After the immediate euphoria over the Budget is over Indian entrepreneurs, promoters, start-ups, and industrialists are not only concerned but are worried about the three draconian proposals of the Budget.
First, the freedom to government officials to “Search/ Survey” with no accountability: Section 132 and 132A amended that “the ‘reason to believe’ or ‘reason to suspect’, as the case may be, shall not be disclosed to any person or any authority or the Appellate Tribunal.”
This is by far the most harsh and bizarre change. It was a settled law that you cannot do any survey till you have any reason to believe there is something bad against the revenue. The income tax officers should not just disturb anybody on mere suspicion, or cause any anguish, personal or official, out of their one-sided will. If this amendment is allowed, it may lead to “Tax man’s terror”. The law has been changed retrospectively since 1962. That is compromising the cases which are subjudice currently.
The second is freedom of ITO to attach properties during the survey; Section 132(9B) added. If during survey the ITO feels it is important, then he/she can take permission of the Director General and attach any property for the realization of the tax. After the amendment that empowered the official not to give any reason for search, the right of “provisional attachment” of properties is feared lead to “Taxman’s Terror”.
The third is the freedom to ITO, to reopen cases upto 10 years old. For more than a decade the settled law was that in case of Survey, maximum 6 years old cases can be re-opened. Now, they have taken the option to reopen upto 10 years (condition the loss to revenue is ` 50 lakhs or more and if it exists in form of an Asset).
These three harsh changes shall be w.e.f. 1st April 2017, after the passage of Finance Bill and notification. This was voiced in an open house meeting between the Finance Minister Arun Jaitley and industry leaders after the Budget. Indian businesses are concerned about harassment at the hands of the tax men and the threat of heavy punishments including jail term. The assessee is required to pay up to 25% of the tax amount as assessed by the assessment officer.