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 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.

Central Board of Direct Taxes calls for Talks to discuss IT exemption related issues

REPRESENTATIVES OF OLD BUSINESS COMMUNITY ALSO INVITED 
GANGTOK, 13 Feb: With pressure mounting on both the central and state governments as well as on the Income Tax authorities to take a decision on the demand to be included in the scheme of exemption from paying central income tax by the old settlers of the state of Sikkim the Central Board of Direct Taxes has decided to hold consultations with all stakeholders.
The meeting, it is informed, has been scheduled for 14 February. It had actually been scheduled for 16 February but has been preponed by a couple of days it is informed. The meeting will be held at the Income Tax office, Siliguri.
Along with officials of the CBDT also present will be Commissioner, IT, Siliguri, Income Tax Officials of Gangtok office; interestingly, also called for the meetings are some of the prominent individuals of the Old Settlers’ Community who have also been called for the consultations and to present their brief.
The main agenda of the talks, as decided by the CBDT, is to ascertain the ground situation in Sikkim as far as the income tax assessments is concerned, the various issues involved in the implementation of the Income Tax Act, 1961 as amended in the year 2008 with the inclusion of Clause 26AAA in Section 10 of the Act, granting exemption to ‘locals’ as defined in the section and non exemption for other people including the Old Business community of Sikkim.
More importantly the talks, as informed, are to include discussions and consultations on the various representations made by the old settlers’ community to the union government including the Prime Minister, Home Minister and particularly the Finance Minister seeking exemption from paying central income tax at par with the Sikkimese population. The Old Settlers’ Association has been making repeated representations to the central ministers as well as officials to include them, about 400 families, in the exempted category. On the other hand the Nagarik Sangarsh Samiti led by Prem Goyal has also been making repeated and continuous representations and petitioning not just central leaders but Parliamentary Committees as well to examine their demand for equal status. All these are to come up for discussions tomorrow, it is informed.
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.
Besides, the CBDT officials will also discuss and anaylse the implications and fall outs of agreeing to and granting the demands put up by the associations for exemption.

Ahluwalia raises IT exemption issue in Parliament

GANGTOK, 13 Feb: The demand for equal status by the members of the old business community of the state has now echoed in the halls of Parliament as well with BJP Member of Parliament, SS Ahluwalia having taken up the issue and spoken on it in the Rajya Sabha. The MP from Jharkand, is informed to have spoken on the issue and in support of the demand for equal status as raised by Prem Goyal of the Nagarik Sangarsh Samiti in December, 2011. The NSS has been demanding equal status in all matters and issues for all those who have been residing in the state of Sikkim prior to April, 1975. The demand for income tax exemption is included in this larger and all encompassing demand for equal status.
It is reported that his in speech in the Upper House the BJP MP raised the issue of discrimination between Indian citizens whose names were registered in the Sikkim Subjects Register and the Indian citizens residing in Sikkim prior to 1975 but did not register themselves in the Register as that would tantamount to dual citizenship and violation of Indian law. Saying that the government had deprived all non Sikkimese from IT exemption he highlighted that this category had been making appeals for the end of this discrimination.
He appealed to the Finance Minister to withdraw the ‘injustice’ immediately and further highlighted that this community, which was small in number, are a part of Sikkim and proud Sikkimese and justice should be done to them.
The Union Finance Minister, Pranb Mukherjee replied that he had been receiving representations and that he was looking into it.
It may be mentioned here that this issue and demand of equal status for all those residing in Sikkim prior to April 1975, that is the Merger,  - including the Old Business Community - had been forwarded as a petition by the Prem Goyal led Nagarik Sangharsh Samiti to the Petitions’ Committee of the Rajya Sabha. This matter is under due consideration of the Committee and in fact the Committee was due to visit the state for a ‘public hearing ‘ in September 2011; this visit had to be re-scheduled due to the earthquake of 18 September.  The visit is pending and once the public hearing is conducted in Sikkim the Committee is expected to put up its final report.

LS Finance Committee petitioned to alter and amend definition of ‘Sikkimese’ for IT exemption and equal status in Direct Taxes Code Bill, 2010

GANGTOK, 08 Feb: While the Chief Minister and the state government of Sikkim are pursuing the matter of exemption from paying central income tax by the old settlers of the state members of the Old Business Community are pursuing the matter on their own as well. In fact members of this community have been directly petitioning the union government and central ministers for including them as well in the exempted category.
In the latest instance the president, Nagarik Sangarsha Samiti, Prem Goyal has approached the Union Finance Minister, Pranab Mukherjee and recently has also petitioned Yeshwant Singh, Chairman, Finance Committee of the Lok Sabha. The Chairman of the Lok Sabha Finance Committee as well as the Finance Minister have been approached for income tax exemption “…to persons and their descendents residing in Sikkim before 26 April 1975”. This is a major difference in the approach of the state government as well as the other members of the old business community in the state and that of the Nagarik Sangharsh Samiti.
While the state government has been petitioning the centre for exemption from paying central IT for those left out communities comprising of 400 families who had settled in Sikkim prior to the promulgation of Sikkim Subject Regulation, 1961 Prem Goyal and his Samiti have been seeking not just IT exemption but equal status as well for the left out communities and their descendants who have been residing in the state prior to April, 1975.
In another interesting issue Prem Goyal has also sought correction and amendment in the Direct Taxes Code Bill, 2010. This bill was passed in the year 2010 and is scheduled come into implementation from 2012. It is not just in the Income Tax Act, 1961 as amended in the year 2010 with the insertion of section 26AAA that the income tax exempt categories have been defined by the central government but the same definition is carried in this Code Bill as well which is due to come into implementation soon. In his letter to the Chairman, Finance Commission, Prem Goyal has sought that the definition of the word ‘Sikkimese’ be inserted as  “An individual resident in Sikkim before April 26th 1975 and their descendants”.  Therefore just an amendment in the IT Act and in section 10 of 26AAA is not enough as it will not be complete, he says.
Further in his letter to the Yeshwant Singh and Pranab Mukherjee Prem Goyal states informs of discrimination and division created by creating two categories in the above mentioned Act called Sikkimese and Non Sikkimese. He goes on to state that the “…citizens of India residing in Sikkim prior to the merger are being deprived of their legitimate rights and are being differentiated against and deprived of their social, economical and political rights”.

Chief Minister seeks IT exemption for Old Settlers; writes to Pranab for suspending Income Tax proceedings as matter is under consideration

GANGTOK, 07 Feb: The chief minister, Pawan Chamling, has asked the central government to suspend the issuing of income tax notices to members of the business community. Sources inform that in a letter to the Union Finance Minister, Pranab Mukherjee the Sikkim Chief Minister has requested that such processes be kept in abeyance as the matter of income tax exemption for the left out communities in the state is under consideration. He has further sought, in his letter, that the matter of exempting the Left Out communities from paying central income tax be kindly considered and the grievances of the Old Settlers favourably considered for exemption.
The Business community of the state have been upping the ante as far as their protests against their non exemption from paying income tax is concerned. Both the central government as well as the state government have been approached with petitions and with the Income Tax Office here in Gangtok issuing notices for tax returns on a regular basis the community members also approached the Chief Minister with their cause.
The letter of the chief minister is informed to have been submitted to the Finance Minister during the former’s visit to New Delhi in January this year. The CM, it is informed, has sought that as the matter is under due consideration of the government of india, that all proceedings initiated by Income Tax authorities as per due process of law may kindly be kept in abeyance, till a final decision is arrived at.
It needs to be mentioned here that members of the left out communities are regularly served notices by the Income Tax officer here in Gangtok and at the behest of the Income Tax office, Siliguri. The notices come with the warning that should the fail to file their returns proceedings will be initiated against them as per law.
While the state government has got exemption from paying central income tax for Sikkim Subject holders the old business community have not been exempted. In his communiqué, the chief minister has highlighted that there are about 400 families of old settlers residing here for long who have been continuously representing before the state and the union government pleading for their inclusion in the scheme of exemption on grounds of having settled in the state before the promulgation of Sikkim Subject Regulation, 1961. The chief minister has also stated that the state government has constituted a committee for examining the matter and that having been satisfied on their petitions passed a resolution in the SLA recommending their inclusion for exemption from paying central income tax.
The Finance Minister, it is informed, had responded, as he did in the Rajya Sabha a few weeks ago, saying that the matter is under due consideration of the central government.