The Union Cabinet chaired by Prime Minister  Narendra Modi has approved the proposal for Abolition of Institution of Income-Tax Ombudsman and Indirect Tax Ombudsman.

 The approval comes in the wake of alternative complaint redressal mechanisms chosen by public and the institution of Ombudsman could not prove to be more effective than regular existing parallel channels of grievance redressal, both the institutions of Income-Tax Ombudsman as well as Indirect Tax Ombudsman have been abolished.

Background:

The Institution of Income-Tax Ombudsman was created in the year 2003 to deal with grievances of public related to settlement of complaints relating to Income Tax. However, the Institution of Ombudsman failed to achieve its objectives. It was observed that institution of new complaints have in turn fallen to single digits. Also, tax payers started preferring alternate methods of grievance redressal like CPGRAMS (Centralized Public Grievance Redress and Monitoring System), Aaykar Seva Kendras etc. further, it was also decided in 2011 to close vacant offices of Indirect Tax Ombudsman.

Abolition of tax ombudsman: shift to alternative grievance mechanisms reshapes nationwide taxpayer complaint redressal approach. The government approved the abolition of the Institution of Income Tax Ombudsman and the Indirect Tax Ombudsman because the offices failed to achieve objectives, received very few new complaints, and taxpayers preferred alternative grievance mechanisms such as CPGRAMS and Aaykar Seva Kendras; vacant Indirect Tax Ombudsman offices had been closed earlier.