India to curb 'tax harassment', says I-T notices now only through centralised system

New Delhi, Aug 24: Finance Minister Nirmala Sitharaman on Friday announced measures to address complaints of harassment on issuing of Income Tax notices and orders by tax authorities.

Sitharaman's assurances comes in the wake of industry leaders speaking out about tax officials harassing businesses.

Coffee king VG Siddhartha, who committed suicide had cited "harassment" at the hands of the tax authorities as one of the reasons for fund crunch in his company Cafe Coffee Day.

"There was a lot of harassment from the previous DG income tax in the form of attaching our shares on two separate occasions to block our Mindtree deal and then taking the position of our Coffee Day shares, although the revised returns have been filed by us. This was very unfair and has led to a serious liquidity crunch", Siddhartha said in the letter.

Sitharaman also said that the government would take measures to curb such instances, including the introduction of "faceless" tax scrutiny from the upcoming Vijaya Dashami.

Sitharaman said it has been decided that from 1 October, all notices, summons, and orders of the Income Tax Department would be issued through a centralised computer system and would also have a a computer generated unique Document Identification Number.

She further said that tax notices and summons without a computer generated unique ID number would not be valid. This measure would help curb unauthorised tax summons.

"This is one way in which fears of harassment of assessee can be addressed. Unless a notice or document carries a DIN, it need not be taken seriously by the assessee at all," she said.

"I want to assure that we are responsive and the reform process will continue. There is no intention to prosecute," she added.

On violation of corporate social responsibility norms, the Minister said that such violations would not be treated as a criminal offence. Prosecution will be replaced with a more humane approach and wealth creators will be honoured and respected, she said.