Tuesday, June 26, 2018

CBDT wrong on MP assets – Verification reports by Income Tax authorities must be made public

Financial Express: New Delhi: Tuesday, June 26, 2018.
Though the convictions based on them have been few and far between, information about the change in the assets of MPs/MLAs is an important tool when it comes to keeping tabs on the actions of the political class. Such information is available to the public every five years, when assets-disclosures are required to be filed on affidavit prior to fighting an election even earlier, if the elections are held mid-term. The problem, however, is that, by and large, there is not that much the lay citizen can do with this. You can be horrified by the, say, 200% increase in the assets of your local MP over the past five years, but you have no way of knowing if this is proof enough of his/her accepting bribes. Several high-profile politicians, for instance, have explained the increase in the assets away by saying they got birthday presents from their supporters; others have declared a huge jump in agricultural income that, as per the law, does not have to be declared to the tax authorities.
In 2013, however, as per a report in The Indian Express, the Election Commission (EC) decided to lend a helping hand. It asked the Central Board of Direct Taxes (CBDT) to start scrutinising election affidavits, to verify if the assets declared matched the incomes declared by these candidates in the period since the last affidavit. Not all affidavits were to be scrutinised, just those ones where the increase in assets seemed unreasonable or where the assets were sizeable, but no PAN number was declared. In response to a PIL in the Supreme Court last year, the CBDT said it was investigating the assets of seven incumbent Lok Sabha MPs as well as 257 MLAs the PIL was filed by an NGO on grounds that the assets of various MPs and MLAs had grown substantially between the polls. While the EC feels these investigation reports are public information as they pertain to the veracity of the information in the affidavits that are made public the CBDT is of the view that these reports cannot be made public under the Income Tax Act where information about investigations cannot be made public; indeed, the Directorate General of Income Tax, the entity that conducts the investigations, is not covered by the Right to Information (RTI) Act. While the CBDT is undoubtedly correct in arguing that information on assessees is protected under the income tax law, an exception has already been carved out in the case of MLAs/MPs no one else has to, by law, make their assets public, but MPs/MLAs have to. As such, the CBDT reports are merely an addition to the election affidavits, a means to know whether the affidavits are accurate or not. The investigation reports must be made public.