The taxpayers' charter announced in the Budget will have a statutory status and it will "empower" citizens by ensuring time-bound services by the Income-Tax department, the CBDT chief has said.
CBDT chairman Pramod Chandra Mody said the charter will be notified very soon and once operationalised, India will be only the "third or fourth" country to have such a tax administration.
The Central Board of Direct Taxes frames policy for the I-T department.
"The underlining theme with which we have been working till now is that we trust the taxpayers and from purely an enforcement agency, we are shifting our focus to being a service-oriented department," Mody said in an interview to the Press Trust of India.
"We are trying to promote voluntary compliance and in the process we are also trying to put some discipline on us that we are willing to provide you these services within a given time-frame and with certain benchmarks and it would be the taxpayers’ right to expect those services," he said.
Earlier, Mody said, these services were part of an administrative mechanism by way of an existing citizens charter. "Now we are giving it a statutory recognition, once it is in the statute (in the law), it is enforceable."
"Earlier it was expected to be enforced but now it is binding. And to that extent it is the empowerment of the taxpayer," he said.
Mody explained that the duties of a taxpayer are "already provided" in the Income-Tax Act regarding payment of tax, advance tax, and doing tax deducted at source (TDS).
"It (taxpayer charter) will be a great empowerment and great service to the taxpayer and incidentally this is not there in many tax jurisdictions."
"We would be the third or fourth country to have it in statute. I think the US, Canada and Australia have it. So it is a big, big responsibility we are taking," he said.
Finance Minister Nirmala Sitharaman proposed the charter in her Budget speech on Saturday and said the government would like to re-assure taxpayers that it remains committed to taking measures so that they are free from harassment of any kind. Tax harassment cannot be tolerated, she said.
The minister said any tax system requires trust between taxpayers and the administration, which will be possible only when the latter's rights are clearly enumerated.
Talking about the 'Vivad Se Vishwas’ scheme, Mody said the aim of the latest measure is to reduce litigation and see finalisation of 4.83 lakh stuck cases in appellate forums under the direct taxes category.
Asked how much revenue is locked in these cases, the CBDT chairman said it's a "few lakh crores."
"These cases are at different appellate levels like commissioner of income tax (appeals), income tax appellate tribunal, high courts and the Supreme Court. These cases stuck cover a multitude of assessees like individuals, partnership firms, cooperative societies, small and big corporates and all sorts of people," he said.
"The basic idea is that we want to reduce litigation and help getting the assessee a clarity in his case in quick time," he said.
Under the scheme, a taxpayer would be required to pay only the amount of the disputed tax and will get complete waiver of interest and penalty provided they pay by March 31, 2020.
"Those who avail this scheme after March 31, 2020, will have to pay some additional amount. The scheme will remain open till June 30, 2020," Sitharaman said in her Budget Speech.
A similar scheme, 'Sabka Vishwas', for cases stuck in litigation under the indirect taxes category, was brought in by the government in the last Budget.
Buoyed by the success of the faceless e-assessment scheme of income tax cases, the finance minister proposed in the Budget bringing in a new faceless appeal scheme.
The CBDT chief said as part of the e-assessment scheme, launched on October 8 last year, the I-T department has completed assessment in 100 cases and notices have been issued in 48,000 cases out of the total 58,000 picked as part of the ambitious scheme.
"All the physical infrastructure is already in place in terms of hardware. The success of the e-assessment scheme has given us the confidence that it (faceless appeals) can be handled," he said.
Mody said there are no glitches in terms of infrastructure, manpower and communication between the taxpayer and the department.
"Based on that convenience, we took it to the next level. It (e-appeals) would be randomised and team-based and with the basic idea to increase transparency in trying to get some sort of uniformity and consistency or to say it would not lead to difference in approach on a particular issue."
"This scheme too shall be notified very soon," he said.