This is with reference to the Moneylife Cover Story, “Tax Torture” (1 May 2014) by Ameet Patel. Last year, in April 2013, the Delhi High Court directed that income-tax (I-T) authorities should not adjust refunds due against past outstanding demands under any circumstances, without prior communication with the taxpayers. However, the I-T department is not sending a communication while adjusting refunds. It is adjusted with current refunds due from I-T department. How is it that demand/orders lying in the files of I-T department can be presumed to be received by the assessees and are not complied with, when the communication has never reached/ received by the assessees? An acknowledgement of such a demand and assessment order for it must be personally acknowledged first by the assessee. Only then can a demand be adjusted.
Rules of natural justice are clearly violated here. Is there any remedial measure with penal consequences on the I-T department? A public interest litigation petition must be filed against such malpractice on the part of I-T department. The correct procedure is to communicate the demand with assessment order (AO) duly acknowledged by assessee. If on receipt of it, an assessee finds factual mistakes, s/he can file a rectification of mistakes application u/s 154. Such a legal recourse, which is available to the assessee, is denied by not sending the communication of AO/demand and getting it acknowledged.
Also, even in cases where rectification applications are made on valid grounds, no order of rectification is sent/ informed to the assessee and the demand made under it lies only in the I-T department’s files. It is adjusted with refunds due later from I-T department.
Furthermore, demands not intimated to assessees lying in the files of I-T department for more than six-eight years and are illegally adjusted with refunds of later years. Here, the assessee is not even required to keep such old records with him/her. Then, how is the I-T department expected to rectify such mistakes, if it comes to his/her knowledge? 
Even from the grievances cell of the I-T department, one does not get a satisfactory answer. For petty amounts resulting in crores of rupees (as there are crores of taxpayers), the I-T department is adjusting refunds. The I-T department is illegally earning revenue of crores of rupees. Can an ordinary taxpayer fight with the I-T department, or with the courts of law, for such harassment? Who can engage in a legal battle with any government department? Yet, “Yes, an exception is there if one is a politician or…”
Mahesh Kumar, by email
The Central Processing Centre (CPC), Bengaluru, is a fraud perpetrated on the long suffering honest income taxpayer by a finance ministry and the I-T Department. It needs to do its homework on how to operate an efficient, transparent and accountable tax collection system.
I am an 83-year-old former government official who has been regularly paying taxes for close to 60 years. My comment is based on my most recent experience of running from pillar to post for more than a year to get a refund of Rs17,000 on my I-T return for AY2012-13. There is an entry for advance tax of Rs48,300 paid by me in March 2012. It was botched by a State Bank of India clerk who entered the wrong PAN number. 
Consequently, even after the error was rectified, CPC kept sending me in a mindless, mechanical manner, a demand for arrears of tax starting with Rs34,000 and ending up with a demand for Rs82,000! Letters by speed post elicited neither an acknowledgement nor a reply and telephone calls to the designated numbers, which were usually inaccessible, got parrot-like replies that offered no clarification. 
Fortunately, I was able to get my refund a few days ago, through the good offices of my Ward I-T Officer.
The ministry of finance, government of India and the I-T department need to realise that computerisation, by itself, without an efficient, accountable and income taxpayer-friendly back-up, is a recipe for complications and harassment instead of simplification and speedy tax collection.
AB Gokhale, online comment
This is with regard to “Get More Customer-Friendly” in Crosshairs by Sucheta Dalal (1 May 2014).. It is wonderful on the part of the governor, RBI (Reserve Bank of India) to have asked the banks to limit customer liability in case of losses due to hacking and phishing, unless they can prove deliberate customer negligence. He must have come to know of many such cases being prevalent.
Canara Bank is a great defaulter on this score. Their ATM security system is flawed. I know of a case where the Canara Bank debit card is with the accountholder, PIN number is known only to him and, yet, three consecutive withdrawals of Rs21,000/- have been made. Canara Bank has the video footage, showing the culprit, who did the hacking that the RBI governor is talking about.
Canara Bank refused to reinstate the amount. The victim went to a consumer court. The court asked the Bank to produce the enquiry report and video footage. Canara Bank kept silent. The court ordered reinstatement of the amount. 
Instead of being customer-friendly, Canara Bank has gone on appeal. One year is over and Canara Bank is likely to keep asking adjournments and keep dragging on the case. They have nothing to lose. The chairman will keep getting his salary and perks. The poor customer of the Bank is the loser. Does Canara Bank care?
Canara Bank is a very customer-unfriendly bank, even as it is running a bogus ATM system which lends itself to fraudulent withdrawals. RTI has revealed that, in 2013 alone, Canara Bank had more than 340 such fraudulent cash withdrawals using its ATM debit cards. This is more than one a day! Data for 2014 must be even more alarming.
I wish the ombudsman steps in and calls for all the investigation reports of each and every fraudulent cash withdrawal of Canara Bank, debit as well as credit cards, and takes suitable action. The chairman of Canara Bank needs to be hauled up and some stringent action taken against him for his unfriendliness towards his customers, as the RBI governor is pointing out. It is very sad that Canara Bank indulges in such misbehaviour and the ombudsman is silent. Hope RBI steps in and rectifies this pathetic situation. If the Canara Bank chairman cannot ensure zero occurrence of fraudulent cash withdrawals, he has to order the shut down of the Bank’s ATM operations.
Mohan Raj, online comment
Can you please include some basic articles about the stock market in Moneylife so that beginners can learn? This could cover areas like stock-picking and valuation, stock market history, technical analysis and how to use it (as described in the Moneylife’s publication Plain Truths about Stocks), importance of ratios, etc.
Pravesh Pandya, by email

This is with regard to “Yash Birla Group promises refund of FD money without interest”. The Honourable Bombay High Court should consider placing Yash Birla under custody till all monies are returned to investors, similar to the Sahara/Subroto Roy case.
Adheer Pai
This is with regard to “Happy days are here again for bank customers?” by Gurpur. Most banks are forcing debit cards against charges even for customers who do not use the card for shopping, etc, but need it just for ATM use. All banks should offer the options of free ATM card and chargeable ATM-cum-debit card on customers’ request. Free deposit and withdrawal are basic features and rights associated with savings accounts and ATM operation is just a means to that end. It is ridiculous that a customer has to pay to reduce the cost of transactions to the bank through ATM.
Recently, on account of changing technology to CTS cheques, I was asked by my public sector bank to pay for the chequebook against my individual current account that I had to maintain as overdraft (OD) account since the bank would not give overdraft facility against FD on savings account. The operative pattern of this OD account is just like SB (savings bank) account. I maintain an FD with the bank and pay interest on the OD amount. Even then, I have to pay for a chequebook that is forced on me only due to technology upgrade.
Dr VS Gogia
This is with regard to “RTI Judgement Series: Provide information on MTM position of banks.” This is a superb article!
Ramesh Popat 
This is with regard to “Reliance Life’s murky business alliances and practices” by Raj Pradhan. I learn that Bajaj Allianz Life is also resorting to MLM even though not as blatantly as Reliance. It is better that IRDA keeps a close watch on the private life insurance companies.
Anantha Narayanan 
This is with regard to “Gold investment scheme: Is it illegal under new Companies Act?” by Nivedita Shankar. The receipt is towards some promise or offer to give returns. Even if the company pays the 12th instalment, what the customer gets is goods sold by the company. It’s a purchase of goods.
Chandragupta Acharya


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IDFC FY14 net profit flat at Rs1,803 crore on higher provisions

For FY14, IDFC recorded marginal fall in its net profit to Rs1,803 crore even as its provisions rose 80%

IDFC Ltd, an infrastructure finance, non-banking financial company (NBFC), reported almost flattish full year net profit despite an increase of 80% in its provisions.

For the 12 month to end-March, the infrastructure lender said its net profit declined 2% to Rs1,803 crore from Rs1,836 crore while its total revenues, including interest income, grew 8% to Rs8,772 crore from Rs8,139 crore, a year ago period.

IDFC's provisions jumped 80% to Rs628 crore in FY14 compared with Rs350 crore during FY13.

IDFC said, its net interest income (NII) during FY14 increased 5% to Rs2,704 crore from Rs2,564 crore in same period a year ago. Its net interest margin (NIM) stood at 4.0% in FY14.  

During FY14, IDFC's operating expenses increased 4% to Rs544 crore from Rs525 crore a year ago period. Its gross disbursement decreased by 8% to Rs16,296 crore from Rs17,695 crore a year ago.

As on 31 March 2014, IDFC's capital adequacy ratio stood at 22.32%. IDFC said, its gross non performing assets ratio (GNPAs) increased to 0.56% (Rs333 crore) compared with 0.15% (Rs85 crore) a year ago. Its net non-performing assets increased to 0.37% (Rs221 crore) from 0.05% (Rs29 crore) in a year ago period.

During the quarter to end-March IDFC's net profit plunges 51% to Rs258 crore from Rs526 crore while its total revenues, including interest income,  declined 2.50% to Rs2,032 crore from Rs2,084 crore a year ago period. As in its March quarter, it made three times more provisions of Rs483 crore from Rs165 crore a year ago in same period.
Earlier in March, the RBI has granted in-principle approval for new bank licence to IDFC

IDFC declared a dividend of Rs2.60 per share.

IDFC closed Friday 2.23% down at Rs114 on the BSE, while the 30-share Sensex ended the week flat at 22,688.

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