Indian Revenue Service

Indian Revenue Service (Income Tax)

Direct tax in the form of an income tax was introduced by Sir James Wilson in India in 1860 to overcome the difficulties created by the Indian Rebellion of 1857.^[12] The organisational history of the Income-tax Department, however, starts in the year 1922, when the Income-tax Act^[4], 1922 gave, for the first time, a specific nomenclature to various Income-tax authorities. In 1924, the Central Board of Revenue Act constituted a Central Board of Revenue – the statutory body with functional responsibilities for administering the Income Tax Act.

Commissioners of income tax were appointed for each province, and assistant commissioners and tax officers were placed under their control.^[13] Officers from the Imperial Civil Services (ICS) manned top posts and the lower echelons were filled through promotions from the ranks. The Income Tax Service was established in 1944 and was subsequently re-constituted as the Indian Revenue Service (Income Tax) in 1953.

In 1963, given the increasingly complex roles and responsibilities of administering direct tax in India, the Central Board of Direct Taxes was constituted as a statutory body under the Central Board of Revenue Act, 1963.^[13]

Indian Revenue Service (Customs and Central Excise)

With the passing of the Government of India Act, 1919 the civil services—under the oversight of the Secretary of State for India—were split into two arms, the All India Services, and the Central Services.^[14] Apart from the Central Secretariat, the more important of these latter were the Railway Services, the Indian Posts and Telegraph Service, and the Imperial Customs Service.^[15] After Independence, the Imperial Customs Service was reconstituted as the Indian Revenue Service (Customs and Central Excise) in 1953.

The nature of the service underwent a transformational change with the enactment of the One Hundred and First Amendment of the Constitution of India, which overhauled the administration of indirect taxation in India with the introduction of the Goods and Services Tax (GST). With the subsumption of several indirect taxes and levies, including central excise duty and service tax, under the GST, the nomenclature was updated to reflect the changed structure of taxation from IRS (Customs and Central Excise) to IRS (Customs and Indirect Taxes).

National Academy of Direct Taxes

Sixteen months of Induction Training is conducted for the directly recruited officers of IRS(IT) at NADT each year. The training is designed into two modules to enable the Officer Trainees to acquire the knowledge and skills they need to function effectively and efficiently as tax administrators. In particular, training prepares OTs to deliver quality taxpayer services, detect and penalize non-compliance, and understand the macroeconomic, taxation, and fiscal policy of the Government of India to maximize revenue.^[20]

National Academy of Customs, Indirect Taxes, and Narcotics

This involves very dynamic training in specialised matters of conventional tax administration— be it direct or indirect–along with unarmed combat, weapons, and explosives. Additionally, IRS officers undergo extensive training with the Army and the National Police Academy, and many other prestigious institutes of the country so that they are better prepared to excel in their multifaceted role.^{[citation needed]} NADT and NACIN both have signed a memorandum of understanding with the National Law School of India University in Bengaluru to award postgraduate diplomas in business laws to the officer trainees. Recently, Finance Ministry has approved the exchange of officer trainees to various countries across the world such as the Netherlands, Belgium, Switzerland, France, Australia, Malaysia, United States of America, Brazil, South Africa and OECD Nations, for increasing exposure to the future administrators.^{[citation needed]}

There are various mid-career training programmes (MCTP) for IRS officers to keep them abreast of the latest developments in the areas of governance, particularly taxation, finance and management. These include advanced mid-career training (AMCTP), which is conducted in 3 phases. Phase I is for joint and additional commissioners, Phase II is for commissioners and principal commissioners, and Phase III is for chief commissioners and principal chief commissioners. The AMCTP generally consists of a 3-week domestic module held at premier management institutes in the country followed by a 2-week international component at internationally acclaimed universities, depending on their areas of expertise.^{[citation needed]}

IRS (Customs)

IRS (Income Tax)

Corruption

In 2015, it was reported that as many as 108 IRS officers were under probe by the CBI for their alleged involvement in corruption.^[28] From May 2009 to May 2010, the CBI had sought sanction for prosecution of 102 IRS officials posted in different parts of the country in connection with corruption cases.^[29]

In 2016, the Ministry of Finance, dismissed 72 and prematurely retired another 33 Indian Revenue Service officers for non-performance and on disciplinary grounds.^[30][31] In 2019, Government of India dismissed 12 (IRS IT) and 15 (IRS Customs and Central Excise) officers for corruption and bribery charges.^[32][33]

The IRS officials top the Central Bureau of Investigation’s list of most corrupt bureaucrats.^[34][35] In one case, a 1992 batch IRS officer was arrested for accepting a bribe of ₹2 crore in Mumbai.^[36] Recently, in another case, some IRS officials were found to help certain companies evade payment of Service tax and related penalties of the order of ₹1 crore.^[37] Also CBI raided premises of an income tax officer for demanding Bribe to the tune of ₹60 crore for covering up Stock Guru Scam.^[38]

Murder of many officers

Even though IRS officers have to deal with sensitive postings in their career they are not provided adequate security. Many IRS officers in the departments of customs and income tax have been assassinated in the course of their investigations.^[39]

Recent initiatives

Many new initiatives were taken by the Indian Revenue Service members to curb corruption in their respective departments and make the system more efficient and responsive to the needs of the taxpayers. Use of Technology widely reduced the scope for the abuse of power. Refund Banker scheme introduced in 2007 eliminated the scope for corruption in the Refunds of Excessive Tax collected by the department.^[40] Introduction of E-filing of Taxes^[41] and effective implementation of Permanent Account Number (PAN) are some revolutionary steps that reduced the scope for corruption at all levels while improving the efficiency of the whole system. Use of Centralised Processing Center setup in 2010 at Bangalore of the Income Tax Department reduced unnecessary delays in processing returns.^[42] These computerization initiatives have freed up the human resources in the department which are largely responsible for higher revenue collections.

Income Tax Ombudsmen was created in 2006 and is functional in 12 cities to look into tax-related grievances of the public.^[43] Department is also gearing to improve its tax payer's services with Sevottam Scheme. Under this scheme, various initiatives such as Citizen Charter, Ayakar Seva Kendra (ASK), which is a single Window mechanism for implementing Sevottam through the delivery of these services within the timelines promised in the Citizen's Charter, were launched.^[44] Aaykar Sampark Kendra consists of one National Call Centre and 4 regional Call Centres to aid the taxpayer were inaugurated by the Finance Minister.^[45]

IRS officers handling sensitive postings are issued a Glock Model 22 pistol or a Glock 23 in .40 S&W caliber.^[46]

An IRS officer could rise up to the Apex Scale (₹2,50,000 fixed plus allowances) at the post of principal chief commissioner of income tax in the ITD. At the apex level, he can also get selected as a Member or Chairperson of the CBDT. The intermediate grades in this career progression are deputy commissioner, joint commissioner, additional commissioner, commissioner, principal commissioner and chief commissioner of income tax. An IRS officer is also eligible to be selected as a member of the Income Tax Appellate Tribunal, Authority for Advance Ruling, Income Tax Settlement Commission and Income Tax Ombudsman as per the prescribed eligibility criteria. Cadre Review has been cleared in the Income Tax Department creating 20,751 additional posts to help generate additional revenue of ₹250 billion (equivalent to ₹420 billion or US$5.1 billion in 2023) crore annually.^[26]