The Central Board of Direct Taxes (CBDT) has initiated an inquiry into alleged harassment by a senior income-tax (I-T) official in the Café Coffee Day (CCD) case.
CCD founder V G Siddhartha had, in his purported suicide note, alleged harassment by tax officials. He went missing on July 29, and his body was found two days later.
Sources said the CBDT has sought explanation from B R Balakrishnan, former director-general of I-T (investigation wing) and former principal chief commissioner of I-T for Karnataka and Goa, who had ordered attachment of CDEL holding company Coffee Day Enterprises ( CDEL) shares when he was in charge of the Bengaluru region. He retired last month.
All information is being gathered regarding the allegations made by Siddhartha, said sources.
An email sent to the CBDT office did not elicit any response. A text to Balakrishanan also remained unanswered.
A source privy to the development said the CBDT has been pitching for a non-adversarial regime, to maximise revenue collection but with impeccable and friendly conduct by officials. He added the CBDT, in its annual action plan, is trying to reach out to taxpayers and has directed officials to engage citizens.
“Taxpayer outreach programme shall be conducted so that every range head conducts interactive sessions to educate taxpayers on specific tax provisions and initiatives taken by the tax department. This is a critically important area for achieving the objectives of a fair and transparent administration and high standards of taxpayer service, which ultimately translates into higher levels of voluntary compliance,” said the CBDT action plan for 2019-20.
The note allegedly written by Siddhartha had mentioned the attachment of Coffee Day shares by the I-T department. But, the tax department had issued a statement doubting its authenticity and claiming the signature did not match Siddhartha’s as available in his annual reports.
According to the tax department statement, while its officials were conducting searches on a prominent political leader, now in the Opposition in Karnataka, they allegedly stumbled upon transactions done by CDEL in a concealed manner. Searches were then carried out at the residence and offices of Siddhartha and Coffee Day Enterprises on September 21, 2017.
The tax department said Siddhartha had admitted to unaccounted income in a sworn statement. “In the search action, after considering the evidence gathered by the department, Siddhartha admitted the unaccounted income of Rs 362.11 crore and Rs 118.02 crore, in the hands of Siddhartha and Coffee Day Enterprises, respectively, in the sworn statement,” it said. According to it, estimated tax liability with interest along with the maximum penalty on this would be about Rs 447.47 crore on Siddhartha and Rs 188.69 crore on his company.