16 January 2008

My Experiences with the Income Tax Department --6
[A single-page version of this blog can be seen here]

The reader will recall that in January 2003 I had written a somewhat agitated letter to the president of India. The reader is probably under the impression that when such unsolicited epistles land on the reception desks of persons in high office they are routinely put through the shredder. Not so.

On 10 June 2003, Y.D. Sharma, Joint Director of Income Tax (Vigilance)-I, Mumbai, sent me a letter asking me to confirm that I had written a letter to the president and asking me for supporting evidence.

On 19 June 2003 I replied. A couple of excerpts from the letter follow:

"When I met Mr Sebastian on 13 January 2003 I specifically asked him whether my presence was required again since I would be going to Kerala. He stated that it would not be necessary to meet again; in fact he did not even record my appearance before him asking for my signature...

"On 25 February 2003 I again appeared before Mr Sebastian in response to an order communicated to my chartered accountant. In that meeting, I reiterated all that I had stated in my previous meeting ...

"Nearly four months have elapsed since my two-and-a-half-hour inquisition by Mr Sebastian on 25 February during which he unsuccessfully tried to put words into my mouth. I have yet to hear from him."

But this inactivity on Mr Sebastian's part was to soon change. Indeed the vigilance inquiry was to rouse him into a frenzy of activity, much of it highly suspicious.

I shall quote from a letter written by my tax consultant on 22 October 2003:
"Without prejudice to your proceedings it may not be out of place to highlight certain irregularities/discrepancies confronted by us for record since these events are not in keeping with healthy images of the Department. Please note that the narrations given below are bare facts.

"On 25-02-2003 you have recorded a lengthy statement of Philip George on oath but denied our right of procuring a copy of the statement recorded with a curt reply that the copy is provide to the assessee only when the statement is used for finalizing an adverse assessment order. Prima-facie, it sounds funny but we preferred to remain calm abiding by your decision. You have, however, obliged by quick delivery of the said recorded statement in response to our written request.

"After a gap of 5 months you had once again fixed up a hearing on 21-07-2003 vide your notice u/s 142(1) dated 07-07-2003 calling for details which are already available on your records. Books of accounts were also produced for your examination. Our presence was recorded on loose sheet of paper, since the assessment records were in the custody of Vigilance Branch, as reported by you.

"Thereafter on 22-09-2003 you had directed us on phone to appear before you on 24-09-2003 to authenticate the loose paper order sheet of 21-07-2003. No such ceremony of 'Authentication' was performed but our signature were obtained on old order sheet recording dated 25-02-2003 (when Shri Philip George's statement was recorded) for regularization. Very surprisingly, either on the same day or a day after i.e. 24-09-2003 you have dispatched another notice u/s 142(1) dated 15-09-2003 fixing the hearing on 30-09-2003 calling for some fresh requirements. The said notice was received by us on Saturday, the 27th of September at 2.30 pm and the same is being responded in this letter."

More in the next

Category: Income-Tax


Philip George
Debunker of Keynesian, monetarist and Austrian economics

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