The Hindu Business Line : The promotion commotion

ADMINISTRATION of the Income-Tax Act, 1961 has posed enormous challenges in the recent past. Technology has permeated several areas of the administration and is a necessary part of the overall scheme of the Act. The fact is, in today's context, in huge set-ups such as the I-T Department, there is a need to use systems to drive the business of collecting taxes.

There is also a growing feeling that interface with assessees should be as minimal as possible. While technology is important, processes are equally crucial. Take for instance, the HR process. Recently, a promotion order was issued wherein Commissioners of Income-Tax were promoted as Chief Commissioners of Income-Tax.

The order

By Order No. 16 of January 31, 2006, thirty-nine Commissioners/Directors of Income-Tax were promoted as Chief Commissioners effective February 1. It is learnt that this order was pending since September 2005 and the delay of 5-6 months was for the process to culminate into an order. Paras 3 and 4 of the order makes interesting reading:

"On promotion, these officers are posted as CCsIT (OSD) at the same situation and will continue to exercise the functions and powers of the post they are presently holding. Orders for posting of above officers shall be issued separately."

Effectively what it means is that while promotions have come into effect from February 1, these officers will continue to discharge their current functions as Commissioner.

This is not only unusual but also illogical. How can one be promoted and not undertake the functions of the new assignment? Whatever be the compulsions, postings can be made at least wherever vacancies are available so that those posted get on with the job. Further, such a vacuum affects the performance of duties.

First, the Chief Commissioner is a creature of statute and comes under the category "income-tax authorities" placed in Chapter XIII of the Act. Each designated authority has to discharge his functions in accordance with the provisions of the Act. Second, the Fundamental Rules and Service Rules (FRSR) in page 223 lays down the regulations dealing with discharge of official functions. The relevant portion is as follows:

"The Law Ministry has advised that an officer appointed to perform the current duties of an appointment can exercise administrative or financial powers vested in the full-fledged incumbent of the post but he cannot exercise statutory powers, whether those powers are derived direct from an Act of Parliament, e.g., Income-Tax Act or Rules, Regulations and By-Laws made under various Articles of the Constitution, e.g., Fundamental Rules, Classification, Control and Appeal Rules, Civil Service Regulations, Delegation of Financial Powers Rules, etc."

Hence, it is clear that once an order is passed promoting a person as Chief Commissioner, he is precluded from performing the duties and functions of a Commissioner except those relating to administrative matters. For example, it is not possible now for a promotee to pass an order under Section 263 which is the domain only of a Commissioner. It is learnt that postings for these promotees will happen only during May-June 2006. This means that from February 1to the time the postings are made, we will have 39 new Chief Commissioners who will only be handling administrative or financial duties but not the statutory functions of a Commissioner contained in Sections 263/264 of the Act.

Clearly, the aforesaid situation could have been avoided if the process of promotion had been expedited. In an era of globalisation and fast changing environment, it is intriguing that such promotions should actually be implemented through the process that involves files travelling right up to the office of the PMO. Should the system not be so designed as to empower the Chairman of CBDT, who is effectively the CEO of the I-T Department, to undertake such an exercise and be held accountable for the same?

These crucial process issues need to be addressed. Most of the assessees may not be aware of the implications of this promotion order, which has created more complications than the provisions of the Act. There are around 130 Chief Commissioners and 800 Commissioners on the rolls of the Department and the HR process involving promotions has obviously not changed with times. The numbers are mind-boggling and no amount of technology infusion can solve this problem unless structural changes are made in the process.

A SPECIAL CORRESPONDENT