In a bid to address the concerns of taxpayers about high-pitched assessments under the faceless scheme, the revenue department has asked the Central Board of Direct Taxes (CBDT) to commence strict action against officials for issuing notices on taxpayers without cross-referencing facts or following procedures, reported the Economic Times.
The department has also asked CBDT to ensure that all local committees that have been formed to look into complaints by taxpayers provide a quarterly report on actions taken, people aware of the matter said, reported Economic Times.
The move comes following observations by various courts that addition of income and imposition of penalty for underreporting of income were being done without following procedure.
“In many cases, notices were slapped, and exemptions were deleted even where tax law clearly allowed it. All commissionerates have been communicated about it,” an official familiar with the development said.
The official said the department detected major anomalies in computation of tax on the part of officials in multiple cases, leading to avoidable litigation.
In a recent order in Harish Chandra Bhati vs PCIT case in Allahabad High Court, revenue secretary Tarun Bajaj was made to give a personal affidavit about the measures to be undertaken by the department to help taxpayers.
There is already a provision of a local committee empowered to take care of the grievances of taxpayers to speedily deal with complaints over high-pitched scrutiny assessment.
However, the court observed that local committees were yet to be formed in many jurisdictions, and they were not functional in many places where they had been formed.
The High Court directed that the government ensure formation of local committees in all the regions across the country and that they are made functional.