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:
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Manual of Officer Procedure: Volume-1
(Administrative)
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Page No.
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Point No.
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Description
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37
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23
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Functions of an
Assessing Officers
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37
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23.1
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The main functions of the Assessing
Officers are:-
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23.1.i
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Ensuring processing of returns on AST
module.
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23.1.ii
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Alloting PAN’s wherever required
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23.1.iii
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Making IRLA operational and ensuring that
all demands are entered into this system
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23.1.iv
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Ensuring all software packages prescribed
by the DIT (Systems) are made operational
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23.1.v
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Seeing that all taxpayers grievances are
attended in time and redressed in fixed time bound manner.
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23.1.vi
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Ensuring timely collections of demand and
issue of refunds.
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23.1.vii
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Selection of cases for scrutiny in time
and ensuring their timely disposal
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23.1.viii
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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
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23.1.ix
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Taking all necessary steps for widening
of tax base.
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23.1.x
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Internal audit functions
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23.1.xi
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Ensuring that appeal effects are given
and central scrutiny reports are submitted in time
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23.1.xii
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Statutory functions
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40
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27
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Functions of
Office Superintendent
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42
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27.4
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Work relating to assessment and related
functions
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43
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27.4.ii.p
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Proper Maintenance of Records including
placement of all papers, specially returns, forms TDS certificates etc. on
records by way of conducting test checks.
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56
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30
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Functions of a Tax
Assistant
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58
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30.3
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Work relating to assessment and related
functions
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58
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30.3.iv
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Proper placement and processing of all
papers including those regarding advance tax, partnership deeds, challans,
advice notes etc. in the case records
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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 1st limb about the adverse remark made by the Reviewing Officer
on this reason is not only sustainable but a petty remark.
11.
The 2nd 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 3rd 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 1st ground of the adverse remarks, in my ACR for the 3rd 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 1st
ground of the 3rd 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.
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.
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.
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.”
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.
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.
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 1st ground of 3rd 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 2nd ground about
the adverse remarks in my ACR for the 3rd 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.
“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)
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 2nd
ground of the 3rd 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:
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.
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.
“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.
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:
|
33
|
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
To
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, 10th
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:
|
94
|
07.07.06
|
Inspectors Report
|
V
Srinivasa Raju
|
50
|
Rec. Proc-I
|
Inspectors Report
On 7th
July 2006, I visited the premises of M/s Unnathi Projects Ltd., 10th
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 7th
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
|
30
|
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
To
Shri
V Srinivasa Raju
No.12,
10th 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:
|
96
|
12.09.06
|
281B 2nd Proposal
|
V
Srinivasa Raju
|
6
|
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
To
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 2nd ground of 3rd 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 3rd
ground about the adverse remarks in my ACR for the 3rd 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.
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.
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 3rd ground of 3rd 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 4th ground about the adverse remarks in my ACR for the 3rd 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:
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.”
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.
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.
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.
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.
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 4th ground of 3rd
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 5th ground of the adverse remarks in my ACR for the 3rd 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.”
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.
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 5th ground of
3rd 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 6th ground of
the adverse remarks in my ACR for the 3rd 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 6th ground of 3rd
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 7th
and final ground of the adverse remarks in my ACR for the 3rd 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:
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.
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 7th ground of
3rd 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 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.
|
|
|
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 :
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.”
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 :
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.”
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
