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Three senior officials from the Indian Tax Service who had played a key role in preparing a report on the income tax increase and placed it in the public domain have been charged with violations of the rules of conduct, people familiar with the development told the Hindustan Times. They have also been stripped of their position.
The three officers, according to the documents accessed by HT, are Prashant Bhushan, Prakash Dubey and Sanjay Bahadur.
The action comes just a day after the Ministry of Finance distanced itself from the recommendations of the widely released report that proposed raising the income tax rate to 40% from 30% for those with incomes of Rs 1 per year. , reimposing a wealth tax on those with a net wealth of Rs 5 crore, and a one-time Covid-19 relief rate of 4% on those with a taxable income of Rs 10 lakh and more.
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The government described the report as ill-conceived and irresponsible.
Authorities told the Hindustan Times that a preliminary government investigation had blamed all three officials.
Prashant Bhushan, a 1988 batch IRS officer, is the secretary general of the Revenue Services Association of India and is said to have put the report, drafted by a group of young IRS officers, in the public domain.
Prakash Dubey, joint secretary of the IRS Association, and Sanjay Bahadur, a 1989 batch officer, have been accused of getting young income tax officials to prepare a report that they forwarded to the IRS Association that eventually put it in the public domain.
Prakash Dubey was director of the personnel and training department, while Sanjay Bahadur was the Principal Research Director of the income tax department, Northeast Region.
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A government official explained that the three officers, despite having more than 30 years of service, had not exercised due attention and misled 50 young officers to prepare the report and distribute it.
In this case, the three officials at the rank of Chief Commissioner, instead of sending the government through official channels, misled the junior officers and made it public.
“This created panic and uncertainty in fiscal policy in the already stressed economic conditions in the country,” said a senior government official, explaining why the government had moved quickly and firmly to act against the three officers.
Senior government officials stressed that officials had nothing to circulate reports on an official matter in their personal capacity. They, one of them said, referring to the charge sheet issued to other officers, had ended up creating confusion and uncertainty regarding the government’s policy on income tax rates, which could have an adverse impact on the economy. Especially when the country is fighting a pandemic and the government wants to ensure a stable fiscal regime.
It has also been pointed out that the proposals are against the government’s current fiscal policy.
In this year’s budget, the government offered people the option to pay lower rates of income tax as long as they waived tax breaks.
It had previously drastically cut corporate tax rates in September, sacrificing Rs 1.45 lakh crore in revenue. Companies had the option of opting for a lower corporate tax rate of 22% (15% for newly incorporated companies) as long as they do not seek exemptions.
