For Anita Kapur, who took over as chairperson of the Central Board of Direct Taxes (CBDT) in November 2014, it was baptism by fire. The country's image as a business destination was taking a beating due to regulatory uncertainty and tax authorities' action against some big companies. Domestic taxpayers, too, were troubled by the excessive tax demands. The new government that took charge in May 2014 was keen to fulfil two of its big promises to voters -making tax administration non-adversarial and curbing black money. The CBDT needed deft handling for restoring the faith of investors/taxpayers. It also required bold measures to deter the delinquent. Kapur did both. "We focused on re-orienting our approach and making the life of taxpayers easier," she says.
Guided by the government's resolve to end regulatory uncertainty, Kapur and her team started taking measures to ensure that taxpayers did not face hassles and tax evaders did not get away. "We decided not to take up cases of small taxpayers for scrutiny. Processing was made faster and refunds issued as quickly as possible," she says.
The board also laid down non-discriminatory parameters for selection of scrutiny cases. It also started telling taxpayers the reasons their case had been selected for scrutiny. Kapur also told officials to "limit inquiries to issues that resulted in the scrutiny so that taxpayers are not harassed for issues not under scrutiny". It also shifted to email communication so that taxpayers did not have to visit the board's office for every small work.
The huge number of pending cases - at Commissioner of Income Tax (Appeal), Income Tax Appellate Tribunal, high courts and Supreme Court - in which around `8 lakh crore was locked up at the end of 2014/15, was another area that needed attention. So, besides increasing the monetary limits for filing appeals, the department overhauled the way tax officers pursued cases. "We decided that in cases where we have accepted the judgement of high courts and not gone to the Supreme Court, those rulings must be brought to the notice of assessing officers so that they do not file appeals in similar cases," she says. Also, in cases where there was no judgement but the department had a view, officers were told to follow that view.
"Frequent clarificatory circulars gave the much-needed confidence to taxpayers. Her working style reflected a proactive approach. She invited comments from stakeholders while introducing changes. Regular involvement with industry forums showed she preferred to have the taxpayer's perspective too," says Rakesh Nangia, Managing Partner, Nangia & Co, who interacted with Kapur in different capacities, including as Co-chairman, International Tax Committee, Assocham.
Also, to discourage wrong assessments, the board linked annual appraisals of officers to the quality of assessments instead of the number of assessments. Data show positive results. In 2015/16, the number of returns filed was 4.53 crore, compared with 3.7 crore in 2014/15.
Tax officials treat people as tax evaders, say most large taxpayers and tax consultants. Kapur tried to change this. "When I joined the service, we saw ourselves as law enforcers. That has changed. We are the facilitators too. The idea is still sinking in," she says. The message has gone to officials that taxpayers are our partners, she says. However, she insists that non-compliance must lead to legal consequences as otherwise "you will create a culture where compliant taxpayers feel cheated".
Did Kapur face any difficulty in making people change their approach and mindset? She says she had to be strict. "I get disappointed and angry when I see a person not performing up to his/her potential," she says.
Akhilesh Ranjan, Joint Secretary, CBDT, says Kapur, being technically competent, "respected good work and had no problems if things were done the right way".
Rising Through the Ranks
Kapur has been part of some big policy changes. She joined the revenue service in 1978 after her father's advice that India will not remain a closed economy for long and, therefore, she should join the revenue service as it will remain relevant even in an open economy.
"In those days, there was limited scope for careers. If you were good in studies, teachers would encourage you to become an engineer or a doctor, or join the services. Though I wanted to become a doctor, my parents were not in its favour," says Kapur, who completed her school and college education in Punjab. Though her parents backed her decision to have a career, they gave her just one chance to clear the civil services exam. She was the eldest of the four siblings and her father was to retire in 1976. There was family pressure that she must be married before her father's retirement.
After joining the tax department, where she assumed different roles, she had a brief stint with the capital market regulator in the early 90s when the economy was opening up and rules for financial markets were being rewritten.
"I was part of the team that conceptualised opening up of financial markets. I was also associated with the Narsimham Committee on banking reforms," she says. She was also part of the group responsible for drafting answers to Parliamentary queries on the Harshad Mehta scam. These stints taught her the importance of good regulators. She joined the CBDT in 2012. She retired in November 2015.
What Kept Her Going
One quality that helped her do well is inquisitiveness. "I want to know details of everything. Even today, I read about policies, other developments. I may not have any contribution to make but I still learn," she says. This is helping her do well in her new role as member of the Competition Appellate Tribunal or COMPAT. She joined in May this year. "COMPAT is a crucial institution as far as the economy of the country is concerned. I feel it is related to what I have done all my life," says Kapur.
Kapur is one of the three members who hear appeals against orders of the Competition Commission of India, or CCI, the country's anti-trust regulator. Given that CCI's role is to check misuse of dominance by any player in the market, the role of the appellate tribunal is quite significant.
Though competition laws may be a completely new area for Kapur, she probably knows well how an appellate tribunal functions as she used to represent the tax department in cases before the Income Tax Appellate Tribunal in her initial years.
Her philosophy in life is: Not everyone in life has been able to do what he/she wanted to do. "So, you must always try to do the job in hand with sincerity and humility." ~
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