In Manusmriti, the Manu stated that the king has the sovereign power to levy and collect tax according to sastras.
[10] लोके च करादिग्रहणो शास्त्रनिष्ठः स्यात् । — Sandeep Baldi, Shyam Nagar 128, Manusmriti [10] (It is in consonance with sastras to collect taxes from citizen.
[10] According to Kautilya's Arthashastra – an ancient treatise on the study of economics, the art of governance and foreign policy – artha had a much wider significance than wealth.
In Raghuvamsh, Kalidas, eulogising King Dalip, said, "it was only for the good of his subjects that he collected taxes from them just as the sun draws moisture from the earth to give it back a thousand time.
To fill up the treasury, the first Income-tax Act was introduced in February 1860 by James Wilson, who became British-India's first finance minister.
[12] In 1956, Mr. Nicholas Kaldor was given the responsibility of investigating the Indian tax system in light of the revenue requirement of the second five-year plan (1956–1961).
The officials of the Board in their ex officio capacity also function as a division of the ministry dealing with matters relating to the levy and collection of direct taxes.
The chairman and every member of CBDT are responsible for exercising supervisory control over specialised functional categories at field offices of the IT Department.
[citation needed] A very well known model of good governance, Sevottam, is being implemented by the Income Tax Department.
The Income Tax Department is a leader in implementing Sevottam,[17] which is certification of quality of public service delivery in India.
The term Sevottam comes from the Hindi words Seva and Uttam and supposedly means excellence in service delivery.
The citizen-centric approach includes the following three components:[18] Ayakar Seva Kendra (ASK; translated as Income Tax Help Centre) is an integrated model that provides single window system for registration of all applications including those or redressal of grievances as well as receipt of paper return.
[citation needed] Over the years income tax return filing has been made more simple, convenient, and smart through use of technology.
This includes following: Taxation law is not only very complex as it requires specialised knowledge and expertise to implement, but also it necessitates various kinds of deterrent actions to ensure compliance by taxpayers.
Such automatic processing of returns is called as "summary assessment" and is carried out in accordance with sub-section (1) of section 143 of the Income Tax Act, 1961.
The department can search residential and business premises of any taxpayer to check records and valuables to ensure that no evasion of tax is taking place.
Section 132 of the Income Tax Act, 1961 provides the department the power to conduct search and seizure.
The finance ministry instructed all revenue intelligence agencies to join the crackdown on forex traders, hawala operators and jewellers besides tracking movement of demonetised currency notes.
[28] Income Tax departments raided various illegal tax-evasive businesses in Delhi, Mumbai, Chandigarh, Ludhiana and other cities that traded with demonetised currency.