Alok Ray
This letter says that “as your account has a balance of more than USD 50,000, you are requested to submit a self-certification together with documentary evidence to the Bank regarding your country of residence for tax purposes”. Further, “in the event of non-receipt of the above documents, the above account held by you will be closed and reported…or will be closed and/or reported as US Reportable Accounts as the case may be”.
This gentleman, a senior citizen, is in a fix. First, the letter does not mention any bank account number (the space is left blank by the bank), only mentions his customer ID number (the so-called CIF number) with the SBI.
He does not have and never had any US dollar in any of his accounts, not to speak of having more than $50,000 and he does not have any bank account held abroad. He did not receive any US dollar remittance either. He went to the bank and the bank official also checked his transactions in all his bank accounts held with SBI under that CIF number.
The bank official agreed that their computer records do not show any foreign exchange transactions or any US dollar balance/remittance in any of his accounts. When asked about the source of this wrong information, the bank manager said that they did not send any such information. They have received a list of names from the RBI/ higher authorities and they are merely sending the letter along with the form to all names in the list. The purpose of this exercise was apparently to check ‘black money’.
Our friend is in a dilemma over what to do. If he submits the 3-page form to the bank, he is implicitly accepting that he has a balance of more than $50,000 which is certainly not the case with him.
On the other hand, if he does not submit the form, he is afraid that he may get into trouble for not complying with the directive. It seems that somebody somewhere fed some wrong information and the people like my friend have to go through the harassment and the mental agony.
Unfortunately, this is not an isolated incident. I, too, have faced harassment by tax authorities. Though I paid all due advance taxes before the deadline, these apparently did not show up in the computer of the tax authorities and I have been sent wrong demand notice instead of my due refund. I had to contest by spending my time and money (to pay for the services of a tax lawyer) to eventually get the refund.
The problem is that there is no accountability or penalty for the people who feed wrong/incomplete information or act on that basis, thereby harassing honest citizens.
In the case of my friend, it seems, some names (along with their CIF number) have been hurriedly picked up and notices have been sent to obey some deadline. It is also possible that some agency gets paid by the number of cases it processes. In the rush to meet deadlines, the case of someone else has been mixed up with my friend’s.
Also, if the people concerned did the homework properly, they would have put in the letter itself the alleged bank account number where they found US dollar of more than 50,000, instead of keeping it blank.
When there is so much talk of reducing unnecessary paper work and harassment, such instances show that it has not percolated to the bureaucracy. They are simply concerned with mindless procedures without due diligence. Their job ends with sending so many names or handling so many cases within a deadline, no matter whether it is being done on the basis of incomplete or wrong information.
Wastage of resources
The government machinery is going through the motion of catching ‘black money’ by sending notices including lots of wrong people. A huge amount of man hours and materials (like rims of paper as the whole thing is done with hard copies) are being wasted. The piles of filled-in forms would, in most likelihood, gather dust either in the bank branch or some other place . Let me end with an anecdote showing how the bureaucracy obeys directives issued by higher authorities. Many years ago, I was to attend a conference in Delhi for which I had to catch an early morning flight. As taxis were difficult to get at that hour, I requested the transport department of IIM Calcutta (as was the standard practice) to provide me transport to the airport.
The officer told me: “Sir, a government circular (on economy drive) has come which prohibits overtime payment to drivers. So, please rent a car from a rental agency and I would reimburse the amount.”
