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Re-Look on the working of the Centralized Procession Center (CPC) 04 October 2013

In the case of Vaghijibhai S. Bishnoi vs. Income Tax Officer & 1 (Special Civil Application No. 6726 of 2013 dated 09-07-2013), the Hon’ble Gujarat High Court has examined the issue of processing of return filed electronically and subsequent issue of refund. On examination of the records, it was found that though Form 26AS available on the net clearly reflects the amount of TDS paid, yet while processing the return, the credit of the TDS claimed was not given by the Centralized Processing Centre (CPC). Further even after an application for rectification was preferred pointing out this mistake and requesting for giving credit of TDS, no reply to such communication was received by the assessee. The assessee therefore had filed the above Special Civil Application.

The Hon Court has examined the details provided in the official website of the Income tax Department, which reveals the extension of computerization programme of the Department and their vision in this field and commented on the Centralized Processing Center as under:

“15.1 Thus, computerization of the Income Tax Department when has undergone the exercise of ‘a comprehensive business process reengineering’, it is expected that Department’s wish to herald ‘Tax payers friendly regime’ becomes the reality. A ‘paradigm shift is programmed‘ as tax payers’ population has been growing exponentially, ushering all the imperative changes and modernization of administration.

15.2 If the Centralized Processing Center meant for return processing, accounts, refund, storage of data etc. adds to the difficulties of the Tax payers, due to lack of distribution of work between back office and front office, and that too, after having been pointed out the actual error, a serious relook is expected.”

In view of the observations of Gujarat High Court, CBDT should rise to the occasion and immediately address the difficulties our taxpayers are facing relating to processing of electronically filed returns and issue of refunds.

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During my 37-year-old career with Income Tax department, I moved from place to place, post to post. For me, every posting was a challenge, and at the same time an opportunity to deliver.

After my retirement as Chairman of Central Board of Direct Taxes, I was invited by various institutions and NGOs to deliver talks on tax matters. While advising taxpayers across sectors, I noticed, our vast salaried class including armed and paramilitary forces, pensioners or senior citizens, NRIs, professionals and small business establishments need the right guidance. Most taxpayers do comply with their tax obligations fully. Yet, they are not somehow relaxed and are burdened with anxieties. A large number of taxpayers are not even aware that getting tax refund on time is a basic right.

In one such meeting, a middle-aged man quizzed me why could not I give tax advice 24X7. For a moment, I had no answer. He then added that I should give tax solutions online so that he does not need to come from a remote place to attend my lecture. I thanked him for his suggestion.

For a while I was restless. Already I had got myself enrolled as a Member of the Bar Council of Delhi and as an Advocate of Delhi High Court Bar Association, thanks to my law degree from the University of Allahabad. Yet, I was not sure how I could help the vast majority of taxpayers who somehow maintain a safe distance from the taxmen. I then tossed the idea of creating a tax think-tank with some of my former colleagues and highly spirited individuals. All of us immediately agreed on one count: millions of Indian taxpayers expect to access tailor-made tax research materials and seek guidance from those who have been parts of the tax machinery for decades.

That is how CTAR was born. So, be a part of our passionate journey to explain tax laws and rules in simpler words. Just drop us a few lines on any query related to direct and indirect tax or FEMA. We are at your assistance. We also look forward to hearing your experiences while dealing with the system.