Income Tax India

The period from 1975–85 could be described as a period which witnessed grim battle between the tax administration and tax evaders. During this period, long term measures were adopted for the purpose of handling menace of black money. While the front ranks were busy taking measures to unearth black money, the vast machinery of the department was undergoing drastic changes. During this period, a number of new Directorates and Commissioners charges were created. These were to become, in coming years, specified agencies to intensify investigation & surveys, to expedite recovery of old taxes and come up as Centres for creating better climate inside the Department and outside, to facilitate smooth working. The revenue collected from Central Direct Taxes which was approximately Rs. 2,000 crores in 1975-76, came up to Rs.3,000 crores (about) in 1980-81 and over Rs.4,000 crores in 1983-84 (about).

In 1975, as a result of certain political changes, unusual energy was generated in the country. The Income-tax Department reacting to it rose to unknown heights under the very capable stewardship of its Chairman, Shri S.R. Mehta. The activity in all fields of functioning became manifold, the most prominent were the two areas, (i) Search & Seizure, (ii) contact with public through mass media of Radio and T.V. During the years 1974-75, 1975-76 and 1976-77, the No. of search and seizure operations were 2029, 2635 & 3571 whereas in 1973-74 – the year proceeding this period, the number of search operations was 538 and in 1977-78, the immediately succeeding year, it was 617 only. As a result of this activity, fear had been struck in the hearts of tax evaders that the arms of the Department were long and its officers neither lacked the will nor the expertise to book the dishonest tax payers. This atmosphere was considered ripe for floating another voluntary Disclosure Scheme. On 8^th October, 1975, President of the Republic of India promulgated, by an ordinance, a scheme known as Voluntary Disclosure of Income and Wealth. It was the fourth Voluntary Disclosure Scheme and the fifth attempt of the I.T. Department to give the erring tax-payers opportunity to disclose their hidden wealth. The first attempt was through Demonetization of High Denomination notes in 1946, thereafter three Voluntary Disclosure Schemes were introduced, first in 1951 and the second & third in 1965.

The system of introducing Voluntary Disclosure Scheme was reviewed in detail by the Wanchoo Committee which submitted its final report in December, 1971. Bases on results of replies to a questionnaire issued for the purpose, the Wanchoo Committee observed that a Voluntary Disclosure Scheme placed a premium on fraud and was unfair to the honest tax-payer. The Committee strongly opposed the idea of introduction of any general scheme of disclosure. They took into account the fact that the total income disclosed in all the three earlier Voluntary Disclosure Schemes put together was Rs.267 crores only which was a small fraction of even the most modest estimate of concealed income of 15 years (1951 to 1965). The total tax yielded by the three schemes was Rs.61.23 crores. The schemes therefore were not only found unfair to the honest tax-payer, but also, they failed to achieve the objective of unearthing undisclosed money. Whatever little was disclosed, observed the Committee, was mostly already invested surreptitiously and so, the disclosure did not result in any fresh investments either.

Yet, in 1975 a fourth Voluntary Disclosure Scheme was introduced and the results were spectacular. An amount of Rs.1500 crores was disclosed by way of undisclosed income and wealth. In his Budget speech for 1976-77, the Finance Minister commenting upon the tremendous improvement in revenue collected, acknowledged that one of the factors was ‘the relentless drive against tax evaders and other economic offenders’. He also took cognizance of the ‘remarkable response to the Voluntary Disclosure Scheme’. This Scheme, while it brought large revenues to the exchequer, gave an unprecedented glory to the personnel of the Income-tax Department. Every one working in the Department – officer or official, got a bonus equal to one month’s basic pay. The then Chairman, C.B.D.T. Sri S.R. Mehta was awarded Padama Bhushan.

Besides, the emotional and financial gains by the officers of the Department, there was another gain which, over the years, has proved to be of great help. It was recognized that the personnel of a Department which could do so well, deserved better working & living conditions. A sum of Rs.12 crores was immediately sanctioned for the purpose of constructing new houses. This was indeed the hay day for the Department because its potential was recognized and the need to strengthen its cadres was under scored. The Department had proved itself.

As a fall out of the above, during this period, the man-power of the intelligence wing was enhance substantially and it was also dispersed. At present, there is one or more Dy. Director dealing with intelligence work in all major towns. All Commissioners have atleast one ADI to deal with intelligence matters. In 1981, post of a Director was created in the Directorate of Investigation to deal with high level intelligence work. The strength of the intelligence wing as on 1-4-84 is as follows.

1975 was a year when several steps were taken by the Government to handle the menace of black money. On 5^th May, 1975, an Ordinance was promulgated known as Smugglers & Foreign Exchange Manipulators (Forfeiture of Property). It became an Act in 1976.

Under section 17 of the Act, officers of six specified Departments were empowered and required to assist the Competent Authority and the Appellate Tribunal for forfeited property. One of these was Income-tax Department. Naturally, this enlarged the area of functioning of the Department. In 1976, 4 posts of OSD in the rank of Joint Secretary were created in Bombay, Delhi, Madras & Calcutta, alongwith 4 posts of Deputy Directors and 8 posts of Asstt. Directors. In 1978, Ahmedabad was made a full fledged Competent Authority Charge and consequently, similar number of posts as for Bombay or Delhi Charge etc. were created for Ahmedabad as well. Given below is the organisational set up under Smugglers & Foreign Exchange Manipulators (Forfeiture of Property) Act :

With effect from 1.10.1975, [Taxation Laws Amendment Act, 1975 (41 of 75)] a new section 133A was inserted. It gave extensive powers of survey to I.A.C., A.D.I., I.T.O. and to a specified extent, to Inspectors when authorized by I.T.O. These authorities henceforth could enter any place within the limits of the area assigned to him/her or any place occupied by any person in respect of whom he exercised jurisdiction, where a business or profession is carried on and could inspect the books of account and other documents, check or verify the cash, stock and other valuable articles or things found therein, place marks of identification, make inventories as also record statements of any person which may be useful for or relevant to any proceedings under this Act. Clause (5) of section 133A gave powers to these authorities to record statements of the assessee or any other person regarding expenditure incurred by an assessee in connection with any function, ceremony or event after it has taken place.

During 1977, the C.B.D.T. formed a Departmental Committee comprising of senior Cs.I.T. The Tasks assigned to the Committee were directed towards issuing guidelines for making the period ending 1979-80 a period of intensive survey in which all the areas in a Commissioner’s Charge were covered. The Committee reviewed the performance in this direction and drafted guidelines for achieving the desired results. The Committee suggested that since survey had been visualized as a continuous process, it was desirable to assign "some staff exclusively to survey work". It was also suggested that I.T., W.T., G.T. & E.D. Laws should be amended to give the Inspectors, sufficient statutory powers of survey. In 1978, C.I.T. (appeals) were also given certain powers of survey. On 3.10.1979, comprehensive instructions for having effective survey & follow up, were issued.

A separate Directorate known as the Directorate of Inspection (Survey) was created in October, 1981. 5 officers i.e. 1 Director, 2 Assistant Commissioners and 12 Assistant Directors were posted. Out of these, the post of Director alone has been properly sanctioned. Other officers have been posted by the transfer of posts from elsewhere.

Wanchoo Committee in its report had made certain very important recommendations which were to have a far-reaching effect on the growth and functioning of the Income-tax Department. One suggestion resulted in the creation of ‘Settlement Commission’.

While condemning the Voluntary Disclosure Schemes, the Committee had recommended that the door for compromising with an errant taxpayer should not, for ever, be closed. "A rigid attitude would not only inhibit a one time tax evader or an unintending defaulter, from making a clean breast of his affairs but would also unnecessarily strain investigational resources of the Department in cases of doubtful benefit to revenue, while needlessly proliferating litigation and holding up collections". They recommended that settlements may be entrusted to a separate body within the department to be called the Direct Taxes Settlement Tribunal. This body should be a permanent body with three members. The members should be given the same status as the members of the Central Board of Direct Taxes. They should be persons of known integrity and high sense of justice and fairness.

The Taxation Law Amendment Act, 1975 inserted a new Chapter XIX A in the Income-tax Act and Chapter V-A in the Wealth-tax Act whereby the Government constituted a Settlement Commission w.e.f. 1.4.76 as a statutory body for the settlement of the cases. This institution has helped the Department to get over long and continued litigation in complicated cases. During the period 1976 to 1983, the Settlement Commission has settled 1213 cases of which only one case was admitted by the Supreme Court. The Direct Tax Laws Committee in its final report submitted in September, 1978 further recommended that all restrictions on the powers of the Settlement Commission to entertain cases should be removed. As a result of this recommendation w.e.f. 1.4.79, the powers of the Settlement Commission were further widened. Earlier, if the Commissioner objected to the application of an assessee from being proceeded with, the Commission could not proceed with it. The proviso to section 245D (1A) inserted w.e.f. 1.4.79 gave the Commission power to proceed with it, inspite of the objection but only after giving the Commissioner, opportunity of being heard.

Besides the gain to revenue, the Department’s manpower increased significantly, as a result of the creation of Settlement Commission. Several new posts were created. In 1976, 14 posts (2 D.Is., 1 Secy., 10DDs. & 1 A.O.) became available. There has been no increase in the strength of personnel, since then.

Although, the Government was doing every thing within its power, to contain the proliferation of black money through strengthening its own machinery etc. the problem continued to plague the economy of the country. Within six years of Voluntary Disclosure Scheme of 1975, the Government came out with the special bearer Bonds Scheme of 1981, vide ordinance No.1 of 1981, replaced by special Bearer Bonds (Immunities & Exemptions) Act of 1981. This Scheme provided for the issue of bearer bonds in fixed denomination. The investment carries a very low rate of interest. On maturity, the proceeds of the bearer bonds can be introduced in the regular books of accounts. No questions are to be asked at the time of introduction of the money in the books of accounts. This was an unusual device resorted to by the Government to utilise the concealed wealth of the people in a productive manner.

In 1977, assessment work was given to a large number of IACs. It had come to be recognised that good work done by specialised agencies either in the course of survey operation or in the course of search and seizure operation could be reduced to nought by a bad assessment. It had also been recommended by the Wanchoo Committee, that Senior Officers should be engaged in assessment work so that maximum benefit could be derived from their experience. As assessment work in bigger cases was entrusted to I.A.Cs. (Assessment), over the years, the number of IACs (Assessment) has increased considerably. To day, the number of I.A.Cs deployed on assessment work is 108.

During this period, the department not only took steps to sharpen its teeth in dealing with tax offenders but it also took steps to cut out the time taken for assessment in smaller cases and also to sort out disputed points at a higher level so that prolonged litigation could be avoided. The first objective was achieved through the increased use of the Summary Assessment Scheme already discussed in Chapter V. The second objective had been fairly achieved by setting up Settlement Commission. This (S.A.S.) scheme was first introduced in the year 1968. The purpose was to cover speedily a large number of small assessments without going into the detailed working and provide time for the officers to do intensive investigation into large income cases. With various modifications & under different nomenclatures, the scheme is going on, till date.

The decade under review saw growing reliance upon voluntary compliance of the Tax Laws by tax-payers. It is a well recognised fact that enforcement of a law becomes easy when there is a voluntary compliance with the laws by the public. In the earlier stages of Income-tax Law and Administration, there was very little that the taxpayer was expected to do voluntarily. Over the years, the obligations which the taxpayer has to fulfil voluntarily have grown considerably and for the purpose, several amendments to the law have been made, casting various statutory obligations on the assessee.

The start in this direction was made, when years ago, the responsibility of filing the ‘Return’ of Income was cast on the assessee. This shift in policy appears paradoxical in view of the fact that Direct Tax Laws are not easy to comprehend and the public is not keen to pay taxes. Yet of the various considerations which might have been the cause of legislation leaning on this side, the main cause appears to be the growing volume of work. The figures will give an idea of the growth of work-load over a period beginning from 1974-75 to 1983-84.

Financial Year	Asstt. Work load of Income-tax	Asstt. Work load of Wealth-tax	Asstt. Work load of Gift-tax
1974-75	55,18,327	4,95,000	92,000
1977-78	55,81,355	6,33,000	95,000
1980-81	65,91,180	8,50,000	99,000
1983-84	68,92,824	9,56,000	1,26,000

Besides, statistics had shown that about 80% of the Revenue was being collected under those heads’ which placed for compliance, responsibility on the tax-payer such as advance-tax payment & payment of tax deducted at source. In these areas, the responsibility for compliance has been gradually increased and passed on to the tax-payers. Section 209A is a typical example & so is the ever increasing list of the sources of income from which the persons paying the money must deduct tax.

On its own part, during this period, the department undertook publicity for the benefit of the tax-payer in a big way. Liberal use has been made of Radio, Television, Cinema Slides and newspapers to inform the assessees of their statutory obligation. This has required the enlarging & strengthening of the Public Relations machinery of the Department.

More than thirty year back, the Taxation Enquiry Commission (1953-54) had examined the problem of public relations and recommended several measures for improving public relations and for eliminating avoidable inconvenience to the public. The Direct Tax Administration Enquiry Committee also studied the problem in depth and made a large number of recommendations, many of which have since been accepted and implemented. The Administrative Reforms Commission also suggested that tax authorities should provide facilities to tax-payers with a view to projecting before them the image of a helpful guide rather than that of a rigid official indifferent to the difficulties of the asseessees. The Wanchoo Committee also envisaged an active role for the public relations wing of the Department and recommended the setting up of a Directorate of Publications and Public Relations to be incharge of all the publications required for the guidance of the officers and for the education of tax payers. At their annual conferences, Commissioners of Income-tax have been devoting considerable time and giving great importance to matters having public relations angle.

Keeping in view the recommendations of the various Commissions, Committees and conferences, the steps so far taken cover the following specific functional areas :-

Separate rooms for visitors are now generally provided. Enquiry counters are also provided. These counters provide, information and guidance to the public and supply important tax forms. In recent years, facilities for payment of taxes have been considerably enlarged and tax payments can now be made in a large number of branches of several public sector banks. Advice Notes in respect of refunds upto Rs.999/- have also been dispensed with.

Following the recommendations of the Income-tax Investigation Commission, complaint sections had been opened in 1949 in the Commissioners’ offices in Bombay & Calcutta, and later in Madras and Delhi, for the purpose of expeditiously dealing with all complaints regarding discourtesy, harassment, etc. These complaint sections were later expanded into regular offices under the Public Relations Officers. These officers were firstly appointed from among retired Commissioners or Assistant Commissioners, but on the recommendation of the Taxation Enquiry Commission to appoint "younger and more energetic type of serving officers", experienced I.T.Os. were appointed as P.R.Os. who have since been assigned the important job of assisting taxpayers in diverse ways.

The Observance of such weeks for the past many years has been gainfully employed by the Department after giving wide publicity to such programme.

In early seventies, the Department experimented with an on-the-spot assessment scheme under which the officers would camp at convenient locations in the business and residential localities and enable the tax paying public in that locality to have their tax matters promptly settled on the spot. This scheme was however, given up probably because of certain administrative problems which it appears to have created.

In pursuance of the recommendations of the Wanchoo Committee, an exclusive wing was created in the Directorate of Inspection (RS & P) later designated as D.I. (RS & PR), for bringing out concise publications in the Tax payers information series in diglot. Some of the publications like ‘guidance notes on filing returns’ are meant for free distribution while others are priced. Quite a number of such useful publications have since been brought out.

During 1982-83, 12000 copies of a booklet "Income-tax in India, 1982" deliniating the basic features of Income-tax in a language comprehensible to common taxpayer were distributed all over India and also to officers of Indian Embassies and High Commissions, all over the world. Another booklet titled "Income-tax for non-residents and Indian Nationals Abroad" was also distributed to taxpayers within the country as well as to Indian Missions abroad.

A special cell was created in 1979 under the direct control and supervision of the Chairman, C.B.D.T. for dealing exclusively with the problems of the tax payers relating to delays in grant of refund, rectifications, etc. The petitions received are acknowledged by the Chairman and forwarded to the concerned Commissioners for redressal and report, within 7 days of the receipt. Encouraged with the response of taxpayers and in order to offer better public service, such cells have also been set up towards the end of 1980 in each C.I.T.’s charge.

As a part of the programme of rendering efficient and prompt service to the taxpayers who wish to fulfil their legal obligations, the Directorate of Inspection (RS & PR) has, since mid-seventies, been utilising multi-dimensional publicity media to educate and remind the taxpayers of their obligations. Advertisements have been regularly issued to the Press through DAVP for being published in Hindi, English and regional languages newspapers throughout the country covering important areas. Important topics are also covered under Radio and T.V. spots. Outdoor publicity is also conducted through screening of cinema slides on topics like advance-tax installments, filing of returns, etc.

The emphasis on printed publicity has in recent years been increasing. During 1981-82, 5 lakh copies of leaflet on the subject of ‘self assessment’ were printed and issued by the Directorate of Inspection (RS & PR). Ten lakh copies of folder "How to fill in Challan" were also printed and issued. During 1983-84, a pamphlet titled "Income-tax Dates and Details" was prepared and distributed.

The Public Relations Wing of Department is required to keep in close touch with the various tax practitioners’ Associations, etc. by arranging frequent meetings. PROs are also required to arrange periodical meetings of these bodies with Commissioners for discussing matters of common interest and finding solution for common problems. The practitioners’ associations are also provided proper accommodation in Income-tax buildings.

These Committees were constituted in pursuance of the recommendations of the Direct Taxes Administration Enquiry Committee (1958-59) and have been helping to sort out the common problems of the taxpayers and the Department.

The Economic Administrative Reforms Commission known as Jha Committee, has made several recommendations in this behalf, on strengthening the role of Public Relations in the department. These recommendations are yet to be implemented fully.

In any progressive economy, the methods of training the personnel of any department, both at the orientation level and as in-service training, have to be kept, for ever, under constant review. For Income-tax Department, where fast changing laws have to be administered, this aspect of administration can not be over emphasised. Yet upto 1976, although reasonably good arrangements had been made for training gazetted staff, no arrangements worth the name, existed for training the non-gazetted members of the staff, who have to carry the burden of entire file work, except for framing the assessments. In 1976 fourteen Ministerial Staff Training Units, were set up at various stations for the training of the ministerial staff. This was a new feature and it was welcomed by all.

During this period, the Department also began to sponsor officers for training at premier institutions like the Indian Institute of Public Administration, New Delhi, Administrative Staff College, Hyderabad etc. It also started sending officials abroad for training. It must however be said that the training efforts of the Department continue to be lopsided in as much as there is no effort to utilise effectively the skills acquired by the officers who are deputed for training to institutions outside the department and abroad. There is also no system for evaluating the usefulness of the training.

As in the past, this decade also had its share of Enquiry Commissions. The first such body was constituted in June, 1977 under the Chairmanship of Shri N.A. Palkhiwala – a noted jurist. The terms of reference of this Committee were quite wide and the Committee was expected to go into the working of the Department in depth. Its members included eminent persons from various fields. Shortly, after the constitution of this Committee, its Chairman had to leave and Shri C.C.Chokshi took over the Chairmanship. The Report of the Committee was received in 1978. The recommendations of this Committee were however, put in cold storage.

The Committee had made some very valuable suggestions towards simplifying the Act. Towards administration, their recommendations were (a) that the existing cadre of Assistant Commissioners should be redesignated as Deputy Commissioners (b) that Income tax officers, Class I, in the senior scale, should be designated as Assistant Commissioners (c) that Income tax Officer’s Charges should be classified into senior scale charges and other charges so that the senior scale charges should be held by the newly designated Assistant Commissioners who may be empowered to perform all the functions and exercise all the powers of the assessing authority. (d) According to this Committee, appeals against assessment orders should lie to the Commissioner (Appeals). The Deputy Commissioners should be deployed exclusively on supervising, guiding and directing the work of assessing officers .(e) A new cadre known as Regional Commissioners should be created. The Regional Commissioners should have the status of additional secretary to the Government of India . They should be made responsible for administratively controlling, co-ordination and supervising the work of the Commissioners in their respective regions and should be accountable to the Board for the overall performance of their regions. (f) They recommended that Chairman of the Central Board of Direct Taxes should be given the status of a Secretary to the Government of India. The Committee also found that the manpower assistance given to the officers at various levels in the department was not adequate and recommended that it should be adequately augmented and that the officers should be provided with adequate office space, storage space equipments and aids. A very important recommendation of the Committee was that the amendment to the Income tax rules, should be made only once a year preferably in July and it should be notified by September so as to operate from the first of April of the following year. Where, however, an interim Amendment became absolutely unavoidable, it should be fully justified with adequate reasons as to why the change could not be made part of the Annual Amendment to the Rules.

In March, 1981, the Government constituted that Economic Administrative Reforms Commission. The terms of reference of this Commission were very wide. A review of the Income tax Law, Procedure and Organisation of the department was one of the many points referred to this Commission. The report of this Commission has been published in Dec.83. Though, this Commission suggested certain radical changes in the law, yet the same do not appear to have been given effect to in the amending bill, which was introduced in 1984 and passed by the parliament. Some important recommendations made by the Commission are as follows:-

The Committee also stressed the need to strengthen the training facilities available and to build up a sense of confidence and security among the officers and the staff. It should be ensured, it observed, that officers are not made to suffer for honest error, and the exercise discretion and judgment in the discharge of quasi-judicial function and are not subjected to ex-post facto questioning except in the course of appeal procedures.

It was Prof. Nicholas Kaldor of University of Cambridge who first highlighted the view point that evils of black money and tax evasion cannot be controlled unless the officers of the Revenue Department are well paid and are provided adequate promotional prospects. Subsequently seminars and committees also uniformly expressed the view that unless the promotional prospects of the officers of the service are improved considerably, any expectation in the improvement of administrative efficiency and effectiveness of the Department which plays a key role in the resource mobilisation effort for economic development of the country, is unlikely to be fulfilled.

This consciousness gave rise to the need for cadre review at Group A level and work management studies for officers belonging to various groups.

This first cadre review of the I.R.S. (I.T.) was completed in November 1976 followed by a second review in July 1980. While preparing the cadre reviews, the organisational structure of the Department was looked at from a systems approach and the opportunity was used not merely to review the cadre structure to improve promotions of the officers of the cadre but also to improve the operational efficiency and effectiveness of the Department by making structural changes in the organisational set up.

As a result of the cadre reviews, the legislative changes, the need for strengthening intelligence machinery, the stress on intensive investigation, demand for improving machinery for collection, etc., quite a few structural changes were made and new posts sanctioned during the decade 1974-84. The staff Inspection Unit made its recommendations. In 1975-76, 1,682 additional posts (238 gazetted and 1,444 non-gazetted) were sanctioned in the Income-tax Department covering the first phase extending upto 1976-77. Additional posts consisting of one Sampling Officer and two Senior Statistical Investigators were also sanctioned during the year for the Directorate of Inspection (RS & P) for bringing out up-to-date statistics relating to various direct taxes through the introduction of sampling procedure. Besides, 3 posts of Competent Authorities (of the rank of Joint Secretary) with head quarters at Delhi, Bombay and Madras, alongwith complementary staff consisting of 15 gazetted posts and 42 non-gazetted posts were created during the year under the provisions of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.

In October, 1976, 20 additional posts of I.A.Cs. alongwith ministerial and other posts were sanctioned in order to cope with additional work arising out of implementation of newly inserted sections 144A & 144B.

In 1977-78, as a result of review of requirement for assessment, collection and administration, additional posts of 11 Assistant Commissioners, 150 ITOs and complementary posts of staff were sanctioned. During 1978-79, by way of strengthening the Income-tax Department, 8 additional posts of Commissioner of Income-tax, 69 posts of Commissioners (Appeals) (a new cadre created by upgrading an equal number of posts of A.A.Cs.), 87 additional posts of Assistant Commissioners (by up-gradation of an equal number of I.T.Os. Group A), 150 posts of Leave Reserve Group ‘B’ I.T.Os. were sanctioned. Further, with a view to improving promotional prospects of ministerial staff and as a measure of implementation of one of the recommendations of the Wanchoo Committee, a new cadre of Tax Assistants was created and 4,148 posts were sanctioned by abolishing an equal number of posts of U.D.Cs.

The requirement of officers and staff was further reviewed during 79-80 and 37 additional posts of IACs (Assessment), by upgrading equal number of posts of Income-tax officers (group A), 99 posts of Selection Grade (Rs.2000-2250) of Asstt. Commissioners of Income-tax in lieu of equal number of posts of ordinary grade Asstt. Commissioners (Rs.1500-2000), 60 posts of Income-tax officers group A Training Reserve, 27 posts of Hindi officers and 500 posts of Inspectors for survey were sanctioned. During the year 1980-81, 36 additional posts of AACs, together with appropriate complementary staff were created. During the year 1981-82, 61 additional posts of Commissioners of Income-tax, 24 of Appellate Asstt. Commissioners and 200 of Income-tax officers group A were created. Again, by way of further strengthening the Income-tax Department during the year 1982-83, 1747 additional posts in Ministerial Cadre i.e. Tax Assistants, U.D.Cs. and L.D.Cs ; were created for assessment work. In addition, 286 posts were also created as complementary staff for new posts of Commissioners and Assistant Commissioners sanctioned during the preceding years. During the same year, five posts of Tax Recovery Commissioners were also sanctioned.

A steady effort is thus being made to improve the promotional prospects of the officers and staff at all levels. For this purpose, the requirements of officers and staff are kept under constant review and work management studies are conducted by the Directorate of organisation and Management Services (Income-tax).

The need for constructing departmental buildings, office and residential, was accepted in principle in early fifties. Its importance was, however, highlighted by the Direct Taxes Administration Enquiry Committee (1958-59). Visits by the Committee to tax offices at different places revealed that the accommodation was unsatisfactory and the offices were over crowded. The Committee felt that provision of proper and adequate accommodation would not only lead to better conditions of work, but also remove inconvenience caused to the taxpayers. The Committee also viewed with concern the difficulties experienced by the officers and staff of the Income-tax Department in the matter of housing. It was appreciated that in view of the general shortage of residential accommodation, officials had not only to pay very high rents but were also at times unavoidably driven to undergo obligations of influential assessees in getting suitable accommodation. It was, therefore, strongly recommended that sufficient funds should be allotted for the construction of residential houses for the officers and staff of the Income-tax Department. Similar views were voiced by Direct Taxes Enquiry Committee, which felt that officers in revenue department should not be placed in a situation where they have to depend on taxpayers for their personal needs.

Planned construction of office and residential buildings actually started only in 1958 on the basis of phased programme. The first Rs.3 crores programme of 1958 made a good headway and a second Rs.5 crores programme was drawn up in 1962. But due to emergency and consequent need for economy, this remained unexecuted. In March, 1968 a limited programme for purchase of land and construction of buildings at important places was approved and pursued. Another programme was drawn up and approved by the Finance Minister in Jan., 1972 but it could not be proceeded further due to instructions issued by the Government in 1973 for effecting maximum economy in expenditure. For about four years thereafter, the construction activity was almost at stand-still.

The programme for providing residential accommodation received an impetus with the announcement by the Finance Minister in Jan., 1976 that a sum of Rs.12 crores would be earmarked for residential accommodation to be provided to the officers and staff of Income-tax, Customs and Central Excise Departments over a period of three years, Rs.2 crores during 1975-76, Rs.5 crores during 1976-77 and Rs.5 crores during 1977-78. During 1975-76, 510 ready built flats constructed by the Housing Boards, etc. were purchased at an estimated cost of about Rs.2.26 crores at Ahmedabad, Bhopal, Bombay, Delhi and Lucknow. During 1976-77, sanctions were issued for the construction of about 700 residential quarters at various places. In addition, 32 houses were purchased from the housing Boards at Lucknow and Bombay. In 1977-78, sanctions were issued for the construction of 1522 residential units of various types at places like Bhubaneswar, Calcutta, Coimbatore, etc. Some ready built houses were also purchased during the same year at places like Meerut, Moradabad, Bareily etc.

No substantial progress could be made toward constructions of departmental office buildings during the decade ending 1977-78 due to the ban on construction of buildings. However, during financial year 1978-79, there was a budget provision of Rs.1 crore for the construction of departmental office buildings. Sanctions were also accorded for the construction of 798 residential quarters at Kanpur, Agra and Madras.

In 1979-80, approval for the construction of office buildings at Nagpur, Shillong, Ernakulam, Kota etc. at an estimated cost of Rs.2.05 crores was accorded.

The construction of residential accommodation at Bhopal, Hubli etc. was also approved at a cost of about Rs.0.94 crores.

The importance of providing suitable accommodation for office use and residential accommodation for officers and staff of the Income-tax Department was further highlighted by the Estimates Committee (1980-81) in its 9^th report (7^th Lok Sabha). In the light of this, the construction programmes were stepped up and concerted efforts to create as much of departmental accommodation as possible for the Income-tax Officers scattered all over India continued to be made. Earnest efforts to provide residential accommodation to the staff of the Income-tax Department throughout India also continued unabated. During the year 1980-81, administrative approvals and expenditure sanctions were accorded for the acquisition of land and/or construction of office accommodation at Ratnagiri, Surat, Palghat, Pollachi, Baroda, Tirupati, Nagpur, Pali. Chittorgarh, Jhansi, Alwar, etc, Similar sanctions for the purchase of land and/or construction of residential accommodations for the staff of Income-tax Department posted at Kozhikode, Dehradun, Chandigarh, Bolangir, Jorhat and Patna were issued. During the year 1981-82, administrative approval and expenditure sanctions were issued for construction of office accommodations at Kota, Bhilai, Bhopal, Amritsar, Nasik, Meerut, Visakhapatnam and Hapur. Sanctions for constructing residential accommodation for the officers and staff of the department posted at Kanpur, Jorhat, Nasik, Saharanpur, Hubli, Coimbatore, Calcutta, Varanasi and Delhi were also issued. Sanctions were also accorded for the purchase of ready built flats at Simla and Kota. During 1982-83, sanctions for purchase of land and/or sanction for residential quarters for the officers and staff of the Income-tax Department at Nalgonda, Karimnagar, Bhilwara, Phulbani, Bangalore, Durgapur, Simla, Bulandshahar, Jaipur, Nagpur, Ranchi, Jullundur, Dehradun, Meerut, Sangareddy, Nizamabad, and Kurnool were issued. Sanctions for the purchase of land and/or construction of accommodation for the offices of the department at Muzaffarnagar, Bulandshahar, Amravati, Rampur, Nalgonda, Karimnagar, Sangareddy, Nizamabad, Kurnool and Durgapur were also issued. During the year 1983-84, sanctions for purchase of land & ready built houses were accorded for Aurangabad, Allahabad, Jabalpur, Tirupati, Chandigarh, Ahmedabad, Sagar, Saharanpur, Patiala, Nagpur (for National Academy of Direct Taxes) Ludhiana, Coimbatore, Bhubaneshwar and Gorakhpur. Similar sanctions for the purchase of land and/or construction of accommodation for the offices at Bombay, Panaji, Kanpur, Aligarh, Bankura, Rohtak, Virdhunagar, Gauhati, Digboi, Besti, Trivandrum, Bangalore, Meerut, Vadodara, Lucknow and Vellore were also issued.

In addition to the above, proposals for purchase of land and construction of residential/office accommodation at several other stations are also under consideration at various stages.

During the conference of Commissioners of Income-tax held in May, 1984 it was recommended that in every station where an Income-tax office is located the department should have its own accommodation. Where it is practicable within the time constraint, acquisition of land through land acquisition proceedings by the State Government was recommended to be resorted to. The percentage of satisfaction in respect of type I & II residential accommodation was desired to be at least 90% while that for other types i.e. III, IV, & V was aimed at 100%. As the construction of the quarters is likely to take long time, it was decided that to achieve the objective of 90% and 100% satisfaction, efforts should be made for purchase of ready built houses from Urban Development Authorities and builders. There has thus been increasing suitable office and residential accommodation and strenuous and honest efforts are being made to solve this problem.


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