BENGALURU: In his last purported letter, which came to light after he went missing on July 29, late founder of Cafe Coffee Day VG Siddhartha had alleged harassment at the hands of a “former DG of Income Tax”.
Following the tragic incident of his alleged suicide, Income-Tax authorities have come under attack for indulging in “tax terrorism”.
The New Indian Express spoke to former DGIT and Principal Chief Commissioner of Income Tax BR Balakrishnan, during whose tenure the Income-Tax department had taken action against Siddhartha and CCD for alleged tax violations.
“The circumstances surrounding Siddhartha’s demise are sad, unfortunate and intriguing. He had sold a small part of his assets for Rs 3,200 crore and is personally well-connected. There was no way that he could have been treated unjustly.
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There were largely expected tax demands on the basis of available evidence.
"Taking steps to protect public revenue is the responsibility of any tax administrator. The department had acceded to his request and released Mindtree shares, which he proceeded to sell, and realise a very large amount of money. The search happened two years ago, and the share attachment was done six months ago."
"The purported suicide note, which curiously absolved his auditors, went viral on social media within a few hours of his disappearance. There should be a thorough investigation in the incident, along with a forensic audit of his cash flow. Where did all those loans that were raised go?” questioned Balakrishnan.
The former I-T chief rued the fact that the dialogue on tax reforms was getting “derailed” by the use of “emotionally loaded” words like “angel tax” and “tax terrorism”.
“The enforcement agencies are duty-bound to unearth tax evasion and fraud. The burden on honest taxpayers goes up if someone gets away by not paying tax. Cases like the I Monetary Advisory (IMA) financial fraud can destroy thousands of lives. Any complex, modern society needs strict vigilance. Attacking the regulators with a view to demoralising them would involve a huge cost to society at large. Income-tax searches are an evidence-gathering exercise. Every step thereafter, from assessment to penalty and prosecution, is a judicial /quasi-judicial process, where the taxpayer gets ample opportunity to present his case,” he said.
Denying that there was any coercion from tax authorities, or “tax terrorism” against Siddhartha or any taxpayer, Balakrishnan said that he had not seen a “single case of actual overreach or unacceptable behaviour by tax officials. The object of an I-T search is, by definition, a rich and powerful person. S/he is hardly likely to accept harsh treatment mutely. Any concrete instance of unacceptable behaviour should be brought up and highlighted, but let us not demoralise our investigators who are doing a difficult job in stressful situations,” he added.
Balakrishnan was accused of selectively going after lawmakers of the Congress and JDS for alleged tax violations when he was the DGIT, Karnataka & Goa.
He countered the charges of political partisanship in Karnataka and said that he had worked without any bias.
“In the course of expenditure monitoring, the DGIT has covered the entire length of the political spectrum. The Election Commission of India, or any other body, can seek details under some statutory provisions,” he said.
Speaking about angel tax, the former DGIT said that provisions for taxing unjustified premia on share capital was brought in by Parliament in a particular background of such premia being used to launder money.
“There certainly can be further reforms but the use of loaded words like angel tax and tax terrorism are meant to derail a meaningful dialogue on tax reforms,” he concluded.
Twitterati thank VGS
BENGALURU: People on Twitter recalled fond memories and thanked deceased VG Siddhartha for starting the CCD chain, giving the aspiring middle class a safe space to spend time with loved ones.
Nandita Iyer, an author from Mumbai, recalled an incident back in 2010 which really stood out for her.
She wrote, “I was travelling with my toddler son. Had forgotten to carry milk. I asked CCD to fill a bottle for me and charge me for 2 coffees. They refused to charge me. RIP VG Siddhartha, your brand will live long.”