The Central Board of Direct Taxes on Monday issued chargesheets against three senior Indian Revenue Service officials, involved in preparing and publicising a report on increasing income tax, reported News18. The three officials, at the rank of the principal commissioner, have been suspended.

On Sunday, the Centre rejected a proposal made by the Indian Revenue Service officials suggesting the government should increase taxes to cushion the economic fallout of the coronavirus pandemic. The officials proposed increasing tax on the super rich to 40% from the present 30% and imposing higher tax on foreign companies. In a 44-page report titled FORCE, or Fiscal Options and Response to Covid-19 Epidemic, the officials who refer to themselves as “Team Force” also made a series of suggestions for revenue generation.

The three officers are Sanjay Bahadur, the principal director (investigation) of the northeast region, Prakash Dubey, the director of department of personnel and training and IRS Association’s joint secretary), and Prashant Bhushan, the principal commissioner of income tax, Delhi and IRS Association’s general secretary. They have been given 15 days to file a written reply in their defence and are supposed to convey whether they want to be heard in person.

The action was being reportedly taken as the report triggered panic and uncertainty over tax policy in an already tense economic condition brought on by the coronavirus pandemic. An unidentified government official told Hindustan Times that the three officials had failed to be cautious and misguided 50 young officers to prepare the report and publicise it.

Bhushan, a 1988 batch IRS officer, allegedly put up the report in the public domain. Dubey and Bahadur have been charged with getting the young officials to draft the report which was passed on to the IRS Association to place in the public domain.

“These senior officers, despite having more than 30 years of service, failed to exercise due care and went on to misguide the 50 young officers,” an unidentified CBDT official said. “[The] government would have definitely given due consideration to suggestions made by the young officers.” It was also pointed out that the suggestions were against the government’s current taxation policy.

In this year’s Budget, the Centre offered individuals the option of paying lower income tax rates if they let go of tax exemptions.

The report had suggested levying a Covid-19 Relief Cess of 4% on those with taxable income of more than Rs 10 lakh to help mobilise revenue for funding the relief work.

However, the Centre rebutted the report and said it was a “misconduct” tantamount to an act of indiscipline. It said the suggestions were neither sought and nor is it the Indian Revenue Service’s duty to prepare it.

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Covid-19: Centre rejects IRS’ proposal of taxing the super rich, calls it an ‘act of indiscipline’