Budget 2017-18 proposals: India Inc worried over misuse of ‘increased powers’ to taxmen

Arun Jaitley proposed to provide taxmen with the powers to provisionally attach the property of an assessee for six months either at the time of search and seizure or till sixty days from that date.

budget, budget 2017, budget proposals, india inc, taxation, taxmen powers, naushad forbes, rc bhargava, adi godrej, maruti suzuki, arun jaitley, indian express news, india news, budget updates, business news

An official showing the copy of Union Budget 2017-18 at Parliament after its presentation in the Lok Sabha in New Delhi. PTI Photo

Concerned over the likelihood of misuse of increased powers to the taxmen, proposed in the Budget 2017-18, India Inc has raised its concern with the finance minister and revenue secretary. Naushad Forbes, president CII and co-chairman Forbes Marshall said that while the industry is worried that such powers may lead to corruption and harassment of assessees, the finance ministry has provided unqualified assurance and said that there will be a process and approval procedure.

“If you transfer greater discretion at the lower level, it will lead to corruption and harassment. We have raised our concern with the finance minister and the revenue secretary. We have said that it should not be left to rely on the goodness of the tax official but due process should be laid down in writing,” said Forbes. He further added: “They (finance ministry officials) have given unqualified assurance that it will not be misused and there will be due process and approval procedure.”

While Adi Godrej declined to comment and said that he has not read the provisions carefully and therefore will not be able to comment on the same, RC Bhargava, chairman, Maruti Suzuki India Limited said: “If the provision aims to prohibit an assessee from alienating his property for six months by which time the tax department can get a formal attachment order from the court, there is no harm.”

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In his Budget 2017-18, the finance minister, Arun Jaitley proposed to provide taxmen with the powers to provisionally attach the property of an assessee for six months either at the time of search and seizure or till sixty days from that date.

He also proposed to provide taxmen with an additional right to not disclose the reason for carrying out search and seizure to any person or authority or even the Appellate Tribunal. The government has cited the requirement of “confidentiality and sensitivity” for proceedings of search and seizure. Tax experts are terming this decision as a step backwards in terms of transparency.

Other than these, the government also proposed to empower an income tax authority to conduct search and seizure beyond the business establishment and said that it can also be conducted at a charitable institution.

It also decided to empower officers of the rank of joint director, the deputy director or assistant director to call for information for the purpose of inquiry or proceeding without seeking prior approval of higher authorities.

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Earlier, such powers were only with officials of the rank of the principal director or director or the principal commissioner or commissioner.

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