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New Delhi: The income tax department Monday issued charge sheets against three senior officers of the Indian Revenue Service (IRS) under the service rules and divested them of their responsibilities.

The officers — Prashant Bhushan, Prakash Dubey and Sanjay Bahadur — were pulled up for their alleged role in the formulation of and making public a report that advocated measures like a super rich tax, Covid-19 cess and reintroduction of wealth tax and inheritance tax.

Bhushan is the principal commissioner of income tax, Delhi, Dubey is the director of department of personnel and training, and Bahadur is the principal director of investigations in the north east region for Central Board of Direct Taxes (CBDT).

A group of 50 IRS officers had submitted suggestions to revive the economy after Covid-19 as a part of a policy paper titled ‘Fiscal Options & Response to Covid-19 Epidemic (FORCE)’, which was announced by the IRS Association on Twitter on 25 April.

Bhushan and Dubey are senior office bearers of the IRS Association. While Bhushan is the general secretary, Dubey is a joint secretary.

https://twitter.com/IRSAssociation/status/1254082969083363330?s=19

The officers have been given 15 days to submit a written defence statement, according to the order issued, which ThePrint has accessed.

Also read: IRS officers’ tips to revive economy and how radical ideas of 1970s are lurking in the air

The FORCE report

Among the policy suggestions made in the FORCE report was the raising of income tax rates to 40 per cent for those earning over Rs 1 crore a year or re-introducing the wealth tax for incomes above Rs 5 crore.

Another measure suggested was introducing a one-time Covid-19 cess of 4 per cent on taxable income of over Rs 10 lakh, which is estimated to garner around Rs 18,000 crore in revenue.

The paper also suggested increasing the surcharge on foreign companies having a branch office or permanent establishment in India. Further, it proposed an inheritance tax, a levy that was in force in India till 1985.

Fearing the impact of the report on markets and the overall investor sentiment, the government was quick to disown the report.

The tax department Sunday issued a statement that the views do not represent the views of the department or the government.

CBDT chargesheet

An official with the income tax department who did not wish to be identified said action was being taken against the three officers for misguiding the 50 officers of the IRS Association.

“CBDT has issued chargesheets to the three senior IRS officers for violation of CCS (Conduct) Rules, 1964 and has divested them of their current responsibilities,” said the official.

Instead of being sent to the government through official channels, the report was made public, creating panic and tax policy uncertainty in an already stressed economy, the official added.

The orders, issued in the name of the President of India, state that the officials guided the preparation of the paper without any authority. It added that the unauthorised release into the public domain created confusion about government policies which can have an adverse impact on the economy.

It further states that the unauthorised release and preparation of such a document for wide dissemination “amounts to criticism of government’s existing policies by senior tax officers thereby causing avoidable embarrassment to the government”.

Also read: IAS, IRS, IIS associations ask officers to contribute to PM CARES after Modi govt ‘nudge’

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