Cadre review and restructuring report : Some Inside News.

The Income Tax Dept. is yet to submit it's report in this regard. As per our sources, the report is almost finalised. Different sub committees had shown their presentation in this respect. We could collect some part of the presentation of the restructuring report by our sources. For the benefit of our viewers, we represent the synopsis. It may kindly be noted that it is not an official publication.

CADRE REVIEW OF THE INCOME TAX DEPARTMENT

 

ANALYSIS OF FUNCTIONS AND RECOMENDATION FOR RANGE LEVEL ORGANISATION

 

 

 

Sub-Committee Members:

Sh. Vinodanand Jha, DIT (Inv.), Bhopal

Sh. J. Krishna Kishore, Addl. CIT, Hyderabad

Sh. Sanjiv Shankar, Addl. CIT, Delhi

Sh. Rajesh D. Menon, Rep. of ITGOA

 

 

 

VISION, MISSION AND VALUES OF INCOME TAX DEPARTMENT 

•      Our Vision

•      The Department will be recognized as a professional organization, collecting resources efficiently, considerate towards its clients, adapting and improving and promoting voluntary compliance.

 

•      Our Mission

•      To promote compliance with our direct tax laws, through caring taxpayer service and strict enforcement and thus realize maximum resources for the Nation.

 

•      Our Values

•      Integrity of conduct, Dedication to our duties and values, Professionalism in our work, Attitude of service to our clients and Fostering mutual confidence.

OBJECTIVES OF CADRE REVIEW

•    To enhance the effectiveness of the service.

•    Restructure the cadre as to harmonise the functional needs with the legitimate career expectations of its members

•    Estimate future manpower requirements on a scientific basis over the review period

•    Plan recruitment in such a way as to avoid future promotional blocks and at the same time prevent gaps building up

 

GUIDELINES

•    Cadre Review should take into account:

 

ØBPR Exercise and Report

Ø6^th Central Pay Commission Report

ØDOPT/ Government Instructions

FUNCTIONS OF RANGE

The main functions at Range Level are :

Enforcement of the Income tax, Wealth-tax and other direct taxes

laws which are complicated, fast changing and dynamic, subject to

Regular amendments including through the annual Finance Act,

through an integrated process of:

 

v      Receipt of Returns including those relating to Income and Wealth

 

(2) Receipt and dispatch of Internal and external correspondence

 

(3) Processing of Returns

 

(4)Record Keeping of Assessees files and Maintenance of

    Statutory/Administrative/Technical Records

 

(5) Issuance of Refunds

 

(6) Issuance of Notices

 

(7) Assessments and Re-assessments                                     Continued……

FUNCTIONS OF RANGE

FUNCTIONS OF RANGE

FUNCTIONAL CLASSIFICATION  OF RANGE

 

Broadly, the Ranges can be functionally classified as:

Ø  Corporate

Ø  Non-Corporate

Ø  In some charges we find a mix of both Corporate and Non Corporate assessees within the same Range.

 

Ø  Besides the above, Addl. / Joint CITs are posted in various other areas such as Exemptions, Audit, CIB, Investigation, Headquarters, ITAT, Systems/Computer Operations,  various Directorates, CBDT etc.

PRESENT OFFICER/STAFF STRUCTURE  OF RANGES

 

•     Corporate ranges:

Ø   1Addl/ Joint CIT, with 1 ITI, 2 TA (For Inward and outward correspondence), 2 OS, 1/4^th  Steno, 1/3 Peon

Ø   3 ACIT/DCIT each with 1 ITI, 2 TA/Sr. TA, 1/3^rd Steno and 1/4^th Group D

Ø   2 ITO and 1 TRO (Post usually vacant) each with 1 ITI, 2 TA/Sr. TA, 1/3^rd Steno and 1/4^th Group D

 

•     Non-Corporate ranges:

Ø   1Addl/ Joint CIT, with 1 ITI, 2 TA (For Inward and outward correspondence), 2 OS, 1/4^th  Steno, 1/3 Peon

Ø   1 ACIT/DCIT with 1 ITI, 2 TA/Sr. TA, 1/3^rd Steno and 1/4^th Group D

Ø   4 ITO and 1 TRO (Post usually vacant) each with 1 ITI, 2 TA/Sr. TA, 1/3^rd Steno and 1/4^th Group D

Source: Working strength in AP Charge

 

INCREASE IN WORKLOAD OF RANGES

Present workload and Projected:

RECENT  ISSUES WHICH WILL IMPACT THE FUNCTIONING OF RANGES

Ø    BPR Report.

Ø    Creation of New Directorates without providing  for additional staff.

Ø    Non filling of vacant posts and short fall at various level including additional CITs, Inspectors, Stenographers etc.

Ø    Substantial economic growth indicated by increases in turnovers and incomes, resulting in increasing  tax base.

Ø    Massive increase of 460% in collection of taxes which have risen from Rs. 68305 Cr in 2000-01 to Rs. 314468 Cr in 2007-08.

Ø    Massive increase of number of effective assessees from 2,30,02,276 in 2000-01 to 3,36,62,801 in 2007-08.

Ø    Massive increase in workload of assessment (including processing) from 3,37,28,373 cases in 2001-02 to 4,01,92,130 in 2007-08.

Ø    Increase in information flow from various sources including CIB, AIR and other internal and external sources, which require enquiries at Range level.

Ø    Implementation of OLTAS, e-filing of returns, change over to AST, overall increase in computerization processes at various levels etc.

Ø    The new file management system has given rise to several problems, which have led to poor access to files, particularly back records.

Ø    The quantum of scrutiny assessments in area such as central circle have increased substantially. CAS has increased the scrutiny quantum in other ranges.

 

IMPACT OF BPR

•      Separation of routine and assessment/ core functions through the medium of BOD and COD units, is a welcome feature, as it will enable Ranges to focus on core functions of investigation and assessment.

•      The BPR implementation should take into account the need for easy and timely access of the files to the assessing officers. This is particularly necessary for carrying out survey related activities, reopening assessment u/s 147, carrying out enquiries, gathering intelligence, verification of third party information etc.

•      Large section of Indian economy is in the unorganized sector. It is a matter of fact that substantial portion of the economic transactions are unaccounted, mostly made in cash and outside the banking channels. More than 90% of the population do not have access to computers. The BPR should take the peculiar features of Indian economy into account as otherwise, substantial section of the economy would be lest out, which will go against the objective of widening of tax payer base.

•      Implementation of BPR should not result in reduction of  staff, particularly at the level of inspectors and stenographers, in view of the massive projected increase in work load in the near vicinity.

 YEAR WISE TOTAL TAX REVENUE (Incl. Projected)

(Source upto 2007-08:Adminstrative Hand book. Projections are based on average growth rate of preceding  10 years)

WORKLOAD AND DISPOSAL OF INCOME TAX CASES DURING THE LAST 10 YEARS AND PROJECTION
(Source upto 2007-08:Adminstrative Hand book. Projections are based on average growth rate of preceding 10 years)

NUMBER OF EFFECTIVE ASSESSEES
 (Source upto 2007-08:Adminstrative Hand book. Projections are based on average growth rate of preceding 10 years)

 

 

F.Y.        Company        Individual         HUF    Firms       Trusts     Others          TOTAL

1996-97       227228        9761426       412470        1158319       49629 34471 11643543

1997-98       274319        11194953     437251        1172647       51865 36701 13167736

1998-99       295327        15135956     469730        1228023       83847 41328 17254211

1999-00       309627        17653745     507843        1272217       87165 46427 19877024

2000-01       334261        20662926     553194        1336861       63999 51035 23002276

2001-02       349185        23734413     607519        1378706       97272 58784 26225879

2002-03       365124        25935556     644489        1345232       117304        57224 28464929

2003-04       372483        26624224     654848        1338613       154276        57952 29202396

2004-05       373165        24792990     620468        1235373       71375 65190 27158561

2005-06       382021        27370659     642759        1234424       74543 58077 29762483

2006-07       398014        29355248     761439        1241642       75610 71184 31903137

2007-08       498066        30868243     780853        1368373       74077 73189 33662801

 

2008-09       536417        34418091     828485        1390267       80670 78678 37332608

2009-10       577721        38376171     879023        1412511       87850 84579 41417855

2010-11       622206        42789431     932643        1435111       95669 90922 45965982

2011-12       670116        47710216     989534        1458073       104184        97741 51029864

2012-13       721715        53196891     1049896       1481402       113456        105072        56668432

2013-14       777287        59314533     1113940       1505104       123554        112952        62947370

2014-15       837138        66135704     1181890       1529186       134550        121423        69939891

SUGGESTED WORKLOAD PER RANGE

•      Keeping in view with the massive increase in work load projected for the coming years and the need to increase the tax base and also improve the investigation process, the following work load per range is suggested:

 

 

Officer               OS          ITI           Sr TA / TA          Steno         Group D

 

Addl. CIT      02          02               03                  01                   01

 

ACIT/DCIT    -            03                02                01                    01

 

ITO              -            02                02                01                   01

 

TRO              -           02                02                01                    01

 SUGGESTED STRENGTH OF RANGES

•      It is suggested that a number of ranges may be decided in accordance with the above stated ideal/desirable  work load per range i.e. 6000 per corporate range and 50000 for non corporate range. Accordingly,  the following strength of Ranges is suggested:

                           2007-08                     2011-12                     2014-15

                 Assessees    Ranges    Assessees     Ranges     Assessees    Ranges

Corporate          498066      83        670116        112           837138       140

(@6000 Assessees

per Range)

Non Corporate 33164735    663    50359748       1008        69102693     1382

(@50000 Assessees

 per Range)

 

Total              33662801     746    51029864        1130       69939891     1522

SUGGESTED STRENGTH OF OFFICERS CORPORATE RANGES

                               2007-08             2011-12           2014-15

No. of Ranges             83                     112                  140

 

Addl. CIT                   83                      112                  140

 

ACIT/DCIT                249                     336                  420  

 

ITO                          332                     448                  560

 

TRO                         83                       112                  140

 

SUGGESTED STRENGTH OF
GROUP C & D POSTS PER OFFICER

•      The Group C & Group D posts may be increased in accordance with the afore said increase in number of officers as per the following suggestions:

CREATION OF SPECIAL RANGES

    Keeping in view the increase high volume cases both in terms of turnover and profitability, several suggestions have been received for revival of special ranges to be headed by JCIT/Addl. CIT level officers. It was also felt that this move will remove the burden of assessments from range heads, who can now exclusively concentrate on supervisory and managerial functions. If this move is adopted, it is suggested that 250 special ranges may be created, one in each CIT(Admn) charges. In large metros, two special ranges per CIT(Admn) charge may be created.

      Another suggestion received was to create a system of close monitoring, audit and supervision of assessment by range heads, as an alternative to creation of special ranges.

OTHER CHANGES SUGGESTED

•    Financial powers at Range level

•    Functional autonomy

•    Industry/ Trade based Jurisdiction

•    Improvement of Record Keeping and File management

•    Tax Payers Assistance Cell at Range Level

•    Decentralisation and Delegation

•    Real-time, Online  E- Reports

•    Range level training programmes, study circles, seminars, exchange of ideas and knowledge

•    Intelligence Units at Range Level

 We will try to provide more information in this regard as and when available.

Source : Did not want to be named.

Committee formed to examine the transfer policy of Group A service of Income Tax.

The Govt. has formed a committe to examine various aspect of the transfer policy and suggest suitable amendmends to the existing transfer policy. The committee was asked to submit it's report within one week of it's formation.

View the order.

Though the time frame of it's report is already over, the Govt. yesterday, on 16th March added three new members to the committee. Most significantly, the Secretary General of ITGOA {the organization of promotee officers of Income Tax} is included in the committee.

View the order adding new members.

Cadre review and restructuring would be finalised by April this year.

The cadre review and restructuring of the Department of Income Tax would be finalised by April this year.

The exercise has been initiated in the wake of Sixth Pay Commission recommendations and the changing work scenario due to technology integration and automation of many functions.

Talking to mediapersons here today on the sidelines of the state level joint conference of IT Employees Federation and IT Gazetted Officers Association, Member (Personnel) Central Board of Direct Taxes (CBDT) Sk Naimuddin said that the 19-member Cadre Review Committee would be submitting its report on the basis of consultations with all stake-holders across all sections and regions within April first week.

Action would be taken accordingly. The last restructuring was done in 2001-02.

Naimuddin emphasised on a fresh look into the cadre structure in order to enable and equip the IT Department to meet challenges ahead.

The move also assumes significance as the Department is undergoing a massive computerisation of its offices which would be completed in three to four months, he said.

The Direct Tax collection target which have been pared down to Rs 3.45 lakh crore under the impact of the global economic downturn for the 2008-09 fiscal would be met.

Already Rs 2.61 lakh crore have been achieved, he added.

Enlargement of scope of Tax Return Preparer (TRP) Scheme

he Government has decided to enlarge the scope of the existing Tax Return Preparer (TRP) Scheme and authorize them to prepare and furnish returns of Tax Deducted at Source (TDS) and Service Tax, in addition to income-tax returns. To carry out the aforesaid decision, the Central Board of Direct Taxes (CBDT) has decided to retrain the TRPs. For this purpose, a retraining course consisting of 15-day self-study followed by classroom training will be organized for TRPs relating to Income Tax and for Service Tax

View the press release here.

View the details here.

Income Tax Employees charter of demand adopted at XXVII All India Delegates Conference of ITEF.

The XXVII All India Delegates Conference of the ITEF held at Mumbai from 10^th to 14^th February, 2009 after the deliberations on the report submitted by the Secretary General resolved unanimously;

 

That the ITEF should embark upon agitational programmes including strike action, if no settlement as assured by the CBDT earlier is not brought about on the charter of demands and especially on the following issues immediately.

 

(i)                            assigning grade pay of Rs. 4600 as per Government of India notification to Inspectors, Private Secretaries and Administrative officers and Rs. 1800 to all Group D employees;

(ii)                          all employees are provided with mobile phone facility out of the infrastructure fund;

(iii)                         no outsourcing of any departmental functions, especially the return processing, as per the recommendations of the BPR report;

(iv)                        the BPR should not be acted upon without reaching an agreement with the ITEF

(v)                          all Group C employees be provided with desktop computers to facilitate and speed up the functions entrusted to them immediately.

 

The Conference decided that the newly elected CHQ Secretariat should meet immediately to chalk out necessary campaign programme to popularize the demands and mobilize the members for the eventual action, to be organized;

 

The Conference regretfully noted that the DG (Systems) and the Directorate of System have totally failed in providing the software programme and hardware tools in time resulting in inordinate delay in processing returns.  The migration of data to the National Server and the delay in connectivity have compounded the problem.  The Conference decided to demand that no new system be introduced before the present scheme is stabilized and made effective.

 The Conference after considering the Accounts submitted by the CWC for the three years came to the conclusion that the financial health of the ITEF CHQ has to be improved and the renewal fees which are the only sustainable income should be significantly increased.  It was also considered by the house that in the event of the revision of wages on acceptance of the 6^th CPC recommendations, the income of members of the ITEF has also gone up and in the circumstances an increase in the rate of renewal fees would not be a financial strain for the members. Accordingly it was decided that the renewal fees would be raised from April, 2009 onwards as under:

 

            1. for those employees who are in PB 1.                       Rs. 20/=

            2. for those who are in PB 2                                         Rs. 30/=

 

            The Conference also took note of the fact that the dues on account of salary and allowance for the outgoing Secretary General are huge as is depicted in the Balance Sheet for the year 31.3.2008.  The Conference asked the CHQ Secretariat to immediately pay off the dues to Com. K.K.N. Kutty from out of the existing funds.

Pranab disappoints; no tax sops

External Affairs Minister Pranab Mukherjee, who is also managing the finance ministry, said in Parliament on Monday while presenting the Interim Budget for 2009-10 that tax rates must fall and our ability to pay taxes must rise.

However, he disappointed big time by not announcing any relief in taxes or change in the tax structure to bring relief to the common man.

So, in effect, the tax structure for the common man remains what it was the last year.

He did not announce any major sops and stuck to highlighting the achievements of the United Progressive Alliance government and just reading out a lackluster statement of accounts and achievements of the government over the last five years.

The stock markets sank as Mukherjee's speech continued, especially concerned over no fiscal measures or duty cuts or tax sops being announced.

Of particular concern to the industry and the markets is the rising fiscal deficit and the fact that the nation will have to wait for a full Budget to get any relief.

Source : Rediff.com.

Centralized Processing Centre for Income Tax Returns to be set up at Bangalore

The Union Cabinet has approved the proposal of the Income-tax Department to establish a Centralized Processing Centre (CPC) at Bangalore for processing of all electronically filed returns in the country and the paper returns filed in Karnataka. The CPC will enable the Department to process the returns and issue refunds expeditiously. It will encourage more tax payers to resort to electronic filing of returns. The creation of the new center entails an estimated expenditure of Rs. 255.46 crores over a period of five years. 

The workflow in the CPC will be managed by departmental officers and staff who would be assisted by vendor supplied manpower. The Departmental Officers and Staff will be responsible for logistics, coordination, supervising operations and sovereign responsibilities. They will also be responsible for resolution of mismatches in the information contained in the tax return and the Departmental data base and redressal of public grievances. The vendor would be responsible for developing software for processing of Income-tax returns and tax accounting. He will also be responsible for collection of returns from income-tax offices, scanning data-entry and storage of IT returns. 

The process of selection of the vendor is in its final stages and the Income-tax Department expects to operationalize the Centre within the next four months. 

The data relating to processing of returns would reside at the Primary Data-Centre of the Income-tax Department which has recently been commissioned at New Delhi. The Income-tax Department will continue to exercise full control over taxpayers’ data so as to maintain privacy and security of tax payers’ data. The establishment of the CPC will enable the department to release high-skilled resources, presently deployed for processing of returns, for redeployment to pursue large scale cross verification of actionable information. 

Backgrounder 

The processing of tax returns is a low skilled voluminous activity. Further, the processing output is extremely slow since the business process is cross functionally designed. As a result, the pace of issue of refunds and follow up action on recovery of underpayments is slow. This imposes an extremely high burden on the exchequer in terms of payment of interest on delayed refunds and also results in taxpayer dissatisfaction. This also encourages interface with the taxpayer. The delay in the recovery of the underpayments also entails a relatively higher interest cost for the Government in as much as it has to resort to borrowings to finance its expenditure. Therefore, the outcome of this processing exercise is not commensurate with the resources used. However, the importance of processing of returns lies in the fact that it signifies the ability of the tax administration to swiftly deal with non-compliance. 

Source : Govt. of India Press release.

Suggestions invited from employees of Income Tax regarding restructure

The Cadre Review Committee has invited suggestions from departmental stakeholders, including individual employees on various issues/areas of cadre review to make the consultations wide and inclusive.

View the original order here.