Citizens' Issues
Trivedi Committee exposes Railways’ false claims on duplicate compensation
The Parliamentary Standing Committee said that the number of duplicate claims over past 10 years is merely 0.5% and till date, no loss to the Government Exchequer has been reported by the Railways in such cases 
 
The Parliamentary Standing Committee on Railways headed by former Minister Dinesh Trivedi has exposed the hollowness in Railways’ contention on higher number of duplicate claims for compensations by accident victims. The Railways citing higher number of duplicate compensation claims in its Statement of Objects and Reasons in the Railways (Amendment) Bill, 2014 has been seeking changes in the provisions under Section 109 of the Railways Act. 
 
"...the Committee are greatly dismayed to find that there is an absolute disconnect between the reasons put forward by the Railways to amend Section 109 of the Railways Act, 1989, and the relevant statistics made available by them to the Committee. For instance, the number of cases of duplicate claims is merely 0.5% of the total number of cases of compensation claims filed during the last 10 years. The Committee are also surprised to notice that till date, no loss to the Government Exchequer has been reported by the Railways on account of compensation given in duplicate or fraudulent cases, which starkly contradict the Statement of Objects and Reasons given in the Railways (Amendment) Bill, 2014," the Committee in its report submitted in the Parliament said.
 
The change was proposed by the Railways to prevent filing of large number of duplicate cases of compensation claims in different benches of Railway Claims Tribunal (RCT), and as a safeguard, the provisions regarding Railway administration against which application for compensation for personal injury are to be filed, were made under section 109 of the Railways Act, 1989.
 
The Railways informed the Committee that total number of cases of compensation claims filed during the last 10 years (2004-05 to 2013-14) for death or injury of passengers in train accidents was 1,920 and in untoward incidents was 63,096. Against this, only 327 cases of duplicate claims have been detected by the RCT Benches.
 
"The Committee are, therefore, of the firm conviction that there is no need to amend Section 109 of the Railway Act, 1989 as the reasoning given by Railways to amend this Section does not cut ice and is fraught with contradictions," the report says.
 
The Railways (Amendment) Bill, 2014 (Annexure III) was introduced in Lok Sabha on 11 August 2014 and was referred to the Standing Committee on Railways on 16 September 2014 by the Lok Sabha Speaker.
 
Considering the wide ramifications of the Bill, the Committee decided to invite Memoranda containing suggestions, comments and views from the public and from individuals, NGOs, experts, stakeholders and institutions in particular on various provisions of the Bill.
 
During a meeting with the Committee, the Samir Zaveri Railway Helpline of Moneylife Foundation opposed the amendments related with redefining 'accidental falling', which aims to put entire blame on the commuter and 'compensation' paid to victims or her family, in Railways (Amendment) Bill, 2014.
 
The Ministry of Railways, through the Railways (Amendment) Bill, 2014, has been seeking to amend Sections 109 and 123 and to insert a new Section 124B in the Railways Act, 1989, which mainly relates to provision of compensation to Railway accident victims. 
 
The existing provision of Section 109 of the Railways Act, 1989 entail that an application before the Railway Claims Tribunal (RCT) for compensation for the loss of life or personal injury to a passenger, may be instituted against the Railway administration from which the passenger obtained pass or purchased ticket, or the Railway administration from which the passenger station lies or the loss or personal injury occurred. 
 
While making changes vide the Railways (Amendment) Bill, 2014, the Railways have proposed to add a proviso to the effect that the Railway administration where the loss of life or personal injury to a passenger occurs shall be made a party, amongst others, if any, before the Railway Claims Tribunal. The reason given by the Railways for the proposed change is to prevent filing of a large number of duplicate cases of compensation claims in different Benches of the Railway Claims Tribunal.
 

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Tax Tentacles – 2: How They Suffocate Us
Cumbersome forms, adding non-taxable items, modifying the computation and denying legitimate deductions by raising disputes, flawed appeals and revisions -- multiple tentacles squeeze the assesse. This is second part of a multi-part series adapted from Justice S Rangarajan Memorial Lecture in Bangalore delivered recently
 
The first tentacle takes the form of income tax returns, which require disclosure of all income on pain of penalty and prosecution for concealment. Full confession is expected because the department has no way of getting full information about sources of income. Even if they do, they still want the confession. Their advertisements say, “We know you bought a house and you will face penalty for not returning the income used for the purchase” (http://goo.gl/6MLTqP). The logo on the form states: ‘KOSH MULO DAND’, which appears to mean paying tax is punishment. These words are part of the original Sanskrit phrase as appearing in Kautiliya’s Arthshastra meaning: “revenue is the backbone of administration”.
 
Filling the form itself is a pain. The US income tax form 1040 says, 'Check this box if you are blind.' The form is so powerful that it will miraculously give you sight to check the box!
 
The next tentacle reaches out with the power to search and seize and to collect data about income. The power to search is a tool for gathering data but the processing of that data lead to unexpected results. 
 
I remember a case of a Hindu undivided family (HUF) of 10 brothers in a village in Orissa where the wives were found to be wearing jewelry of Rs1 lakh each. The Wealth Tax Officer concluded that they had concealed Rs10 lakh of wealth in a year and since he can reopen assessments for 10 years, the total wealth concealed was one crore and as, at the time, the penalty for concealment was equal to the wealth concealed, he imposed penalty of Rs1 crore apart from the tax and interest for delay. 
 
The Commissioner (Appeals) had himself cancelled it. In those days, the Appeal Commissioners were quite fair. However, the Wealth Tax officer appealed and we dismissed the appeal, as it was streedhan from their parents and did not belong to the HUF. 
 
In another case, nothing was found in the search but the income tax officer insisted that the assessee, a well respected doctor, should confess that he had concealed the interest of about Rs200, which had accrued on National Savings Certificate (NSC) that he thought was taxable only when the certificate matured, because the department cannot close a search case without finding some concealed income. 
 
Even when the income is returned, further tentacles surround the assessee while making assessments by adding non-taxable items, modifying the computation and denying legitimate deductions by raising disputes such as… 
 
the status of the assessee
whether a receipt is taxable income or non-taxable capital
whether the income has accrued though not received
whether an asset is properly valued
Whether income is concealed even though particulars are disclosed
and, of course, denial or delay of refunds.
  
The provision of appeals and revisions is only to maintain an error free administration. However, in the case of taxation, the remedies are worse than the disease. We originally had a departmental appeal and an independent appeal to the Tribunal, which was final on facts and a reference to the High Court on questions of law. The department was upset that errors were being corrected often by the independent Tribunal and so changed the reference to appeal and also restricted the powers of the Tribunal to give interim relief. The Supreme Court has just concluded hearing the case against setting up the National Tax Tribunal, which in my opinion actually corrupted the constitution. It will take years to decide the pending cases and even if the error is corrected, it may not be final.
 
 
Tomorrow: Part3- How Delay Undermines the System
 
(Justice TNC Rangarajan is a former judge of Madras and Andhra Pradesh High Courts. Earlier, for more than 20 years, he was a Judicial Member of Income Tax Appellate Tribunal.)

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Sitharaman meets stakeholders on FDI in e-commerce

Sitharaman said she is also considering meetings with some state governments on the matter

 

Commerce Minister Nirmala Sitharaman on Thursday held consultations on foreign direct investment policy in e-commerce with stakeholders, including e-retailers Flipkart and Snapdeal and industry associations, especially whether FDI should be allowed in the business-to-consumer (B2C) category.
 
"It was the first meeting. We are not taking any position this way or that way from the ministry. We have heard everybody on whether they need or do not need FDI, and whether it will affect the level playing field," Sitharaman told reporters here.
 
"In fact, this is not going to be sufficient. I need more meetings with everyone, individual operators and associations," she added.
 
Sithraman said she is also considering meetings with some state governments on the matter.
 
"I may have meetings with state governments also to understand how they have taken a position because it is important for me to know in each of these cases what is the issue," she said.
 
India currently allows 100 percent FDI in business-to-business (B2B) e-commerce, but not in B2C companies selling directly to consumers.
 
Sitharaman said stakeholders raised issues related to taxation, definition and inclusion of e-commerce within the framework of the domestic trade policy.
 
Representatives from industry organisations CII, FICCI, Nasscom, the Confederation of All India Traders, and companies such as eBay, Snapdeal, Decathlon, H&M, and Ikea attended the meeting.
 
"CII is of the view that e-commerce in India is at relatively nascent stage and the market is yet to attain full maturity level," the industry chamber said in a statement here after the meeting.
 
"While CII is favourably inclined towards 100 percent FDI in B2C route, the sector should be given some time to come to a level where it can compete globally," it added.

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