Finance Ministry Warns Tax Officials on Resolution Against Revenue Department

The finance ministry on Wednesday warned of strong disciplinary action against some tax officials who passed a resolution against directives issued by the Revenue Department.

The ministry has called the resolution an act of “insubordination”.

“No department of the government has absolute autonomy, and has to serve the larger goal of the government,” a release issued by the finance ministry said.

The income tax officials had alleged that the Department of Revenue, headed by Hasmukh Adhia, was interfering in operational matters, which was hurting the morale of income tax department officials. In the resolution passed by them, they charged the Revenue Department of undermining the autonomy of the Central Board of Direct Taxes (CBDT).

The case relates to an assessment order passed by an officer in Mumbai in which a demand of Rs 10,000 crore was raised against State Bank of India, which the bank was asked to pay on the same day, a source in the finance ministry told BloombergQuint.

SBI had paid Rs 4,900 crore in advance tax, but the assessing officer said the department had received only Rs 1,200 crore, and slapped an interest of Rs 5,800 crore for short payment of advance tax, the source added. When the bank requested for a rectification, the assessing officer determined refund of Rs 9,500 crore which was paid after April 1, 2016.

This was a case of jacking up revenue collections for the year, the finance ministry source said.

The revenue department had then asked the Central Board of Direct Taxes to take action against the responsible officers, which triggered the resolution.