Kanara Chamber of Commerce & Industry (KCCI) Mangaluru Opposes Merger of Mangaluru Income Tax Office, located in Attavar, with IT-Office in Panjim-Goa
Mangaluru: The Central government’s decision to close the Office of Principal Commissioner of Income Tax (Pr CIT) in Mangaluru, located in Attavar in the City, and merge it with IT-Office based in Panjim, the capital city of Goa has come under strong opposition in the Coastal districts of Karnataka State that comprises its jurisdiction. The Chamber of Commerce and Industry in Mangaluru has sent a memorandum to the Chairman of Central Board of Direct Taxes (CBDT), appealing to revoke the decision. It is learnt that District Minister In-Charge Kota Srinivas Poojary has also written a letter to Finance Minister of India Smt Nirmala Sitharam not to abolish the Mangaluru office.
The President of Kanara Chamber of Commerce and Industry (KCCI)-Mangaluru, Isaac Vas in his letter to Shri Pramod Chandra Mody, The Chairman, Central Board of Direct Taxes- New Delhi has stated, “Respected Sir,
Sub: Memorandum requesting to retain the Pr.CIT (Administration) office at Mangaluru, Karnataka.
ISAAC VAS-PRESIDENT OF KCCI, MANGALURU
Greetings to you from Kanara Chamber of Commerce & Industry, Mangaluru. The Kanara Chamber of Commerce & Industry (KCCI), Mangaluru is a District level Chamber. It is not for profit company and the apex body in the region which works along with the members for the empowerment and betterment of the business community and strives for the development of trade, commerce and industry, entrepreneurs. We wish to submit the following issues and suggestions for your kind considerations and favourable action: Brief background of the issue We have been informed that the office of the Pr.CIT, Mangaluru is abolished and merged with the office of Pr.CIT, Panaji”.
“As per our understanding CBDT has passed gazette notification but order in this regard is yet to be issued. The CIT/Pr.CIT office has been functioning in Mangaluru for more than two decades and sudden change will cause hardship to taxpayers in general. KCCI is hereby representing the business and trade of Dakshina Kannada district. We hereby submit this memorandum requesting to retain the office of Principal Commissioner of Income Tax (Administration) at Mangaluru, Dakshina Kannada. We list below for your perusal the advantages of retaining the office of Pr. CIT in Mangaluru against shifting the office to Panjim, Goa causing severe inconvenience to the people at large.
INCOME TAX OFFICE IN ATTAVAR- MANGALURU
1. Grievance Resolution of Large Tax-Payers: Mangaluru is the administrative headquarters of the Dakshina Kannada district, Karnataka and is a commercial, industrial, educational, healthcare and startup hub. This city’s International Airport is the second-largest airport in Karnataka. Mangaluru office of Income Tax Department located in Dakshina Kannada serves a huge number of Large taxpayers like Banks, Public Sector Companies, Mangalore Port, Educational Institutions, Manufacturing Companies, SEZ, IT Companies, private sector Companies, Firms, High net worth Individuals. The present office of Pr.CIT, Mangaluru has a major role in providing and connecting the taxpayers with the federal tax system of the Government. Grievance resolution would be very much faster and accessible for such taxpayers if we retain the office of Pr.CIT, Mangaluru. The Jurisdiction of the CIT/Pr.CIT office at Mangaluru covers a vast area from Sullia in Dakshina Kannada District and covers all coastal districts up to Karwar. So taxpayers in this huge area will be finding it difficult to take their matters of grievance to the proposed Panaji office at Goa.
2. Geographical Distance between office of Mangaluru, Karnataka and Proposed Panjim, Goa: Geographically, the distance between Mangaluru and Panjim, Goa is around 376 Kms. The accessibility of transportation facilities available for travelling to Panjim is either by train or by road. No direct flight facility is available from Mangaluru to Panjim. The travel by train takes a long time and we do not have direct trains from Mangaluru to Panjim. The Assessees and authorized representatives have to get down at Madgaon, Goa and then travel 36-40 Kms either by bus or private taxi to reach the destination of Panjim, Goa. This will create a lot of hassle in accessibility for the taxpayers as well as authorized representatives which might cause a hurdle in the smooth flow of the Federal system of taxation and it might be time-consuming too for personal representations. Compared to Panjim, Goa the city of Mangaluru is well connected by road, air, train and water. Mangaluru is the state’s only city to have all four modes of transport—air, road, rail and sea. Due to the distance between Mangaluru and Panaji, the cost of service of representation will also be higher.
INCOME TAX OFFICE IN PANJIM-GOA
3. Re-registration requirement under Sec 12AA, Approval under Section 10(23C) & Section 80G of IT Act, 1961 by trusts/Temples/Educational Institutions: Mangaluru is known for its rich culture and regional heritage giving birth to a huge number of religious temples and educational trusts. Finance Act, 2020 has a new regime for these institutions. According to that the registration/approval shall be given only for the limited period of 5 years. The new regime is also made applicable to the existing registered/approved institutions. These institutions have to approach Pr.CIT/CIT for the grant of re-registration. On receipt of the application for re-registration, the Pr.CIT/CIT is required to directly pass the order of registration without any detailed enquiry. The provision for detailed enquiries has been made only in respect of renewal of registration under the new law after the expiry of 5 years’ period and in the cases of conversion of provisional registration/approval (under new law) in full/final registration/approval. Considering the above provision, since the city of Mangaluru is a hub for such institutions registered under Sec 12A/10(23C)/80G of IT Act, 1961 retaining the office of Pr.CIT, Mangaluru will definitely give an edge for easy compliance in such cases.
4. Easy Approach to Mofussil areas in and around Dakshina Kannada: The Manglauru office of Income Tax Department serves mofussil areas in and around Dakshina Kannada for easy compliance which contributes to a higher rate of compliance with law even in rural areas. Mangaluru is the capital city of Dakshina Kannada and taxpayers residing in the mofussil areas like Sullia, Puttur, Bantwal etc approach this IT department office at Mangaluru for all the major Compliances. If the Pr.CIT, Mangaluru office is abolished and merged with Panjim, Goa office then even the taxpayers of these mofussil areas may have to approach Panjim, Goa office for all the major compliance which will be cumbersome and tedious process considering the geographical distance and accessibility of travel.
5. Issue of High Court Decisions when revision order under Sec 263/264 of IT Act is Passed: As per the provisions of Sec 263/264 of IT Act, 1961 the taxpayers have to approach the PR.CIT for any revision in the assessment order passed by the officer of Income Tax department. In this regard, while passing such revision petition order by the Pr.CIT, there are high chances that Pr.CIT, Panjim may not consider the decisions of the High Court of Karnataka since the jurisdiction of Pr.CIT extends to Karnataka and Goa. The taxpayers may have to be at loss in such cases wherein they are not given the benefit of decisions of the court of their respective state.
6. Educated and Tax Compliant Assessees: The majority of businesses in and around the areas of the district of Dakshina Kannada are very well educated and tax compliant. These taxpayers handle their tax issues on their own without any aid from authorized representatives or tax professionals. The office of Pr.CIT, Mangaluru has been an added advantage to these taxpayers who can easily negotiate for any tax compliance work. These categories of taxpayers may not be able to visit Panjim, Goa on a regular basis for sorting out the tax compliance-related issues which might affect the compliance level of the overall district in the long run.
7. Application for Condonation of delay under Sec 119(2)(b) of the IT Act,1961: The Compliance in respect of filing the return of income is the huge responsibility of the taxpayer and it requires the taxpayer to be well educated and aware about the provisions of ITR filing under the Income Tax Act,1961. However, due to the ignorance of the taxpayer and less awareness on the provisions of law the taxpayer might end up in not filing his return of income for claiming his rightful share of TDS deducted on the income earned by him. In such cases, the taxpayer has to approach the Pr.CIT office with an application for condonation of delay under Sec 119 of the IT Act,1961. Pr.CIT, Mangaluru office was easy to access for such compliance and it has served a large number of such condonation applications in the recent past re-assuring the confidence amongst the taxpayers about the transparent working of federal tax system of our country.
8. Stay petition for High Demand cases: The Ministry of Finance has brought in faceless assessment for all the assessment with effect from AY 2019-20. As such, the city of Mangaluru might see high demand assessments due to non-furnishing of proper information to the officer in charge of such assessment within the due time which might result in high demand assessment. In such cases, the taxpayer may have to approach the Pr.CIT office for availing the benefit of stay on recovery proceedings until the completion of proceedings with appellate authority. Approaching the Pr.CIT, Panjim, Goa office will make it difficult for such assesses on a regular basis for submissions and compliance in respect of stay petition. In many cases, the taxpayers with high tax demand during assessment may prefer to approach Pr.CIT for a stay of tax demand and in such cases the Pr.CIT may require a personal hearing. It will be difficult for taxpayers to travel to Panaji for a personal hearing in such cases.
9. Initiation of Prosecution, Proceedings and Compounding Matters: With the introduction of new faceless assessment scheme there may be an increase in initiation of prosecution in the initial year of introduction due to noncompliance with provisions. Such taxpayers may have to approach the Pr.CIT, Mangaluru for disposal of any compounding application to drop the initiation of prosecution under IT Act,1961. Abolishing PR.CIT, Mangaluru will bring in deep trouble for such assessee’s which makes it inconvenient for them to visit Panjim, Goa for such compliance on a regular basis.
10. Compliance with Vivad Se Vishwas Scheme: ‘No dispute but trust scheme-Vivad se Vishwas Scheme’ was introduced in the Budget 2020 to settle pending disputes relating to direct taxes. It is an attempt to release the funds blocked in appeals pending at various appellate forums. The determination of tax payable under Vivad Se Vishwas Scheme is vested with Pr CIT. There may be grievances of assessee’s due to error in determining the tax payable under the said scheme. If the taxpayers of our city has Pr CIT in Mangaluru then it would be convenient for such taxpayers to get the resolution from Pr CIT Mangaluru rather than travelling to Panjim, Goa which also contributes to the success of the proposed scheme. At present, due to non-availability of Pr.CIT at Mangaluru, many of the cases have not crossed Form 2 stage and the settlement of cases is becoming delayed.
11. Taxpayer Services Many of the important services like PAN Transfer, Jurisdiction transfer for assesses, out-reach programmes by Income Tax Department can be better co-ordinated with the office of Pr.PCIT at Mangaluru. The Tax collection of Mangaluru Charge is higher when it is compared to many other cities having Pr CIT Charge. Further, power to waive of Interest under Sec 220(2) is vested with Pr CIT and local high-ranking office would be essential in these matters to understand the ground reality of eligible cases. Significant powers are also vested with PCIT with regard to waiver of interest u/s 234 which can be used in genuine and deserving cases by understanding the ground situation. In spite, our tax system is moving towards faceless assessments and proceedings we the taxpayers and authorized representatives of city of Mangaluru appreciate the role of Pr CIT and importance of existence of Pr CIT in Mangaluru.
As listed down above, abolition of office of Pr CIT at Mangaluru will cause the greatest disadvantage to the taxpayers of the district and it will lead to heavy inconveniences to all the taxpayers and tax professionals at large. The absence of Pr CIT office will be a huge setback for the development of the City of Mangaluru which has set its path on the right track now aiming at the bright future for the residents of the district. The Mangaluru Pr.CIT office covering D.K District, Udupi and Uttara Kannada District has been the second-highest tax collection office after Bengaluru in the state of Karnataka. The present infrastructure at Mangaluru has been excellent with its own building and sufficient area. These points justify the continuity of Pr.CIT office at Mangaluru for the benefit of taxpayers and for increasing the tax collections also.
We hereby submit our memorandum requesting you to review the order of abolition of office of Pr CIT at Mangaluru proposing to merge it with Panjim, Goa. We request you to kindly consider our memorandum and contribute to the development of our beautiful and tax compliant, the city of Mangaluru.
Thanking you, Yours faithfully, Isaac Vas-President-KCCI, Mangaluru
Copy of the memorandum has also been sent to: Smt Nirmala Sitharaman, Honourable Finance Minister of India; D V Sadananda Gowda, Honourable Union Minister of Statistics and Programme Implementation; Nalin Kumar Kateel, Honourable MP, Dakshina Kannada Constituency; Mrs Shobha M Karandlaje, Honourable MP, Udupi-Chikkamagaluru Constituency; Ananth Kumar Hegde, Honourable MP, Uttara Kannada Constituency; Kota Srinivas Poojary, Dakshina Kannada District Incharge; Principal Chief Commissioner of Income Tax, Karnataka and Goa, Bengaluru; and Principal Commissioner of Income Tax, Panaji.
