Storm over deal between SBI execs, taxmen


NEW DELHI: Sometime around the middle of March, the government was staring at a Rs 30,000-35,000 crore shortfall in direct tax collections, prompting revenue secretary Hasmukh Adhia to write to CBDT chief Atulesh Jindal, pointing to the gaps. By the time the financial year ended the deficit had narrowed down significantly but the revised target could not be met.

As tax officers across the country scrambled to meet the target at the end of 2015-16, a senior tax officer in Mumbai along with his junior met top SBI executives over tea and allegedly worked out an arrangement under which an order demanding Rs 10,000 crore was passed on March 30 and the bank was asked to pay the amount the same day.

The public sector player obliged (for reasons best known to it) but sought a rectification, pointing out that it had paid Rs 4,900-crore advance tax, which was recorded as Rs 1,200 crore by the department.

This had resulted in the assessing officer slapping an interest of Rs 5,800 crore for short payment of advance tax. A day later, the tax officer accepted SBI’s plea and on April 1, Rs 9,500 crore was refunded to SBI.

There was no noise about the deal until around the middle of April, when the revenue department noticed refunds of Rs 20,000-25,000 crore during the first fortnight of the financial year. When records were called, it was found that SBI had received large refunds along with a leading auto company and another bank. Adhia is learnt to have sought further details resulting further revelations.

As reported by TOI on July 14, the government decided to act against the officers to set an example for the others. This resulted in the senior tax officer being moved from Mumbai to Nagpur, while his junior was transferred to Thane, said sources.

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This Government has “Faking” in it”s DNA ! GDP/WPI/CPI all are faked like this only !rohan

The action against the officers, for what many of them believe is standard operating procedure to collect taxes at the end of the financial years, seen as the trigger for the Indian Revenue Service Officers Association’s Mumbai unit to pass a resolution accusing the revenue department of going beyond its mandate.

While the finance ministry brass is of the view that such action is justified at a time when the government is trying to clean up the system, tax officers said the two officers should have been pulled up but not transferred. They also said the action would result in tax officers not “pushing hard” to meet the target. In any case, there is a view that the targets are often too steep and do not always reflect the economic reality.