Meeting between central IT officials and business community ends in deadlock

AMEET OBEROI
GANGTOK, 22 Nov: The Commissioner of Income Tax, Siliguri, Subroto Sarkar, and the Joint Commissioner, PD Karwa, met with members of the business community of Sikkim to discuss issues and problems relating to the non-compliance of the community in filing their tax returns. The meeting, held today at Hotel Tashi Delek, ended in a deadlock. This, primarily because the sides are divergent agendas – the IT officials were here to convince the old settlers to file their Income Tax returns while the community keen on convincing the officials and the IT Office to include them in the exempted list at par with the Sikkim Subjects.
Addressing the huge gathering, the Commissioner stated that after having joined the office just about a month ago he has come to Gangtok to discuss the problems being faced, solve them and to advice the business community that as per law, they had to file their taxes if they were earning taxable incomes.
“The issue of Income Tax is at a very nascent state in Sikkim and there are certain problems, but as per the law [Clause 26AAA of the Finance Act, 2008], people [mostly members of the old business community] not having Sikkim Subject Certificates or Certificates of Identification in the state have to pay central taxes”, he said.
“The 400 families not of Sikkimese origin staying in Sikkim, according to the law, must file their returns as the white paper has already been signed between the state government and the central government regarding the issue and all who are not of Sikkimese origin have been asked to file their returns from the year 2007-08, but this is not being done,” he added.
On the demand that the old settlers be exempted at par with Sikkim Subjects, he said, “We are not the law making authority, but just the law implementing agency. The demand is beyond our purview to clear”. He went to urge the business community to first start paying their taxes, adding that only then could things start moving forward in the right direction.
The Sikkim Chamber of Commerce, in turn, submitted a memorandum to the Commissioner highlighting that they have urged and requested that the 400 families who have been left out from the purview of Income Tax exemption and all matters pertaining to Central Income Tax for pre merger business communities [person residing in Sikkim prior to 26 April, 1975] be exempted from the need to file IT returns until the matter and demands of the affected citizens to various forums is resolved.
The meeting with central Income Tax officials and the business community was to push their case seeking Income Tax exemption at par with other Sikkimese who were granted exemption by the centre in the year 2008. Ever since the Sikkim Subject and Certificate of Identification holders in the state were granted exemption from paying direct income Tax, the Old Settlers [mostly members of the old business community] have been petitioning both the state and central governments to be equated with the Subject/ CoI holders in Sikkim and given the same benefit.
Their main ground is that their petitions for IT exemptions are in process of being considered by the central government. The old settlers have been pushing to be granted exemption to end discrimination and their primary demand is that those having settled in Sikkim before 1975 be given exemption. As for those having settled here post 1975, they have been demanding that the process of filing IT returns, being new to Sikkim, be explained to them for which some kind of workshop or seminar be organized by the IT office.
SK Sarda [president, Old Settlers Association of Sikkim] also handed over a petition to the Commissioner, wherein the problems being faced by the old settlers in the state were highlighted. He further urged that the problems faced be conveyed to higher authorities of the Central Board Direct Taxes [CBDT] and be resolved.
Mr. Sarda, in his address, highlighted that the SCC had, on several past occasions, “impressed upon the   Central Board of Direct Taxes on the need of such a meet”.
He went on to explain that, “There appears to have been some inadvertent omissions while defining the word ‘Sikkimese’ in reference to Clause 26AAA which does not cover all those who were entitled to income tax exemption. The old settlers have been permanently residing in Sikkim since last 100 to 130 years and unfortunately left out by non application of principles of equality and further without having been heard on merit. The discrepancy by non inclusion is being repeatedly brought to the notice of Sikkim Government and Union Government.”
Similarly, Prem Goyal [president, Sikkim Nagrik Sanghars Samiti] also placed a petition with the Commissioner. Speaking on his petition, he stated that the law passed in 1989 did not discriminate between the business community and other residents of Sikkim, but the rule passed in 2008 discriminates between the ‘non Sikkimese’ business community and Sikkimese and this has turned them into second class citizens here.
“There is a lot going on regarding the issue so until the issue is resolved the filing of Income Tax in Sikkim should be kept on hold by the IT department because forcefully implementing the law in the state could lead to tension,” he stated.
Meanwhile, the business community has resolved not to pay their returns until the issue is solved.

Central IT officials to review exemption demand of Old Settlers

GANGTOK, 20 Nov: The old settlers community of Sikkim is gearing up for another round of negotiations with central Income Tax officials to push their case seeking Income Tax exemption at par with other Sikkimese who were granted exemption by the centre in the year 2008. Ever since the Sikkim Subject and Certificate of Identification holders in the state were granted exemption from paying direct income Tax, the Old Settlers [mostly members of the old business community] have been petitioning both the state and central governments to be equated with the Subject/ CoI holders in Sikkim and given the same benefit.
A senior Income Tax official along with officials from the Siliguri IT circle is reportedly scheduled to arrive in Gangtok on 22 November for a meeting with the community members. The agenda is primarily to understand the demand seeking IT exemption as put forward by the old settlers of the state. While their demand has already been explained often and extensively to central officials, the change of guard following transfer of officials especially in the IT department and in the Siliguri IT circle has led to the demand having to be explained again.
On the other hand, it is also informed that the IT officials will also be here with the aim to look at implementing Clause 26AAA of the Finance Act, 2008 in the state whereby those without Sikkim Subject Certificates or Certificates of Identification are liable to pay central income tax. Those falling under the liability aspect of this clause are largely members of the business community and though the Income Tax office here in Gangtok has been repeatedly sending them notices to file their IT returns, the community has remained adamant on their stand claiming exemption.
This has created problems for the income tax officers as they are directed by New Delhi to meet targets [on IT collection]. In other words there is a particular amount set as target which the IT office here has to collect.
Their main ground of ignoring the notices is that their petitions for IT exemptions are in process of being considered by the central government. The old settlers have been pushing to be granted exemption to end discrimination and their primary demand is that those having settled in Sikkim before 1975 be given exemption. As for those having settled here post 1975, they have been demanding that the process of filing IT returns, being new to Sikkim, be explained to them for which some kind of workshop or seminar be organized by the IT office.

Sikkim applicants now required to approach Matigara IT office for IT Exemption Certificates VISHNU NEOPANEY GANGTOK, 27 May: Residents of Sikkim who are exempted under the Income Tax Act, Section 27 AAA, will have to henceforth approach the Tax Deduction at Source (TDR) Wing of the Matigara Zonal Income Tax office in Siliguri for IT Exemption Certificates. The Regional Office of the IT Department at Kolkata, in its meeting with regional heads and Officers In-charge of different districts [Malda, Siliguri, Jalpaiguri, Darjeeling, Kalimpong] including Sikkim, on 14 May directed the Gangtok office not to issue any more IT Exemption Certificates since this power did not fall in its jurisdiction. Till now, the Aayakar Bhawan at Gangtok, established in 2008, had been issuing the IT exemption certificates. The 14 May meeting resolved that the Gangtok office is mandated to handle only the revenue section for IT assessment. Other tasks like TDS directions and Tax refunds are not delegated to it. So far, because Direct Tax laws were new to Sikkim, the Gangtok IT office was also issuing IT exemption certificates [to Sikkim Subjects and their descendents], for the convenience of the people here, on the verbal direction of senior officials. Direct Tax Laws came into force in Sikkim on 21 June, 2008 and the Income Tax Department is represented here by an Assistant Income Tax Officer. The Ministry of Finance, Tax Department, has set up an office here to manage IT returns in Sikkim. Sikkim is in a transitional phase in terms of Direct Taxes and the Ministry of Finance and Regional IT Office at Kolkata have not yet felt it necessary to set up the other wings in Sikkim. As a result, a large number of people are still unaware of Direct Tax norms like filing of returns, claims and TDS or the importance of PAN and TIN numbers. The Gangtok office has already begun directing applicants the TDS wing of the Zonal Matigara Office, Siliguri for IT exemption certificates. IT officials in Siliguri informed NOW! over the phone that after receiving the exemption application from applicants, the Zonal Office will forward the applications for Regional Office verification and after receiving the IT clearance from Gangtok office, the exemption will be granted by the Regional Office if found appropriate. What is required now for the convenience of the people is for the State Government to approach the Ministry of Finance seeking establishment of other wings of the IT Department in Sikkim.

VISHNU NEOPANEY
GANGTOK, 27 May: Residents of Sikkim who are exempted under the Income Tax Act, Section 27 AAA, will have to henceforth approach the Tax Deduction at Source (TDR) Wing of the Matigara Zonal Income Tax office in Siliguri for IT Exemption Certificates.
The Regional Office of the IT Department at Kolkata, in its meeting with regional heads and Officers In-charge of different districts [Malda, Siliguri, Jalpaiguri, Darjeeling, Kalimpong] including Sikkim, on 14 May directed the Gangtok office not to issue any more IT Exemption Certificates since this power did not fall in its jurisdiction.
Till now, the Aayakar Bhawan at Gangtok, established in 2008, had been issuing the IT exemption certificates. The 14 May meeting resolved that the Gangtok office is mandated to handle only the revenue section for IT assessment. Other tasks like TDS directions and Tax refunds are not delegated to it. So far, because Direct Tax laws were new to Sikkim, the Gangtok IT office was also issuing IT exemption certificates [to Sikkim Subjects and their descendents], for the convenience of the people here, on the verbal direction of senior officials.
Direct Tax Laws came into force in Sikkim on 21 June, 2008 and the Income Tax Department is represented here by an Assistant Income Tax Officer. The Ministry of Finance, Tax Department, has set up an office here to manage IT returns in Sikkim.
Sikkim is in a transitional phase in terms of Direct Taxes and the Ministry of Finance and Regional IT Office at Kolkata have not yet felt it necessary to set up the other wings in Sikkim. As a result, a large number of people are still unaware of Direct Tax norms like filing of returns, claims and TDS or the importance of PAN and TIN numbers.
The Gangtok office has already begun directing applicants the TDS wing of the Zonal Matigara Office, Siliguri for IT exemption certificates.
IT officials in Siliguri informed NOW! over the phone that after receiving the exemption application from applicants, the Zonal Office will forward the applications for Regional Office verification and after receiving the IT clearance from Gangtok office, the exemption will be granted by the Regional Office if found appropriate. What is required now for the convenience of the people is for the State Government to approach the Ministry of Finance seeking establishment of other wings of the IT Department in Sikkim.

Central Board of Direct Taxes meets Old Settlers to discuss IT exemption demand

GANGTOK, 17 Feb: Income Tax officials and members of the old business community of Sikkim sat in a meeting at Siliguri on 16 February, as earlier reported in NOW! The meeting was held under the directions of the Central Board of Direct Taxes which had issued directions to the Income Tax authorities at Siliguri and Gangtok to conduct discussions with concerned stakeholders. This was done as there has been mounting pressure on both the central government as well as the Income Tax authorities to take a decision on the demand of left our “old settlers” to be included in the scheme of exemption from paying central income tax.
The Central Board of Direct Taxes decided to hold consultations with all stakeholders and yesterday’s meeting was attended by officials of the Income Tax office, Siliguri as well as Gangtok along with around 20-25 members of the old settlers’ community of Sikkim. Those participating informed that the meeting went well, with the final response of the income tax authorities seemingly favourable. It is informed that at the end of the meeting the authorities assured to put up a positive report on the deliberations and demands of the community to the central government.
However, the near 3-hour long meeting was not all jovial as there were sensitive issues raised. The Income Tax authorities wanted to know why there was this demand for exemption from paying central IT from the old settlers and also demanded the legal basis for this demand. On the other hand, the authorities also wanted to know what the fallouts would be should they acquiesce to the demand for IT exemption as well the reaction should this demand be refused.
As per information received, those representing the old settlers’ at the meeting raised the issue of discrimination with the inclusion of clause 26AAA in section 10 of the IT Act, 1961 as amended in 2008. Some members also said that they did not object to paying of income tax but to the discrimination and division created in the society with this provision of clause 26AAA.
On the other hand some members of the old settlers’ community, it is informed, also threatened to undertake dharnas should their demands be ignored. Some also submitted their representations in writing to the income tax officials. The tax authorities, it is informed, seemed satisfied with the representations made and discussions on various related issues.
Of late, there have been a number of representations made to the central government by the old settlers’ community of Sikkim. Not just the representations made by the organisations but also the letters and other communiqués of the state government to the centre on the issue. The latest was the letter of the Chief Minister to Finance Minister, Pranab Mukherjee seeking that all proceedings of the Income Tax authorities be kept in abeyance in light of the matter of exempting the old business community being under consideration.

Nagarik Suraksha Sangh pursues IT exemption for Old Settlers

GANTOK, 03 Nov:Prem Goyal, President, Nagarik Suraksha Sangh has written to  the Chairman and all members of the committee formed to analyze and make reccomendations to the government for Income Tax Exemption.

IT Office serves ‘final notice’ to Old Settlers to settle Income Tax dues

JOINT COMMITTEE OF STATE GOVT OFFICERS AND OLD SETTLERS TO TAKE UP MATTER WITH CENTREGANGTOK, 06 Sept: The Old Settlers’ Association has not given up on lobbying for Income Tax exemption, neither has the Income Tax Office given up on issuing notices to the “left-out” [from IT exemption] section, most of whom are members of the Association and others of the old business community here in the State seeking their statement of income for payment of Income Tax.
After issuing numerous notices, the Income Tax Office has now issued a final notice declaring that if those served with notices did not respond appropriately, the ITO will itself calculate their incomes and calculate the Income Tax to be appropriated.

CM tables Govt Resolution seeking Income Tax exemption for left-out communities

GANGTOK, 27 March: Communities residing in Sikkim, left-out from the Income Tax exemption accorded to the Sikkim Subjects, received a reiteration of the State Government’s commitment to lobby for similar exemption for them yesterday, with the Chief Minister bringing in Resolution No.2 of 2011 “Seeking exemption from payment of Income Tax under the Income Tax Act, 1961 for the left out categories of persons”. This Resolution, proposed by the Chief Minister, was passed unanimously by the Sikkim Legislative Assembly with MLAs Dorjee Namgyal [Gangtok], Madan Cintury [Zoom- Salghari], Sonam Gyatso Bhutia [Ralang-Barfung], and Binod Rai [Namchi-Singhithang] participating in the discussions.
This, it may be recalled is the second time that the present Legislative Assembly is passing such a Resolution, but as the Chief Minister explained, the last Resolution, brought and passed on 11 December 2009, was a Private Member’s Resolution, while this time, it was a Government Resolution, carrying that much more weight and significance.