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Confused Board of Diffused Taxation

Every professional has his day. If it is the monsoon season for the doctors, harvesting for farmers, it is filing of Income-tax returns for Chartered Accountants (CAs). Coinciding with the festivals of Diwali and Eid in end October, it means increased workflow that keeps cash registers ringing. Usually this is the period of hectic professional activity when taxes are planned, strategies evolved and the laws interpreted to hair spitting minutiae. However, this year was an exception. The latest attempt of the Central Board of Direct Taxes (CBDT) to necessarily mandate corporate assessees to file their IT Returns thorough the electronic mode (E-Filing) seems to have plunged the CA fraternity into deep despair.

Without realising its consternation I visited the office of my good friend Ms Malini. On the eve of Diwali I seized the opportunity of meeting and wishing her with a hidden agenda of trying to understand the problems of E-filing. On entering her office I realised the gravity of the situation. The sullen faces, the morose looks and defeated body language spoke of an inexpressible tragedy of titanic proportions. While the rain outside added to the gloom, the atmosphere inside was absolutely funereal. I was indeed a picture with a box of dry fruits!

Malini did not entirely dislike my presence. Nor did she welcome me. I quickly realised she wanted to pour her heart out. “Busy?” I enquired, trying to initiate a conversation. “Yes, but not purposefully,” she replied. I wondered aloud how that was possible. “Narada, the new system of E-filing IT returns is a huge pain for CAs. Even medium sized companies are looking forward to our assistance. We are unable to cope. While the new electronic form is quite detailed with three parts and 25 schedules, it is not quite flexible enough to cater to all circumstances.” “Agreed Malini, but don’t you think that unless something of this sort is attempted, no progress can ever be ushered in this country,” I quipped little realising such armchair pontification would provoke her. “Don’t be stupid Narada, in a country where power cuts are frequent, infrastructure poor and Internet connections highly unstable, this step of filing IT returns electronically is extremely premature. Only the wearer of the shoes knows where it pinches.” she snapped at me. I could by now well understand her emotions. “Could you be more specific?” I enquired, trying to mollify her by. “First, despite a 15 day 18 hour shift, my office has not been to upload even a single return. The morale and spirit of my staff is low. Second, the tax audit forms were revised only in August, a good five months after the year-end. Obviously with so much of details being called with retrospective effect, assesses were put to extreme hardship in gathering the necessary information. Even for the CAs the learning curve is still to fully set in as yet. And the cruel joke is that we realised later that under the electronic format there is no way of sending the tax-auditors’ report, thereby rendering our entire effort infructuous. If the e-filing did not allow for filing the tax-auditor’s report, why then carry such wholesale changes,” she said in an exasperated tone. Obviously, Malini does not know that the right arm of the Government will never know what the left arm does. “But with some efforts could you not overcome these?” I enquired. “Narada, understand, even as on date the forms are difficult to be downloaded, filled and uploaded. Period.” Malini despite her palpable anger seemed coherent. My conversation with her was interrupted by a phone call from her colleague who informed her that the last date has been extended by a month - to end November. The reason cited by CBDT in its press release was shocking – intervening holidays in October! Ostensibly, the CBDT had recognised the mess, but shied from taking responsibility for it. Puerile as it may look, remember only the Government can commit a Himalayan blunder and yet pose innocently. The proclivity of CBDT in repeatedly amending our tax laws is well known, as is its attempt to confuse and diffuse our understanding of tax laws. But this one must surely take the Oscars. How about renaming CBDT as the Confused Board of Diffused Taxation?

Last modified on Sunday, 07 July 2013 07:36

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