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Vol: 31  No: 01


01 August 1984

When Taxmen Tickle You

Dr. V. Gouri Shankar

“Milk is not obtained by drying up the cow; similarly from the country, fruits are obained by proper tapping and not by harassment.”

--Chanakya on Rajniti Shastra

On February 27, 1984, there was a reference in a leading economic journal to ‘budget humour’. The article on the subject ended with the statement “Jokes and taxes do not go well in a leap year. Hope it will be more of the former.” As it turned out, there was not much of either.
But it has been customary for every Finance Minister to coat his bitter proposals of taxation with the sugar of humour.
Evasion of Income Tax has been common in every country and in every age. Sri George Campbell, the Governor of West Bengal in his Report on Income Tax Administration (1870) had a humorous dig at evasion of tax by medical men and lawyers by saying, “There were no lawyers in the highest class while the next higher class included 58 ministers of religion, 17 legal practitioners and no medical men. I wonder whether religion was more lucrative than law.”
Justifying the increase in the rate of duty on cigarettes, Shri Y. B. Chavan stated in his budget speech, “There comes perhaps a time in the life of every smoker when the concern for his own health begins to outweigh the loyalty to an old and faithful companion.For those who cannot shake off their consuming passion, there is at least the consolation that the more taxes they pay, the more they serve the common cause. I am, therefore, fortified in my decision to increase once again the taxation on cigarettes by the thought that whichever way my smoking friends react, there would be a net gain to national welfare.”
Shri Morarji Desai, giving the reasons for withdrawing the spouse allowance, gave the following reasons:
“In a situation where both the husband and the wife are tax-payers in their own right, it would be improper for any outsider to decide as to who is dependent on whom. At present, we avoid this ticklish question by allowing both parties to claim a spouse allowance. This still leaves open the question as to who brings more tax benefit to the partnership through marriage. To eliminate this unintended strain on the relationship of marriage, I propose to provide that where both the husband and the wife have taxable incomes, the spouse allowance will be available to neither.”
Even the Hon Finance Minister, Pranab Mukherji, is not without his quota of humour in his budget speeches. Paying compliments to himself for exempting totally pressure cookers from excise duty, he said, “Housewives in India, as elsewhere, have been complaining for some time about the rise in their expenses.

As a measure of economising on their fuel bills without affecting the nutritional and, hopefully, the gastronomic value of what they cook, I propose to exempt totally pressure cookers from excise duties. They would now find someone else in their kitchens letting off steam.”
There have been occasions when official witnesses appearing before the Public Accounts Committees unwittingly made laughingstock of themselves. Once when Shri R. R. Morarka, Chairman of the P.A.C., voicing the concern of the public that there was a lot of petty corruption in the Income Tax Department, asked the official witness “Is that not so, Mr. .......” The official witness immediately retorted. “No, Sir. There is no petty corruption in my Department.”
There was an enterprising Chairman of the Board of Direct Taxes who somehow managed to get a copy of the questionnaire prepared by the Secretariat of the Committee and would come prepared with answers for all the questions seriatim. Finding that the answers come rather too fast, the Chairman of the Public Accounts Committee wanted to find out whether the official witness had any prior knowledge of the questions.
He, therefore, jumped over two questions and asked the third. The official witness speedily read out the answers for the first and second and when he was reading the wrong answers all in the Committee broke into laughter.
There was an Inspecting Assistant Commissioner of Income Tax who prided himself on his knowledge of shastras and particularly Manu’s Neeti Shastra. When an assessee in his charge was in arrears of tax, and had no property to be attached for tax dues, he issued the following order:
“According to Manu, wife is the property of the husband and, therefore, the I.T.O. should attach all property standing in her name as in law, it is the property of the husband.”
An Appellate Assistant Commissioner in an appeal filed by two famous film stars, allowed full relief from tax. A note was put up to the Commissioner suggesting that the A.A.C., while allowing the appeal, might have been influenced by factors other than the merits of the case, and therefore, an appeal should be preferred to the Appellate Tribunal. The Commissioner declined, observing, “Mr. (AAC) is fifty-four and beyond the age of temptations of the flesh. There is no allegation he got money.”

Bhavan's Journal

01 August 1984


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