Vigilance Silent on Unscruplous Officers

F.No. JC-1/Range-III/2009-10                                        Date: 30.07.2009

To,

Shri Madhavan Nair,

The Director General of Income-tax (Investigation),

Karnataka & Goa,

Bangalore.

Sir,

          Sub:   Request for vigilance in the search case of

M/s Ferns Builders and Developers- reg.

                                                  

          Ref:    1. F.No. DC-1/C-18(1)/2009-10  Date: 11.05.2009

2. Board’s Letter No. 39012/2/2008 –Ad. VIA

   Dated 10.11.2008.

                    3. Letter No. F.No, 225(5)/SSHR/2008-09/CCIT-1,

    Dtd 10.11.2008.

                                                     ******

While proposing for processing a reward case for the work done in the capacity of DDIT (Inv), Unit II (3), Bangalore I am bringing an incident which has deeper impact on the credibility of my work which I did all along on one hand. On the other it is about the senior officers like Shri A K Agarwal, the then  CIT (Central) and Shri D K Jha, the then Additional CIT (Central) Range -1, Bangalore who orchestered to see that I was maligned and blemished to that extent that I may never wake up to start my life with dignity anytime in future. I am bringing this submission as the allegations are still haunting me even after recently getting promoted as a Joint Commissioner at Madurai.

I had conducted a search in the group case of M/s Fern Builders and Developers in March 2005. The core finding of the search beside other issues was that the assessee was following project completion method whereas the legal position was to follow the percentage completion method as per AS-7 of accounting standards as prescribed in ICAI guidelines. The same findings were made in the appraisal report by me.

Subsequently the case was notified to Central Range – 1 and was assessed with Shri U R Chandramouli. The assessing officer prepared the draft order which was exactly opposite to the findings made in the appraisal report. The CIT (Central) and Addl. CIT (Central) wrote a note on justifying the stand of the assessing officer which was quite contrary to the recommendation made in the appraisal report. The copies of these recommendations are part of the official record and are present in the offices of Central Circle and Investigation Wing. It’s procedural that when there is disagreement between the Investigation Wing and the Central Circle the matter is first attempted to be resolved through written communication at the level of Addl. CIT (Central)/ Addl. DIT (Inv.). If it’s not resolved then the matter is resolved by having a meeting between DIT (Inv)/ CIT (Central).

Later, Shri D K Jha, Addl. CIT (Central) wrote a letter to Shri Ajit Korde, the then Addl. DIT (Inv.) justifying the stand taken by the assessing officer. Before the reply of the Addl. DIT (Inv.) was received, Shri U R Chandramouli got transferred to Bellary. Shri N Satyamoorty replaced Shri U R Chandramouli as the new incumbent. Subsequently the Addl. DIT (Inv.) replied by backing the findings made in the appraisal report.

A meeting was held between Shri Abhay Kumar, DIT (inv.) and Shri A K Agarwal, CIT Central along with other officers discussed keeping the draft order prepared by Shri Chandramouli as the subject matter. The meeting was adjourned as Shri N Satyamoorty; the new assessing officer favored the findings made by the Investigation Wing in their appraisal report than the draft assessment order prepared by the earlier assessing officer. Very soon the hard work of the new incumbent changed the entire scenario as the assessee filed a declaration accepting the findings made in the appraisal report. The effort of Shri N Satyamoorty vindicates the stand which he had taken all along vis-à-vis the contrary stand taken by the CIT (Central) and the Addl. CIT (Central) from the beginning of the case.

The stand of CIT (Central) and the Addl. CIT (Central) was prejudicial to the interest of revenue as by giving effect the revenue would have lost more than Rs. 4 to 6 Crores. Why the effort of the new incumbent should be hailed? The offering of a voluntary declaration of the assessee is not beneficial to the assessee as it does not enhances much the capital because the offer gets linked more to interest  paid U/s 234 B & C of  Income-tax Act than to the payment of tax.

The greatest role and the foremost requirement of Central Circle is to convert the findings made in the appraisal report to collectible demand through passing an assessment order. DGIT (Inv) meet is held annually for this purpose and the CIT (Central) is very much aware about it. It’s really shocking to know that Addl. CIT (Central) and CIT (Central) instead of defending the findings of Investigation Wing the senior officers from the very beginning were rallying hard to nullify the good work of the Investigation wing which would have definitely created huge revenue loss to the National Exchequer. It raises doubt over the conduct of CIT (Central) and Addl. CIT (Central) because when the effort of a new incumbent in couple of weeks could salvage a case where huge revenue was involved then it’s quite natural that senior officers could have made the same initiative as they were more acquainted with the charge.

          Sir, why I have cited this case as a rarest of the rare case? The officers at the helm of CIT (Central) and Addl. CIT (Central) were working against their own Investigation Wing while in the same office the sincere effort of a new incumbent brought an assessee, after more than two years, to file not only a voluntary letter of disclosure but also subsequently paying all the taxes made by such disclosure. Sir, it is in the knowledge of the department that no assessee after two years will come and simply file a letter voluntarily for disclosure involving huge revenue implications especially when the senior officers are supporting them. Therefore from this angle it is a rare case as it can be reasonable interpreted that the case has been wrestled out from the malafide interest of CIT (Central) and Addl. CIT (Central) which needs a thorough probe.  

Sir I am also ready to appear before you and certify the whole situation which highlights my good work for more than a year which was denotified by CIT (Central) while pending investigations were on involving huge revenue impact in a bogus windmill transaction.

          Sir, furthermore let me also bring to your notice what environment prevailed during the leadership of Shri A K Agarwal by citing an incident. Shri U R Chandramouli is the same officer who was covered by CBI for alleged destruction of evidence in a Survey case at the Central Range - 1 charge. In the same case the role of Shri A K Agarwal, CIT (Central) and Shri D K Jha, Addl. CIT (Central) have been questioned. Why I’m bringing this to your notice because the senior officers were comparing me and humiliating me in front of an Inspector of Income-tax that I was not as capable as U R Chandramouli. Though I have cited this incident in the earlier letter but to refresh the memory I’m presenting it again as “Annexure- A.”  It will also silently mention what was the climate of working under the leadership of CIT (Central) and how ACR was used as a tool to tame the officers. By checking the grading in ACR of I and Shri U R Chandramouli in the same year one can make reasonable finding of the maligned office environment.

Sir, it is very much to the knowledge of the department that working in the Investigation and Central Circle is the most difficult period in one’s life as we are more bothered about bullet from front. In both the places when I worked, I had a tough time. Unable to bear the pressure I volunteered to come out from Investigation Wing after working for just one year’s time. The same can be informally verified from Shri Ronmoy Das, DIT (Inv.) Kolkota. Subsequently to avoid the wrath of senior officers as I was not towing their line for their ulterior motive I again volunteered to come out of Central Charge. Let me also bring this fact to your notice that it is a matter of record that “between the years 2001- to 2004, I have participated in the maximum search case in the whole country despite being outside the Investigation Wing and also doing some outstanding work in my substantial charge.”

Sir, why I’m bringing this case to you as I have faith that you will give me a patient hearing and justice which I was always deprived of. Secondly I have a strong belief that it’s your honorable office which was used to blemish me and my career. I seek justice before you by holding an impartial inquiry into my case as it will give me an opportunity to represent my case recommended for vigilance by the same senior officers who deprived me the opportunity to defend my case.

Sir, very few officers have the courage to stand and fight with senior officers having ulterior motive in this department. And I’ve done that. The very fact that I had put my papers as DCIT though I was in the zone of promotion as JCIT itself reflects that you need courage and conviction to start the life afresh at the age of 41. At this juncture for me it doesn’t make difference because after placing resignation to harass me using the vigilance route. I know the maximum impact is loosing a job through dismissal or removal. When I’ve already placed resignation it doesn’t affect me whether I’m removed or dismissed because, I’m also not in a pensionable zone.

Sir, I know that you will be empathical in my case and will know the suffering I and my family have gone through. Looking through my entire work from the date of joining this service till date will speak my contribution to Indian Revenue Service has been commendable. My resignation is withheld and pending vigilance clearance for more than an year. Till date I have never got any query form vigilance, instead I got promoted as Joint Commissioner which vindicates my stand too. Now I’m no longer interested in continuing with this esteemed department as I had gone through very tough time and do not enjoy the job anymore. I have lived all my life by exiting gracefully in a relationship. Since I joined the Civil Service with great degree of enthusiasm I want the same fervor to be maintained with this relationship while leaving. Therefore, I request you sir is nothing but an opportunity to exit gracefully the most prestigious job of this country by holding my head high as I have right for it. Please help me.

Thanking you.       

                                                              Yours faithfully

                                                                                                  Sd/-

(S. S. HARI RAO)

                                                          Joint Commissioner of Income-tax,

                                                                       Range – 3, Madurai

Copy to:

1.    The Director General Income-tax (Vigilance), New Delhi.

2.    The Director Income-tax (Vigilance), Chennai.

3.    The Chief Commissioner of Income-tax, Bangalore-I.

4.    The Commissioner of Income-Tax (Central), Bangalore.

Enclosures:

1.    ANNEXURE-1     Page 6 to 7

ANNEXURE- 1

Incident	(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 11th 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.