The new changes in the Income Tax Act have created fear about taxmen knocking your doors anytime. Many fear harassment. The way the changes were made through Finance Bill has evoked criticism and RSP MP N K Premachandran was in the forefront to oppose the government.
Why have the amendments invited so much criticism?
Our major opposition was about the way in which the Bill was introduced. There were amendments to so many legislations, including IT Act, Companies Act and Representation of People’s Act among others. These are three very important legislations in which drastic and cardinal amendments were proposed. These would have never become part and parcel of the Finance Bill because the Article 110 of Constitution is very clear on that. The government was trying to push through all these legislations on the pretext of Finance Bill. Government does not have any authority to move such amendments through this way but unfortunately using the brutal majority in Lok Sabha, they are bulldozing. I am using the word bulldozing. They were pushing it through the brute majority of the government. Anything which is connected to the imposition or remission of taxes or any other financial matter, incidental or consequential to the financial as well as taxation, that will come under the purview of the Finance bill.
But my point is that here it was absolutely backdoor legislation. The RP Act, the Companies Act were amended. My major objection on Companies Act was that there was a ceiling limit for political funding by corporates. As per the existing provisions, a corporate can provide public funding to a party, there is a ceiling limit of 7.5% of the average profits of the last preceding three years. Now that has gone. The ceiling has been enhanced limitless. Not enhanced, it is limitless, it is unlimited. The government is always talking of transparency and accountability. The Prime Minister is speaking about fighting blackmoney and corruption. See, what has happened now.
There was change in another provision. As per the existing provision, details of this funding have to be provided to the Income Tax Department. But the new amendments in Companies Act have done away with this. Now, you have unlimited political funding and there is no need to provide details about the money donated and to whom. These are very major changes. This is against the slogan of public transparency and accountability. We have very strong objections and that is why we moved amendments. But the amendments were negated. Also, the RP Act has also been amended.
Many more legislations, on tribunals and others, are amended through which new institutions are created, new tribunals are being created. If you have to have some amendments to the particular law, you have to come with an independent legislation. Instead of bringing an independent legislation, the government is amending everything through the Finance Bill. This is not right.
One of the main concerns in the amendments is about the powers given to tax officers. Do you think so?
Absolutely. It is a concern. The IT Act is amended for giving ample power to lower officials to conduct searches, raids and seizure. Earlier, these were under the control of senior officials. The Assistant Commissioner is now empowered to do so. Unbridled power is being given to the lower officials, so that they can harass people. Why is it that these powers were given to senior officials earlier? It was done to avoid harassment. If you are making Assistant Commissioner of a local area entitled to carry out searches, inspect, seizure, then it will definitely be misused. It also leads to more corruption. In a way, we can say corruption is decentralised. The government is decentralising corruption to the grassroot level.
Retrospective clause and non-disclosure are other themes that are being raised by the critics. What is your position?
Unbridled power is being given to officers and that too with lower levels. The officers who conduct searches need not provide reasons for their actions to the person concerned or authorities like Appellate Tribunals. You can’t go for a stay.
Isn’t it violation of rights?
It is violation of principles of natural justice. If my house is being searched, then at least I should know the reason for that. Then only I can defend it. It need not be disclosed to even an Appellate Tribunal means unbridled authority given. The right to defence is being lost. That is being given retrospective effect. I reasonably believe it is to save some officers for their past actions. This has to be examined. Why is it being made retrospective from Oct 1, 1975? There may be some officers who had harassed a person now he does not even need to tell the Tribunal the reasons.
Are you suggesting that these amendments are not leading to tax reforms but tax terrorism?
Absolutely.
What do you think is the intention of the government?
I don’t think it is reforms. If the intentions were bonafide, the government could definitely come up with a proper, independent legislation. Instead, they are taking the Finance Bill route. Why are they not bringing a standalone legislation? Then the merits and demerits can be discussed in Standing Committees, the Lok Sabha and Rajya Sabha. They want to avoid discussions. That is very clear.
One should remember that the original Finance Bill was placed on February one. All budget papers were placed in Parliament on February one. The lack of bonafide is very clear. This Finance Bill comes up for passage in Lok Sabha on March 21. That day, the Bill was taken for consideration at 2 PM. Just three minutes before, a cluster of amendments were circulated, which is bigger than that of the original bill. Nobody could understand the content. I could initially raise only technical objections. I couldn’t go on the merits. We could argue only after Rajya Sabha returned the Bill with amendments. Through this, 40 Acts were amended. My question is if you want to amend around 40 legislations which were passed in the past seven decades, why didn’t you circulate it early. Why didn’t you put it in the original Bill?
Parliament is put in darkness and they are bulldozing legislations. There are no threadbare discussions. If the government wanted to protect Income Tax officers and decentralise so that more actions can be taken, why didn’t they bring in an independent Bill. Why don’t they come up with an amendment to the RP Act, or Companies Act? You should know none of the amendments have to do anything with the original provisions of the Finance Bill. That is why the Finance Minister sought exemption of rules. As per rules, one can put an amendment only to an existing provision. Whatever provisions in the Finance Bill, only that you can move.
They have the majority in LS. They can very well pass it if they bring a standalone Bill. So in a hurry, they are putting all these bills together. The way which legislations are bulldozed is very clear from this. I am fully convinced that these amendments do not have any bonafide. There is no transparency. See the legislature is being taken for granted.
How do you describe the move?
Not legitimate.
(Excerpts of the interview appeared in Deccan Herald on Apr 9, 2017)
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