Sir in certain situation like non filing of return, ceasing of documents showing tax evasion etc Officers have a right to assess the value of Tax evaded to the best of his judgment. This power is some times misused by the officers in punishing Businessmen whom they don’t like. Judgment of evaded tax should be based on evidence. Suppose in a raid they cease some documents proving 25% Tax evasions, let them calculate 25% extra Tax with retrospective effect for 3 or 5 years. If a party fail to submit return, let them calculate the average of submitted returns in that year. Instead of that they assume some amounts they like and impose a fine based on that. In one such occasion in Kerala, a party who used to submit an average return of 5 Lakhs per month failed to submit return in one month. The officer assessed an amount of 75 Lakhs Tax for that month and when protested went ahead with RR. Now the matter is pending before tribunal. This happens in IT also, I had observed an IT officer valuing a 486 Desktop PC (10 years before) for Rs: 50,000/-.
Sir can High Courts modify this power and impose some formula to calculate the evaded Tax in each occasion instead of the officer assessing according to his wish, without any control.
