CBDT chargesheets three IRS officers for report on tax hike

Three Indian Revenue Services (IRS) officers were issued chargesheets by the Central Board of Direct Taxes on April 27.

The officers, of rank principal commissioner, have been charged for “misguiding” young taxmen and “unauthorisedly” making public a report that called for a hike in taxes to fund the economic fallout of the COVID-19 pandemic.

The three IRS officers – Sanjay Bahadur (principal director investigation, northeast region; 1989 batch), Shri Prakash Dubey (director DOPT, IRS Association’s joint secretary; 2001 batch) and Prashant Bhushan (principal commissioner of income tax, Delhi, and IRS Association’s general secretary; 1988 batch) – have been given 15 days time to submit a written response in their defence to the chargesheets and also on whether they want to be heard in person.

A preliminary inquiry by the CBDT revealed the “role and complicity” of these senior officers in the preparation of the report named FORCE (Fiscal Options & Response to the COVID-19 Epidemic), which advocated tax hike, the imposition of wealth tax, inheritance tax, the imposition of COVID-19 surcharge, sources said.

According to the inquiry, while Dubey and Bahadur got junior officers to prepare a report and unauthorisedly gave it to the IRS Association which made it public, Bhushan unauthorisedly put the report in public domain.

These officers also have been divested of their current duties on charges of violating Rules 9 and 3(1)(xx) of the Central Civil Service Conduct Rules.

“The government would have definitely given due consideration to suggestions made by the young officers.However, in this case, the reports, instead of being sent to the government through official channel, these senior officers of rank of principal commissioner misguided them and went public with report which created panic and tax policy uncertainty in the already stressed economic conditions in the country,” a source said.

The controversial report, prepared by about 50 young IRS officers, among others things suggested raising the highest tax slab rate to 40 percent for income above a minimum threshold of Rs 1 crore or re-introduction of wealth tax for those with a net wealth of Rs 5 crore or more to help pay for the coronavirus economic fallout.

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