, my investigation in case of an assessee or for reasons other than my work.

94. Working at Investigation wing and Central Circle are the job at crisis. The Officer at the field level literally surrenders their personal lives by ignoring their families. Since there is an absolute teamwork one comes to the help of the other in distress. I express allaying my fears that Shri A K Agarwal and Shri D K Jha are jointly responsible for destroying the fine balance which all along existed at Central Circle. I honorably request you to conduct an impartial inquiry into this case and holding meetings with various Officers and Officials to know the general mood under the leadership of Shri A K Agarwal, CIT (Central). It’s suggested only with a bonafide belief and to prevent such devastating occurrences in future.

95. I pray again humbly for justice and nothing else before the Accepting Authority. I bring my case for representation before your good self by requesting you that my overall grading must be done based on my overall performance for the year 2006-07. I also submit graciously that It would my pleasure to personally appear before the Accepting Authority if an opportunity is given to substantiate any clarification on the submissions made by me.

Thanking you.

Yours faithfully,

(S S HARI RAO)

DCIT,TDS 18(1), Bangalore.

S S Hari Rao

Deputy Commissioner of Income-tax,

TDS 16(3), Room No. 403, HMT Building,

Mekhri Circle, Bangalore.

DO. F.No. TDS 16-3/Confdl/07-08 Dated 10.09.07

Dear Sir,

Sub: Confidential Report for the year 2006-07-

Adverse remarks- communication of- reg

Ref: D.O.C.No. Confdl/AR/SSR/2007-08/CC dated 29.08.07

Please refer to the above. The confidential letter was received by me on 03.09.09. I have gone through the letter and was taken by surprise after seeing the content. I’m reproducing the relevant extract as under:

“This is to bring to your notice that your Reporting/Reviewing Officer has made adverse remarks in your ACR for the year 2006-07. The intention of communicating these remarks in your ACR is to make you aware of the shortcomings pointed out so that you can overcome the same in future.”

From the above paragraph you may please clarify the following points:

1. Whether the remarks are advisory or adverse in nature?

2. Whether the remarks are exclusively of Reporting Officer and Reviewing Officer or both Reporting Office and Reviewing Officer?

3. What was the basis upon which these conclusions were drawn?

4. What is the impact of such an observation on my career?

Furthermore, the relevant extract of your letter is again reproduced as under:

“PART-V- To be filled in by Reviewing Officer:

3. General Assessment :

I’m aghast of the general observation of the Reviewing Officer as none of the observation as stated above was ever communicated to me during the financial year 2006-07.

In order to reply to the above general observation of the Reviewing Officer I raise the following points:

1. “The officer is intelligent but is casual in his approach to work”? What was the material used by the Reviewing Officer to make such an observation? Why the observation as stated above was never communicated to me during the financial year 2006-07? A Copy of Part I of the proforma to be supplied relating to the general observation.

2. “Even in the ACR proforma here, he has not given targets and achievements in all the important areas.” Why the observation as stated above was never communicated to me during the financial year 2006-07? A Copy of the ACR where targets and achievements in all areas as mentioned by me to be supplied relating to the general observation.

3. “The details of leave was incorrectly shown which was later corrected”. Why the observation as stated above was never communicated to me during the financial year 2006-07?

4. “The required information regarding reporting officer and reviewing officer are not filled in while Part-I of the proforma.” Why the observation as stated above was never communicated to me during the financial year 2006-07? A Copy of material to be supplied relating to the general observation.

5. “This casual Approach is also seen in the maintenance of records, submission of scrutiny and other reports.”? What was the material used by the Reviewing Officer to make such an observation? Why the observation as stated above was never communicated to me during the financial year 2006-07? A Copy of Part I of the proforma to be supplied relating to the general observation.

I further importune you and seek the following information:

What were the remarks of the Reporting Officer?
Whether the Reviewing Officer has agreed on the remarks of the Reporting Officer?
A Copy of Part V to be supplied relating to the general observation.

I’m required to represent against the remarks of your letter within 30 days. I can make the representation only when the above materials are available to me. Since your good self have to supply these materials, I request you to give me 30 days for representation which should start only after you have made available the material to me as per my request.

With due regards

Yours sincerely

Sd/-

(S S HARI RAO)

To,

Shri Anurag Sahay,

Additional Commissioner of Income-tax(Hqrs.)(Admn.)(Vig.)

O/O CCIT, Bangalore-I,

Bangalore.

F.No. TDS 16-3/Confdl/07-08 Dated 14.09.07

To,

Shri Anurag Sahay,

Additional Commissioner of Income-tax(Hqrs.)(Admn.)(Vig.)

O/o CCIT, Bangalore-I,

Bangalore.

Sir,

Sub: Confidential Report for the year 2006-07-

Adverse remarks- communication of- reg

Ref: F.No. Confdl/AR/SSR/2007-08/CC dated 11.09.07

Please refer to the above. I’ve received your letter on 13.09.07. I thank you for supplying me the copy of materials as I had requested. For the other materials you have already referred the matter back to the Reviewing Officer. You have stated that the material will be supplied to me as and when you receive it from the Reviewing Officer. I also thank you for giving me ample time for making the representation.

I had raised the following queries and your responses to the queries were as under:

What were the remarks of the Reporting Officer? - You have supplied me the material.
Whether the Reviewing Officer has agreed on the remarks of the Reporting Officer? - You have been silent on this issue. The copy of this material is needed in order to ascertain the principle of equity and justice was applied in my case or not. I request you again to supply me this material. It’s also learnt that the same material has been given to my colleague against whom similar proceeding is in progress.
Copy of Part V to be supplied relating to the general observation. - You have relied on DP & AR O.M No. 51/3/74-Estt(A) dtd. 22.05.2007, for not supplying the Copy of Part V. I request you to supply me a copy of DP & AR O.M No. 51/3/74-Estt(A) dtd. 22.05.2007.

Apart form the above, your letter is also silent about my basic query that “why the general observation which lead to adverse remarks by the Reviewing Officer was never communicated to me during the financial year 2006-07”.

I thank you for your cooperation and request you again to do all possible and assist me in this regard.

Thanking you.

Yours faithfully,

Sd/-

(S S HARI RAO)

DCIT,TDS 18(1), Bangalore

F.No. TDS 16-3/Confdl/07-08 Dated 19.09.07

To,

Shri Anurag Sahay,

Additional Commissioner of Income-tax(Hqrs.)(Admn.)(Vig.)

O/o CCIT, Bangalore-I,

Bangalore.

Sir,

Sub: Confidential Report for the year 2006-07-

Adverse remarks- communication of- reg

Please refer to the above. This is further to my letter dated 14.09.07. I’m still waiting for the material as requested in the earlier letter. Further, I seek information about my ACR which is requested as under:

Comments of CIT(Appeals) in my ACR- a copy is needed.
What has been the overall grading of the Reviewing Officer in my ACR.

I thank you for your cooperation and request you again to do all possible and assist me in this regard.

Thanking you.

Yours faithfully,

Sd/-

(S S HARI RAO)

DCIT,TDS 18(1), Bangalore

F.No. TDS 16-3/Confdl/07-08 Dated 08.10.07

To,

The Chief Commissioner of Income-tax,

Bangalore-I,

Bangalore.

Sir,

Sub: Confidential Report for the year 2006-07-

Adverse remarks- communication of- reg

Ref: D.O.C.No. Confdl/AR/SSR/2007-08/CC dated 29.08.07

F.No. Confdl/AR/SSR/2007-08/CC dated 11.09.07

F.No. Confdl/AR/SSR/2007-08/CC dated 28.09.2007

Please refer to the subject mentioned above. This is further to my letter dated 19.09.07. I humbly thank you for supplying me the enclosures from the Reviewing Officer, based on which adverse conclusions in general assessment were drawn by the Reviewing Officer in my ACR for the year 2006-07.

The material supplied by you from the Reviewing Officer has led to certain grey areas which need to be cleared. Without clearing the grey areas I’ll be in a disadvantageous position. I will not be able to fully represent my case before you. As the time is running out and in order to save time, I suggest the following:

1. I may be allowed to personally inspect and take the copies of inspection report of Hon’ble CIT-Central in the case of my work relating to A S Chinnaswamy Raju and V Srinivasa Raju available at the office of Hon’ble CIT-Central, Bangalore.

2. I may also be permitted to take the copies of all my work as supplemented in the letter F.No. ACR/CC-1(1)/CIT(C)/06-07 dated 26.09.2007 which are available at the office of Hon’ble CIT-Central, Bangalore.

3. I further request you to supply me the copies of Part I, II and V of the ACR from the year 2001-02 to 2005-06. I request you to furnish the remarks of the Reporting/Reviewing Officer for the same period.

4. I would like to humbly ask you that whether you have observed any infirmity of the Reviewing Officer in my ACR. If yes, please furnish me the copy of the same.

5. Only 21 days are left to make representation, therefore I request your good self to coordinate and intimate me at the earliest for the above request. Keeping equity and justice in mind I reiterate that without fulfilling the above request I will not be able to represent my case.

6. I request you to give me 21 days time for representation which should start only after adhering to my above request.

I thank you for your cooperation and inform you that I will give acknowledgement of every piece of information which I’ll collect in my defense. I request you again to do all possible and assist me in this regard.

Thanking you.

Yours faithfully,

Sd/-

(S S HARI RAO)

DCIT,TDS 18(1), Bangalore

F.No. TDS 16-3/Confdl/07-08 Dated: 10.10.2007

Place: Bangalore

To,

The Chief Commissioner of Income-tax,

Bangalore-I,

Bangalore.

Sir,

Sub: Retaining of material as per list-

Adverse remarks- communication of- reg

This is further to my letter dated 10.10.2007 on this subject. The Reviewing Officer has given adverse remarks in my ACR for the year 2006-07. The Reviewing Officer vide letter F.No. ACR/CC-1(1)/CIT(C)/06-07 dated 26.09.2007 has substantiated the basis on which the observation were made. In order to fully represent my case before you, I had requested ACIT CC-2(1) to give me the following files. The details are as under:

Sl. No	File taken Date	Description	Assessment Year	Page no.s From to
1	27.09.07	A S Chinnaswamy Raju	2003-04	1 to 501
2	05.10.07	A S Chinnaswamy Raju Regular Scrutiny	2002-03	1 to 90
3	05.10.07	A S Chinnaswamy Raju Reopened assessment	2002-03	1 to 77
4	05.10.07	V Srinivas Raju	2005-06	1 to 334
5	05.10.07	V Srinivas Raju	2004-05	1 to 368
6	05.10.07	V Srinivas Raju	2003-04	1 to 108
7	08.10.07	V Srinivas Raju	2002-03	1 to 7
8	08.10.07	V Srinivas Raju (Investigation Folder Vol – I)	-	1 to 235
9	08.10.07	V Srinivas Raju (Investigation Folder Vol – II)	-	1 to 132
10	08.10.07	V Srinivas Raju (Investigation Folder Vol – III)	-	1 to 347
11	08.10.07	V Srinivas Raju (Investigation Folder Vol – IV)	-	1 to 92
12	08.10.07	V Srinivas Raju (Investigation Folder Vol – V	-	1 to 38
13	08.10.07	V Srinivas Raju (Investigation Folder Vol – VI	-	1 to 72
14	08.10.07	V Srinivas Raju (Recovery Folder –I )	-	1 to 66
15	08.10.07	V Srinivas Raju (Recovery Folder –II )	-	1 to 24
16	08.10.07	Revati Raju ((Recovery Folder )	-	1 to 6

I have already acknowledged the receipt of the following files which were received by me through moment register. The order sheet noting in the files given to me also were serially numbered, the page numbers were also marked.

The file at serial number 1 was taken for TDS Survey in the same case. Whereas the balance files, have been taken to represent my case before you. I’m also given to understand that the above files have been de-notified. There is pressure from the higher-ups to send the files to their respective jurisdiction. I request you to give suitable direction to the Assessing Officer for retaining the files till the representation proceedings before you is not complete. I also request you to inform the same to CIT (Central) and Addl. CIT CR-2.

I thank you for your cooperation at all times. I request you again to do all possible and assist me in this regard.

Thanking you.

Yours faithfully,

Sd/-

(S S HARI RAO)

DCIT,TDS 18(1), Bangalore

CC to:

The Director General Of Income-tax (Investigation), Karnataka and Goa.
The Commissioner of Income-tax (Central), Bangalore.
The Addl. Commissioner of Income-tax (Central Range -2), Bangalore.
The Asst. Commissioner of Income-tax Central Circle-2(1), Bangalore.

F.No. TDS 16-3/Confdl/07-08 Dated 25.10.07

To,

The Chief Commissioner of Income-tax,

Bangalore-I,

Bangalore.

Sir,

Sub: Confidential Report for the year 2006-07-

Infirmity of the Reviewing Officer in my ACR - reg

Ref: D.O.C.No. Confdl/AR/SSR/2007-08/CC dated 29.08.07

F.No. Confdl/AR/SSR/2007-08/CC dated 11.09.07

F.No. Confdl/AR/SSR/2007-08/CC dated 28.09.2007

DOC.No. Confdl/AR/SSR/2007-08/CC dated 23.10.2007

Please refer to the subject mentioned above. This is further to my letter dated 24.10.07. I had raised the following query in my letter:

1. I would like to humbly ask you that whether you have observed any infirmity of the Reviewing Officer in my ACR. If yes, please furnish me the copy of the same.

For the above observation your good self had replied vide letter DOC. No. Confdl/AR/SSR/2007-08/CC dated 23.10.2007. The relevant extract of the same is reproduced for your ready reference as under:

4. Observation of infirmity, if any, in the remarks of the Reporting/ Reviewing Officer is within the domain of DGIT (Inv), Bangalore, the Competent Authority to decide on your representation, if any.

Sir, your first letter dated 29.08.07 had intimated the adverse comments in my ACR given by the Reviewing Officer. The basis of the adverse remarks in my ACR was based on the General Assessment of the Reviewing Officer. The relevant extract of the General Assessment communicated to me is being reproduced as under:

“PART-V- To be filled in by Reviewing Officer:

3. General Assessment :

The officer is intelligent but is casual in his approach to work. Even in the ACR proforma here, he has not given targets and achievements in all the important areas. The details of leave was incorrectly shown which was later corrected. The required information regarding reporting officer and reviewing officer are not filled in while Part-I of the proforma. This casual Approach is also seen in the maintenance of records, submission of scrutiny and other reports.”

Based on my request vide letter dated 10.09.2007 you have supplied me the copy of Part –I of the ACR vide your letter dated 11.09.2007 in order to explain the basis on which the Reviewing Officer has given the adverse remarks in my ACR. While perusing the material supplied by you I’ve noticed an infirmity of the Reviewing Officer in my ACR for the year 2006-07.

According to PART – I proforma of the ACR, it can be seen that there is clear mention in the ACR itself that it has to be filled by Administrative Section of CCIT (CCA). Certification of the same, by Shri S K Iyer, the then CCIT (CCA), reaffirms my view. Therefore, the Reviewing Officer observation that ‘I was casual while filling the PART - I proforma of the ACR,’ can never become, as one of the basis of adverse comments in my ACR for the year 2006-07. The observation of Reviewing Officer about the work of CCIT-CCA in my ACR about PART-I Proforma is an infirmity which should have been suggested by the nodal officer for correction by the Office of CCIT-CCA itself.

Sir, I just seek your guidance on the following issue and in the interest of justice. The query is as under:

“Can the adverse remarks of the Reviewing Officer about the work of the Administrative Section of CCIT (CCA) can become part of my ACR?”

Sir, I request you to take remedial action about the infirmity in the General Assessment of Reviewing Officer in my ACR. With due humility I state that the infirmity of Reviewing Officer in my ACR is not in the domain of DGIT (Inv) but CCIT-CCA, as the adverse remark of the Reviewing Officer is for CCIT-CCA and not for DGIT (Inv). I also request to intimate me the action taken along with your comments on my query.

I also express that by not giving me the opportunity for personal inspection of my work at CIT (Central)’s Office as per my letter dated 8.10.07, 22.10.07 and 24.10.07 I’m in a disadvantageous position to represent my case. I’m also constrained to state that there has been no communication to my request for the letter dated 10.10.2007 as there has been tremendous pressure on the assessing officer to send back the assessment folders. I’m still waiting for a line of reply. But still I thank you for your cooperation at all times. I request you again to do all possible and assist me in this regard.

Thanking you.

Yours faithfully,

Sd/-

(S S HARI RAO)

DCIT,TDS 18(1), Bangalore

F.No. TDS 18-1/Confdl/07-08 Dated 26.10.07

Place Bangalore

To,

The Chief Commissioner of Income-tax,

Bangalore-I,

Bangalore.

Sir,

Sub: Confidential Report for the year 2006-07-

Representation before the Competent Authority- reg.

Please refer to the subject mentioned above. This is further to my letter dated 25.10.07.

As directed by your good self vide letter DOC.No. Confdl/AR/SSR/2007-08/CC dated 23.10.2007. I submit my ‘Representation before the Competent Authority’, in my dense for the adverse remarks in my ACR for the year 2006-07.

I take this humble opportunity to express that it will be an extreme pleasure for me to appear before your good self and clarify all the matter which needs clarification as per my representation before you.

Thanking you.

Yours faithfully,

Sd/- (S S HARI RAO)

DCIT,TDS 18(1), Bangalore

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Friday, December 26, 2014

Basis of Spoiling my ACR by AK Agarwal/DK Jha/Surreptitiously supported by Anurag Sahay - Despite this B R Sudhakara helped the same group to launch Vigilance action

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