Former Congress Minister of Finance P Chidambaram, as part of one of his 'noble' schemes, had aspired to ensure 'minimum human intervention' in tax assessment and execution. In a way, he wanted a faceless tax administration system. He couldn't execute it though he efficiently played the system to maximize his political fortunes.
Working on this 'noble' scheme, the NDA government has purportedly come about with a scheme branded as "honoring the honest taxpayer."
Time will tell whether the scheme really succeeds in its mission. But it has already triggered some anxieties among the executors.
IRS officers are feeling helpless and angry over the government stereotyping them as dishonest following the government's decision to turn the tax administration into a seamless and faceless network-centric operation without any personal contact whatsoever. They feel that the dignity of their service has been compromised by their seniors who have failed to convince the political dispensation that not all IRS officers are corrupt and that the entire IRS shouldn't be treated in the same manner. They are disheartened that PM Narendra Modi has used expressions like "setting, jaan-pehchan, collusion, harassment, etc" to describe the functioning of the IRS, while the other organs of the state like judiciary, police, lawmakers, and businesses have been spared the 'honor.' They believe that the PM's stand on the IRS is a biased one and may be motivated by his own helplessness to clean up the system as promised by him to the voters for ‘a corruption-free India’.
It is argued that the new network-centric faceless operation requires unstinted cooperation and support of IRS officers, who are already grappling with the current system-based functioning that has not yet stabilized and is a cause of grievance for the taxpayer and the tax officer alike.
It is also argued that the timelines given for implementing the new setup may not be practical as the assessees may not be ready since many businessmen still maintain manual books and network connectivity in remote areas is poor? It is feared that lawless assessees may find a handle not to comply in the absence of tax authority in their vicinity. It is argued that the general assumption of an honest taxpayer and a dishonest tax officer is flawed and is based on crowd-pleasing stereotypes.
It is further argued that the element of a hurry, visible in the full-fledged extension of the e-assessment scheme without stabilizing the functioning of the existing ReACs, may prove its bane like the scheme of demonetization/remonetization. It is suggested that "we should have seen at least one full cycle of the result, taken feedback and understood the problems of all stakeholders, officers, taxpayers, taxpayer representatives before making this full-fledged extension. We should have seen whether the officers are able to understand the complex issues without proper representations, whether both sides are capable of understanding each other merely by written submissions. We should have tried to form a unanimous view of the Department on each issue using the existing ReACs set-up. Up till now, all the system related work was related to accounting, electronic calculations, etc. Taking over of this work by the CPCs has resulted in very good results. But the work which required human intelligence which depends on the ingenuity of the officer cannot be easily taken over by the system without giving full regard to the human aspects."
It is further recommended that the "selection of cases using CASS is one such aspect of work which requires human intelligence. CASS is still not very effective despite being implemented for more than 10 years. Investigation and framing an assessment require intelligence, drive, motivation and perseverance besides an understanding of complex issues. We may have built a system that is capable of handling a faceless assessment. But have we readied the manpower who is required to execute it? Have we trained it? Have we improved their reading, writing skills, computer skills? Have we ensured that they are ready and willing for this change? Have we studied how the breaking of a wholesome task (which gives recognition to the officers) into components (being executed by anonymous entities) will still motivate the officers? Since the success of this scheme requires success in all these aspects, a study of these aspects and a calibrated approach on their execution would have led to better results".
Since these suggestions have followed much after the government announced its decision, it is unlikely they may be heeded to. Only the failure of the announced scheme may prompt the government to step back and work out innovations to make the scheme succeed.