F.No. DC-1/C-18(1)/2009-10 Date: 11.05.2009
To,
The
Hon’ble Chairman
Central
Board of Direct Taxes,
Sir,
Sub: Request
for keeping the resignation letter in abeyance- reg.
Ref:
1. Board’s Letter No.
39012/2/2008 –Ad. VIA
Dated
10.11.2008.
2. Letter No. F.No,
225(5)/SSHR/2008-09/CCIT-1,
Dtd
10.11.2008.
******
It was conveyed to me by the CCIT- CCA, Bangalore
Sir, I have served the Government of India with utmost
devotion to duty and integrity at workplace ever since I joined the Department
on 20.09.1999. It can be perused from my
records that I had an outstanding career all along. For the past couple of years I had very
tough time at workplace despite giving the best of my efforts. I was harassed and
victimized at workplace by Shri. A K Agarwal, CIT and Shri. D K Jha, Addl. CIT
for their ulterior motives and also because of their caste prejudices to the
community I belong to. Attempts were made by the above senior officers to
malign my career by spoiling my ACR for the financial year 2006-07. But the adverse
comments were expunged by the representing authority Shri B R Sudhakara, the
then DGIT(Inv).
Sir, the necessary inquires have been pending despite the
fact that the administration at Bangalore
Gist of
events
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Sl.No.
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Description
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Inquiries
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1.
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During
the ACR process I had suggested the administration to conduct independent
inquiries for the incidents which are related to the harassment which are
being annexed as ANNEXURE-2. The
same was brought to the notice of administration during the process of ACR
representation but no independent inquiries were made by the administration
till date.
The
incidents are:
a. Threatening call of Shri D K Jha, Addl. CIT that
Shri AK Agarwal, CIT will make me loose my job.
b. Forcing me to alter my independent view and using
the same against me for spoiling my ACR.
c. Shri AK Agarwal’s comment on caste prejudices during
the official meeting.
d. Humiliating me in front of an Inspector of
Income-tax for the ignorance on the subject of law and also comparing about
work with an officer who is now alleged for misdemeanor and also the above
senior officer’s involvement has been questioned by CBI.
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Pending
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2.
|
During
the financial year 2007-08, Shri. A K Agarwal, CIT was the reviewing officer
and Shri Narendra Kumar, Addl. CIT was the reporting officer. The reporting
officer gave me a fair ACR and the reviewing officer converted the fair ACR
into adverse. The irony is that never during the financial year 2006-07 the
reporting officer or the reviewing officer issued a single memo for slippage
at my work which is a compulsory prerequisite for adverse ACR. Futhermore,
the comments of the adverse remarks given by Shri. A K Agarwal, CIT was “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.” Regarding the comments of
CIT that I’m casual by not filling the Proforma–I cannot be attributed to me,
as the responsibility of filling the same was the work of the administrative
section of CCIT/CCA. The very fact that the Proforma-I was signed by Shri SK
Iyer, the then CCIT/CCA,
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Pending
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3.
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Sir,
subsequently during the process of my ACR Shri. A K Agarwal, CIT and Shri D K Jha, Addl. CIT further
harassed and victimized me when they found that I was rightfully representing
my ACR process. The episode relating
to this incident was also brought to the knowledge of administration by
forwarding the copy of letter dated 05.11.2007 written to DGIT(Inv),
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Pending
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4.
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Sir,
any administration is the custodian of morale and motivation in the entire
line of chain of command. The administration at
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Needed
|
Sir I’m also annexing my ACR representation as ANNEXURE-5 which will give the exact background
of the entire process of victimization and harassment process of Shri. A K Agarwal,
CIT, and DK Jha, Addl. CIT which compelled an officer to resort to resignation
from Indian Revenue Service.
Sir, this is not the story of an officer who worked only
with total zeal and enthusiasm during the normal times but also in the most
difficult times. The period of ACR process was the turbulent time and during
this time my work at TDS Circle Delhi
Sir, why I request you to conduct an impartial inquiry
is because the interest of the outstanding performers must be guarded always
against the superior officers having malafide interest. And it also because
that before I leave this esteemed job, I have taken the onus to highlight the
serious human relation issues at my end so that the officers like me will not
suffer anywhere and anytime in future. The expression from my side should be
considered as the exit feedback for having worked for this wonderful
organisation for almost a decade.
Therefore, I request you again to
conduct independent inquiries against Shri. A K Agarwal, CIT and Shri D K Jha,
Addl. CIT who not only victimized and harassed me but grudgingly attempted to
spoil my unblemished career due to their own ulterior motives and caste
prejudices to the community I belonged to. Till the matter is not inquired into
I request your good self to keep my resignation letter in abeyance.
Yours faithfully,
Sd/-
(S. S. HARI RAO)
Deputy
Commissioner of Income-tax (TDS),
Circle-18(1), Bangalore
Copy to:
1.
The Member (Personnel and Grievances), CBDT, New Delhi
2.
The Director General Income-tax (Vigilance), New Delhi
3.
The Chairman, National
Commission for Scheduled Caste, New
Delhi
4. The Chief Commissioner of Income-tax, Bangalore
5. The
Director General Income-tax (Investigation), Karnataka and Goa .
6. The
Commissioner of Income-Tax (Central), Bangalore
7. The
Commissioner of Income-Tax (TDS), Bangalore
8. The
Addl. Commissioner of Income-Tax, Range-18, Bangalore
Enclosures:
1. ANNEXURE-1 Pages
6 to 7
2. ANNEXURE-2 Pages
8 to 11
3. ANNEXURE-3 Pages
12 to 14
4. ANNEXURE-4 Pages 15
to 17
5. ANNEXURE-5 Pages
18 to 99
ANNEXURE- 1
F.No.
DC-1/C-18(1)/2008-09 Date: 05.12.2008
To,
The Additional Commissioner
of Income –tax,
Range-18, Bangalore
Sir,
Sub: Intimation
regarding non reporting for duty-reg-
Ref: Letter No.
F.No, 225(5)/SSHR/2008-09/CCIT-1,
Dated
10.11.2008.
******
Please refer letter F.No.
Frwdg/Addl.CIT/R-16/18/2008-09 dated 18.11.2008.
This is to bring to your kind notice
that I wanted to gracefully leave the Department by holding my Head high. I have served the Government of India with
utmost devotion to duty and integrity at work place ever since I joined the
Department on 20.09.1999. It can be
perused from my records that I had an outstanding career all along. For the past couple of years I had very
tough time at work place despite giving the best of my efforts. I had been victimized by Shri. A K Agarwal,
CIT and Shri. D K Jha, Addl. CIT for their ulterior motives and also because of
their caste prejudices to the community I belong to. The administration at Bangalore
After placing the resignation with a
heavy heart, I had thought the process of harassment will be over. But again not to my surprise the
victimization launched by the above mentioned Officer’s still continues. It is at this juncture, I have come forward
to openly express my displeasure with the present setup by impudently
mentioning that this esteemed job for which I burnt midnight oil and got
selected is no more a source of job enrichment and contentment. In these circumstances I would like to
express you again that the passion for research in cooking is the focus of my
life hereafter. And I request you again
that this letter may be taken as final intimation for not joining back on
duty.
As I have already placed resignation
and the same has been withheld because of the malafide campaign launched by
Shri. A K Agarwal, CIT and Shri. D K Jha, Addl. CIT. The process for clearing
my resignation will be dealt by me as and when it comes.
I request you again till the date I am
relieved, I may be permitted to avail Extraordinary Leave as I am not in a
mental condition to work at the present job with the same zeal and enthusiasm
with which I joined this esteemed Service.
Yours faithfully,
Sd/-
(S. S. HARI RAO)
Deputy
Commissioner of Income-tax (TDS),
Circle-18(1), Bangalore
Copy to:
The Chief Commissioner of Income-tax-1, Bangalore
The Commissioner of Income-tax, TDS, Bangalore
ANNEXURE- 2
Incident No.1
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(During the inspection of cases
by the Reviewing Officer, Shri DK Jha called at intercom)
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D K Jha:
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Hari in the case of A S
Chinnaswamy Raju for the A.Y 2003-04, what is the status of penalty?
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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.
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D K Jha:
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You have not concluded the
penalty proceedings and you are in deep trouble and you will definitely loose
your job if I tell CIT.
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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?
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D K Jha:
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If I tell the same thing to CIT
you will definitely loose your job and you will be giving clarification on
this matter.
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Hari Rao
|
Yes sir, I will definitely give
the clarification on this matter to CIT.
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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.
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Incident No.2
|
(On being called by Shri DK Jha
at his Office)
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D K Jha:
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Yaar, you don’t know how to
write scrutiny report.
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Hari Rao
|
Sir, what happened and which
case?
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D K Jha:
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Its Srinivasa trust for the A.Y
1999-00 you have recommended no further appeal for the order of CIT
(Appeals).
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Hari Rao
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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.
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D K Jha:
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CIT is very annoyed for you not
recommending second appeal and you will be in problem.
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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.
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D K Jha:
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You have done a big mistake by
not recommending for second appeal and you just go through Rule 46A.
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Shri DK Jha gave to me the IT
Rules. After Going through Rule 46A I continued my discussion
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D K Jha:
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You change the scrutiny report
as per Rule 46A as I’m going to change my observation and resend the
proposal.
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Hari Rao
|
Sir, I stand on my views and I
don’t find any mistake and I’m going to stand on it.
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D K Jha:
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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.
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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.
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D K Jha:
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I will tell CIT and see what
best we can do.
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Incident No.3
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Shri AK Agarwal comments during an Official
Language Meeting on 13.04.2007.
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A K Agarwal
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In an official letter a lady
steno typed S
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My analysis
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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.
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Incident No.4
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(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:
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Giridhar is not able to explain
me anything about this matter, you tell me about it.
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I went through the assessment
folder of M/s Polyflex (I) Limited for the A.Y 2003-04.
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Hari Rao
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Yes Sir, I have gone through
what’s the problem?
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D K Jha:
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CIT has discussed this case
with me. There’s no 11th schedule in Section 80IA in this Act.
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I went through the Income-tax Act.
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Hari Rao
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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.
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I took out the relevant changes
and showed the old provision.
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D K Jha:
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Ok that’s fine. But you have
not written the reasons at all in the assessment order for disallowing the
claim u/s 80IA.
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I went through the assessment
order of M/s Polyflex (I) Limited for the A.Y 2003-04.
|
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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.
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D K Jha:
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Let me see it.
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Shri D K Jha went through the
assessment order of M/s Polyflex (I) Limited for the A.Y 2003-04.
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D K Jha:
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Your order is not at all a
speaking order.
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Hari Rao
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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.
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D K Jha:
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If Chandramouli would have been there, he wouldn’t have done it this
way.
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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.
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D K Jha:
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Ok. But I’m trying to protect you from CIT.
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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.
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D K Jha:
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What to do I have to explain
that to CIT?
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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.
|
ANNEXURE- 3
F.No. TDS 16-3/Confdl/07-08 Dated
25.10.07
To,
The Chief Commissioner of Income-tax,
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
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
ANNEXURE-4
F.No. TDS 18-1/07-08 Dated: 05.11.2007
Place: Bangalore
To,
The Director General of
Income-tax (Investigation),
Karnataka and Goa ,
Sir,
Sub: Actions of Hon’ble CIT (Central) and Addl. CIT (CR-1) - Reg.
On 02.11.2007, I personally met Shri B V Subbaraya, ACIT, CC-2(1), Bangalore
The call of Shri DK Jha to Shri B V Subbaraya has to be viewed keeping
the pending representation before the
Competent Authority relating to my ACR for the year 2006-07. In my
representation the basis of adverse remarks by the Hon’ble CIT (Central) was
replied in detail. The Hon’ble CIT (Central) had given the non
filling/insufficient filling of Proforma-I & II of ACR and seven cases as a
basis for making adverse remarks in my ACR. I had taken material through moment
register from the office of ACIT, CC-2(1). The matter of taking material was
also brought to the notice of Hon’ble CCIT-CCA vide letter dated 10.10.2007.
Subsequently the same was informed to your good self too. I submitted my
representation before the Competent Authority on 26.10.2007.
Sir, in my representation before the Competent Authority, I have brought
out an incident about the threatening call of Shri DK Jha, Addl. CIT, CR-1 on
my career. The matter is still pending clarification in my representation, “Whether the threatening call on my career
was the exclusive opinion of Shri DK Jha, Addl. CIT, CR-1 or was made by Shri
DK Jha, Addl. CIT, CR-1 on behalf of the Hon’ble CIT (Central)?” I have
also brought out an incident of the Hon’ble CIT (Central) displaying caste prejudices
at workplace. There were numerous incidents cited in representation, wherein,
the Hon’ble CIT (Central) had framed opinion about me by purely relying
on the version of Shri D K Jha
instead of clarifying the matter of
hearsay directly from me. This approach of Hon’ble CIT (Central) has violated
the Principle of Natural Justice.
Furthermore, the Hon’ble CIT (Central)
had not fairly assessed my work as
only my partial effort in the case was known to the Hon’ble CIT (Central), as
the assistance of Addl. CIT, CR-1 was
taken instead of the Addl. CIT,
CR-2, who was my immediate boss. I had also brought out a fact in the case
of Shri
V Srinivasa Raju, the inspection
of my case was carried out without
considering the crucial Investigation Folders and Recovery folders, which
is a serious lapse committed by the Hon’ble CIT (Central) while inspecting my
case.
Sir, my representation has also brought out in detail, that, ‘How Hon’ble CIT (Central) has violated
the Principles of Objectivity, Impartiality, Neutrality and Independence
Sir, I’m open to any sort of probe relating to my work by any Senior
Officer other than Shri A K Agarwal and Shri D K Jha. I’ll be happy as after
the completion of probe the decorum of any proceedings will be highlighted in
the best of manners. It has taken me more than 50 days to purely concentrate on
framing the replies based on material facts for the seven basis. I don’t intend
to spend my further energies on the mission
of fault finding process but on my work at TDS Range
Sir, my query at this stage is that “Why Shri D K Jha, Addl. CIT, CR-1 should be involved directly with the
assessing officer rather than the Office of the Hon’ble CIT (Central) in the
matters relating to the sphere of Addl. CIT, CR-2?” Sir, it may seem to
be sheer impoliteness to ask your good self this question, but I’m making the
above request only to mitigate my further victimization and mental suffering as
I had faced enough of wrath of the above Senior Officers.
In the interest of equity and justice, I request your good self that any
further move against me by the Hon’ble CIT (Central) or Shri D K Jha, Addl.
CIT, CR-1 should happen only with the knowledge of your good self. It’s my
humble prayer before your good self that a
common level playing field to be provided to an Officer under representation
vis-à-vis the Officer who has charged me and also with the Officer who has
assisted the Officer in charging me. I deeply importune you that it
would be fairer to conduct any probe relating to my work by any other Senior
Officer other than Shri A K Agarwal and
Shri D K Jha as these Officers are already deeply prejudiced against me.
If your good self seeks any clarification on this matter then it will be
an extreme pleasure for me to appear before you. 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:
1.
The Chief Commissioner of Income-tax, Bangalore
2.
The Commissioner of Income-tax (Central), Bangalore
ANNEXURE-5
F.No. TDS 18-1/Confdl/07-08 Dated:
26.10.2007
Place: Bangalore
To,
The Chief Commissioner of
Income-tax,
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
Manual of Officer Procedure: Volume-1
(Administrative)
|
||
Page No.
|
Point No.
|
Description
|
37
|
23
|
Functions of an Assessing
Officers
|
37
|
23.1
|
The main functions of the Assessing Officers are:-
|
23.1.i
|
Ensuring processing of returns on AST module.
|
|
23.1.ii
|
Alloting PAN’s wherever required
|
|
23.1.iii
|
Making IRLA operational and ensuring that all demands are
entered into this system
|
|
23.1.iv
|
Ensuring all software packages prescribed by the DIT
(Systems) are made operational
|
|
23.1.v
|
Seeing that all taxpayers grievances are attended in time
and redressed in fixed time bound manner.
|
|
23.1.vi
|
Ensuring timely collections of demand and issue of
refunds.
|
|
23.1.vii
|
Selection of cases for scrutiny in time and ensuring their
timely disposal
|
|
23.1.viii
|
Controlling all computer hardware and software of the
range and ensuring its maintenance, replacement and updating. Providing
technical support and guidance for the operation of computer systems
|
|
23.1.ix
|
Taking all necessary steps for widening of tax base.
|
|
23.1.x
|
Internal audit functions
|
|
23.1.xi
|
Ensuring that appeal effects are given and central
scrutiny reports are submitted in time
|
|
23.1.xii
|
Statutory functions
|
|
40
|
27
|
Functions of Office
Superintendent
|
42
|
27.4
|
Work relating to assessment and related functions
|
43
|
27.4.ii.p
|
Proper Maintenance of Records including placement of all
papers, specially returns, forms TDS certificates etc. on records by way of
conducting test checks.
|
56
|
30
|
Functions of a Tax
Assistant
|
58
|
30.3
|
Work relating to assessment and related functions
|
58
|
30.3.iv
|
Proper placement and processing of all papers including
those regarding advance tax, partnership deeds, challans, advice notes etc.
in the case records
|
e.
Without prejudice to the observation the Reviewing
Officer I state that the Reviewing Officer has not made any of the observation relating to main functions but has
mostly remarked in my ACR about the functions relating to the Administrative
Section of CCIT (CCA), Office Superintendent and a Tax Assistant.
f.
With due humility, I express that an ACR is not an instrument of fault finding
but an assessment of overall performance of a person in a year. I’m still
confused with the motive “Why Shri A
K Agarwal CIT (Central) is maligning my unblemished career despite my best of
my efforts in the year 2006-07?”
g.
Since the adverse remarks have not followed any of the
criteria for making an adverse observation with respect to the development of a
subordinate and issuing of memos in the year 2006-07, I have reason to believe
that the columns of ACR are,
therefore, filled up by the Reviewing
officer in a subjective and partial manner”.
h.
Since, the official proceedings necessary for the ACR
is in progress, I submit my explanation point by point for all the issues raised
by the Reviewing Officer in the General Assessment for the year 2006-07.
7.
From the above General Assessment of the Reviewing
Officer the following observations have 3 limbs which have become the basis of
adverse remarks in my ACR for the year 2006-07. The same is listed as under:
a.
PART – I proforma of the ACR is
insufficiently/incorrectly filled and later corrected.
b.
In PART-II, target and achievements in all important
areas have not been filled.
c.
Casual approach in maintenance of records, submission
of scrutiny and other reports.
8.
Sir, I had requested you the basis of adverse remark by
the Reviewing Officer and also a copy of PART-I and PART- II vide letter DO.
F.No. TDS 16-3/Confdl/07-08 Dated 10.09.07. You have supplied me the material
vide letter F.No. Confdl/AR/SSR/2007-08/CC dated 11.09.07. I have perused
through PART-I and PART-II of the ACR supplied by you. I also noticed an infirmity of the Reviewing Officer while
making the adverse observation about the PART-I in my ACR for the year 2006-07.
9.
According to
PART – I proforma of
the ACR, it can be seen that there is clear mention in the ACR itself that it has
to be filled by Administrative Section
of CCIT (CCA). Certification of the same, by Shri S K Iyer, the then CCIT (CCA), reaffirms my view. Therefore, the Reviewing Officer observation that ‘I
was casual while filling the PART - I proforma of the ACR’ can never become as
one of the basis of adverse comments in my ACR for the year 2006-07. The
observation of Reviewing Officer about the work of CCIT-CCA in my ACR about
PART-I Proforma is an infirmity which should have been suggested by the nodal
officer for correction by the Office of CCIT-CCA itself. This infirmity of
Reviewing Officer in my ACR was brought to your knowledge vide letter dated
25.10.2007 and I sought your guidance on this issue.
10.
With due humility I bring out that the observation of the Reviewing
Officer for non-filling/insufficient filling of PART-I of ACR will never become reason for being CASUAL. It is a fact that due to
shortage of manpower at the office of CCIT-CCA each individual sometimes while
writing an ACR may help in filling the PART-I of the ACR. If the Reviewing Officer takes the voluntary assistance of an Officer
as the basis of adverse, then the Reviewing Officer on technical grounds will
be in a difficult position to defend the adverse remarks aimed at Officer
Superior to him. Therefore, the 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
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
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
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
|
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
|
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
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
Sir,
Sub: Protective assessment in the case of Shri
Gautham
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 Race Course Road , Bangalore
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
Submitted Sir,
Sd/-
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
Dated:
17/08/2006
To
Shri V
Srinivasa Raju
No.12, 10th
Main
RMV Extension
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 Delhi
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)
(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
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
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
|
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 Bangalore
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 Central Circle
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,
Sd/-
(S S HARI
RAO)
DCIT,TDS 18(1), Bangalore
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