New Delhi: The CBDT on Monday issued chargesheets against three principal commissioner-rank IRS officers for “misguiding” young taxmen and “unauthorisedly” making public a report that called for a hike in taxes to fund the economic fallout of the COVID-19 pandemic.
The three IRS officers – Sanjay Bahadur (principal director investigation, northeast region), Prakash Dubey (director DOPT, IRS Association’s joint secretary) and Prashant Bhushan (principal commissioner of income tax, Delhi, and IRS Association’s general secretary) – have been given 15 days to submit a written response in their defence to the charge sheets and also on whether they want to be heard in person.
The tax report had advocated for a raise in tax rates, imposition of wealth tax, inheritance tax and imposition of COVID-19 Surcharge, but the government had quickly distanced itself from it, calling it “ill-conceived”.
According to sources, the action has been taken as the report created panic and tax policy uncertainty in the already stressed economic conditions in the country.
Government sources said preliminary inquiry by the Central Board of Direct Taxes (CBDT) revealed the “role and complicity” of these senior officers in the preparation of the report named FORCE (Fiscal Options & Response to the COVID-19 Epidemic), which advocated tax hike, imposition of wealth tax, inheritance tax, imposition of COVID-19 surcharge.
The inquiry showed that while Dubey and Bahadur got junior officers to prepare a report and unauthorisedly gave it to the IRS Association which made it public, Bhushan unauthorisedly put the report in public domain, the sources said.
The sources further said these senior officers, despite having decades of experience in service, failed to exercise due care and went on to “misguide” the 50 young officers.
“The government would have definitely given due consideration to suggestions made by the young officers. However, in this case, the reports, instead of being sent to the government through official channel, these senior officers of rank of principal commissioner misguided them and went public with report which created panic and tax policy uncertainty in the already stressed economic conditions in the country,” one of the sources said.
The controversial report, prepared by about 50 young IRS officers, among others things suggested raising the highest tax slab rate to 40 per cent for income above a minimum threshold of Rs 1 crore or re-introduction of wealth tax for those with a net wealth of Rs 5 crore or more to help pay for the coronavirus economic fallout.
The income tax department on Sunday said the report did not reflect the official views of the CBDT and the finance ministry. It said an inquiry is being launched into why the report was shared with the public.
“There is some report circulating on social media regarding suggestions by a few IRS officers on tackling COVID-19 situation. It is unequivocally stated that CBDT never asked the IRS Association or these officers to prepare such a report,” the department said. “No permission was sought by the officers before going public with their personal views & suggestions, which is a violation of extant Conduct Rules. Necessary inquiry is being initiated in this matter.”
“It is reiterated that the impugned report does not reflect the official views of CBDT/Ministry of Finance in any manner,” it said.
Bhushan had written a one-page foreword when he sent FORCE report to CBDT chairman and members. “The CBDT had sought feedback from our field formations across India on the ideas for revival across various sectors of the economy,” he wrote on April 23.
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