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Results Framework documentFinancial year 2012-13Income tax department

The High Power Committee (HPC) on Government Performance chaired by the Cabinet Secretary in its meeting held on March, 11, 2011, decided to include the responsibility centers (RCs) under the Department of Revenue in phase III of the Results Framework Document (RFD) System. Accordingly, ITD is required to prepare its RFD for the year 2012-2013 by 5th

March, 2012. Various Committees have been set up to facilitate the process of preparation of the document. Letters have been issued to all the Chief Commissioners/Director Generals of Income Tax, Officers/Staff Associations, soliciting suggestions for preparation of RFD by 20th December 2011. Copy of the letters along with all the relevant documents have been uploaded here. Suggestions may kindly be sent to this office through e-mail at [email protected] Enclosed Documents:

OM dated 21-11-2011 Letters addressed to CCIT/DGIT/Officers & Staff Associations

soliciting suggestions Letters addressed to the Conveners of various committees RFD Background note Vision 2020 & Strategic Plan 2011-15 Project Sponsor – wise mapping of strategic objectives, sub-

goals, action points and functional committees

Project Sponsor wise Committees RFD Guidelines 2012-13 RFD of ITD for 2010-11 DIT (O&MS)

mailto:[email protected]

NILIMESH BARUAH, IRS

DIRECTOR

F. No. 22/01/2011/AP/DOMSGovernment of IndiaMinistry of Finance, Department of Revenue

DIRECTORATE OF INCOME TAX(ORGANISATION & MANAGEMENT SERVICES)LEVEL-5, EAST BLOCK-2,R.K. PURAM, NEW DELHI - 110066.Tel. No. : 011 – 26197238; Fax No. : 011 – 26185607;

Dated 21st November,2011

To

The ConvenerFunctional Committee on RFD

Sir,

Subject: Preparation of “Results Framework Document” for the Income-tax Department for the financial year 2012-13 – Regarding.

Kindly find enclosed a copy of the Office Memorandum on preparation of Results Framework Document for Income Tax Department dated 21-11-2011 for your reference.

2. I have the pleasure to inform you that CBDT has nominated you as the convener of the Functional Committee on RFD. The list of officers of the committee headed by you is enclosed herewith. The terms of reference of the committee are given in the OM dated 21-11-2011. The committee is to submit its report through the project sponsor by 31st December 2011.

3. All the relevant documents have been uploaded to irsofficersonline.gov.in in a separate folder on “RFD Documents”. It is requested that print out of all the documents may kindly be taken. The list of documents uploaded on irsofficersonline.gov.in is contained in the covering note put on the website, a copy of which is enclosed herewith.

This issues with the approval of Chairman, CBDT.

Yours faithfully,

(Nilimesh Baruah)Director of Income Tax (O&MS)

Copy to:

1. Chairman, CBDT2. All the Members of the functional committee.


NILIMESH BARUAH, IRS

DIRECTOR

F. No. 22/01/2011/AP/DOMSGovernment of IndiaMinistry of Finance, Department of Revenue

DIRECTORATE OF INCOME TAX(ORGANISATION & MANAGEMENT SERVICES)LEVEL-5, EAST BLOCK-2,R.K. PURAM, NEW DELHI - 110066.Tel. No. : 011 – 26197238; Fax No. : 011 – 26185607;

Dated 17th November,2011

To

Shri S. P. Swain,President, All India IRS AssociationNew Delhi.

Madam/Sir,

Subject: Preparation of “Results Framework Document” for the Income-tax Department for the financial year 2012-13 -

The Prime Minister had approved in September, 2009 a new mechanism for “Performance Monitoring and Evaluation System” (PMES) for all Government Ministries/Departments in India. Under this system, each Central Government Department is required to prepare a Results Framework Document (RFD) as per a set of Guidelines issued for this purpose. The High Power Committee (HPC) on Government Performance chaired by the Cabinet Secretary in its meeting held on March, 11, 2011, decided to include the Income Tax Department in the Results Framework Document (RFD) System. Accordingly, ITD is required to prepare its RFD for the year 2012-2013 by 5th March, 2012.

2. A detailed background note has been prepared for the guidance of the departmental officers. All the relevant documents have been uploaded to irsofficersonline.gov.in in a separate folder on “RFD Documents”. It is requested that print out of all the documents may kindly be taken and the following broad issues relating to RFD be discussed with the officers & staff in your region:

What are the objectives to be put on the RFD within the framework of the Strategic Plan 2011-15?

What operational goals to be determined from the 3 strategic objectives? What relative weights to be put for each of these objectives? How do we align the RFD document with the ‘Annual Action Plan’ within

the overall framework of the five year ‘Strategic Plan ‘?

Do we draw up separate RFDs for the Chief Commissioners at the cadre-controlling levels for the goals to be achieved by the field officers to facilitate monitoring at apex level?

How do we select Success Indicators and milestones for measuring success within the framework of suggested guidelines?

What mechanism do we put in place for monitoring and evaluating performance under the RFD process?

Identification of Project Implementation teams

3. I take this opportunity to solicit your valuable suggestions for preparation of the RFD after wide consultations with all the stakeholders. Suggestions may kindly be sent latest by 20th December, 2011 through e-mail at [email protected].

This issues with the approval of Chairman, CBDT.

Yours faithfully,

Enclosed: Copy of O.M.


F. No. 22/1/2011/AP/DOMSDirectorate of Income Tax (O&MS)

East Block-II, Level-VR. K. Puram, New Delhi

OFFICE MEMORANDUM

Dated: 21st November, 2011

Subject: Preparation of Results Framework Document for Income tax Department for F. Y. 2012-13

Background:

1. The Prime Minister had approved in September, 2009 a new mechanism for “Performance Monitoring and Evaluation System” (PMES) for all Government Ministries/Departments in India. Under this system, each Central Government Department is required to prepare a Results Framework Document (RFD) as per a set of Guidelines issued for this purpose.

2. The High Power Committee (HPC) on Government Performance chaired by the Cabinet Secretary in its meting held on March, 11, 2011, decided to include the responsibility centres (RCs) under Department of Revenue in phase III of the RFD System. Accordingly, the Income Tax Department (ITD) is required to prepare its RFD by 5th

March, 2012 for the year 2012-2013.

3. DGIT (Admn) had prepared the RFD of ITD for the financial year 2010-11. However, the preparation of RFD for ITD was not mandatory. But with effect from the financial year 2012-13, it is mandatory and the formal procedure laid down by the guidelines is to be followed in its preparations.

Coordinator for RFD:

4. Chairman, CBDT has nominated DIT (O&MS) as the coordinator for preparing the Results Framework Document (RFD). The coordinator is to perform the following functions as per the Guidelines:

• Repository of all Information and Knowledge on Performance Management & Evaluation System (PMES) and RFD

• Departmental Link with the Cabinet Secretariat• Monitor key deadlines including Mandatory Indicators • Share knowledge and experience• Lead work on RFD• Select proper teams for preparation of RFD

RFD, PRIS and Quantum Improvement:

5. RFD emphasizes thrust on ultimate deliverables and outcomes and takes a comprehensive view of an organizational performance. It is supposed to incorporate all expected deliverables of the Department, namely, physical, quantitative, qualitative, static efficiency (Short-term) and dynamic efficiency (long-term). Accordingly performance measurements include long-term outcome and strategic goals, intermediate and short term outcomes. The performance under this system is to be reduced to a composite score giving a single unified view of the organizational performance.

The RFD process is aimed at making quantum improvement in the Departmental performance which is to be ultimately to be linked to the Performance Related Incentive Scheme (PRIS) as suggested by the 6th Pay Commission. The aim of this exercise is to develop a system which is a win-win situation for all the stakeholders, namely, the ‘Nation must win’, ‘Taxpayers must win’ and Employees must win’.

RFD envisages shift in accountability framework from emphasis on process compliance and input control to effective and responsive delivery of results and services. Accountability is seen as the ability of the system to deliver results and services effectively and in a responsive manner of the appropriate quality and at the right time.

In order to achieve all these objectives, creative and innovative potential of all the personnel of the Department is to be unleashed so that ITD can be made one of the best tax administrations in the world. RFD process would require a lot of coordination across functional areas. Hence suggestions are being solicited from personnel at all levels and all functional areas of the department.

Board Decision on RFD

6. A Road Map for preparation of RFD was submitted before the full Board on 26-09-2011. The following decisions were taken as per the minutes of the meeting dated 4-10-11:

(i) Appropriate number of Committees may be formed to identify the key objectives and the inter-se priorities along with assignment of weights.

[Action: DIT (O&MS)]

(ii) In order to create awareness amongst officers/officials of the Department, a background note regarding RFD may be uploaded on the irsofficersonline.gov.in.


(iii) Each Zonal Member should have a Zonal Conference on the subject during which the DIT (O&MS) may make a presentation, so that the importance of this issue is underlined.

[Action: All Members of CBDT/DIT (O&MS)]

Roadmap for preparation of RFD

7. The following course of actions and the time lines has been finalized for the preparation of RFD:

Soliciting suggestions from field officers and the CBDT’s attached Directorates

To be received latest by 20th

December, 2011Inviting suggestions from Staff & Officers associations To be received latest by 20th

December, 2011Preparation of RFD Holding of Zonal Conferences by the concerned Zonal Members to sensitize filed officers

November – 2nd Week of December, 2011

Setting up various committees with representations from field officers from different geographical locations to come up with recommendations on the content of the RFD after department-wide consultations

Recommendations to be, received from functional committees latest by 31st

December, 2011

Organizing a two-day workshop before finalization of RFD Sometime in the 2nd Week of January, 2012

Preparation of Final Draft by Core drafting committee Latest by 25th January, 2012

Inclusion of suggestion and preparation of revised Draft RFD Document based on the deliberation of two days workshop

Latest by 31st of January, 2012

Full Board meeting on Draft RFD Document Sometime in the 1st Week of February, 2012

Submission of Final Draft of RFD Document to concerned Administrative Ministry/ Department

2nd week of February, 2012

7.1 Letters soliciting suggestions on the following broad issues have been sent to all the cadre-controlling CCsIT & DGsIT/ Officers and Staff associations with the request to respond by 20th December 2011 (Copy of the letter is available in the RFD folder in irsofficersonline.gov.in):


What operational goals to be determined from the 3 strategic objectives? What relative weights to be put for each of these objectives? How do we align the RFD document with the ‘Annual Action Plan’ within the

overall framework of the five year ‘Strategic Plan ‘? Do we draw up separate RFDs for the Chief Commissioners at the cadre-

controlling levels for the goals to be achieved by the field officers to facilitate monitoring at the apex level?

How do we select Success Indicators and milestones for measuring success within the framework of suggested guidelines?


Identification of Project Implementation teamsRFD and the Strategic Plan:

7.2 The following 11 functional committees have been set up after clubbing various Action Points linked to 3 strategic objectives contained in the Strategic Plan 2111-15 on the basis of work allocation of Members of CBDT:

Functional Committees Project

Sponsor1. Committee on International tax & Transfer Pricing Initiatives Chairman, CBDT2. Committee on taxpayer service Initiatives Chairman, CBDT

3. Committee on Infrastructure & Financial Management Initiatives Chairman, CBDT4. Committee on Strategic Technology Initiatives Member (L&C)5. Committee on Enforcement Initiatives Member (Inv)6. Committee on Research Initiatives & Knowledge Management Member (P&V)7. Committee on Ethical Standards Member (P&V)8. Committee on Human Resource Development Initiatives Member (P&V)9. Committee on Tax-exempt Entities Member (IT)10. Committee on Collection Strategy Initiatives Member (R)11. Committee on Litigation Management Initiatives Member (A &J)

The terms of reference for the functional committees are as under:

Consult field officers, Officers & Staff Associations Making Recommendations on aligning Annual Action Plan with the Strategic

Plan 2011-15 Which ‘Action Points’ should be included in the RFD document and which are

to be made part of the Annual Action Plan? Operationalization of Strategic Objectives with measurable goals in respect of

the various ‘Action Points’ Recommendations in respect of the weightage to be assigned to the objectives

in a given functional area Coming up with implementation plans for the ‘Action Points’ Identification of Project Implementation teams Development of success indicators and specific milestones for measuring

progress

The functional committees are to submit their reports for the respective functional areas through the project sponsor by 31st December 2011. The list of committees

and their constitution is available in the RFD folder in irsofficersonline.gov.in)

7.3 The core drafting committee under the guidance of Member P&V will put together the draft RFD document incorporating recommendations from various functional committees and field formations. Prior to finalization of the final draft, there will be a two-day workshop on RFD in the 2nd week of January, 2012. The core committee will submit the final draft by 25th January 2012 so that the final draft could be presented before the full Board in the first week of February, 2012.

7.4 The dates for the Zonal conferences will be intimated after consultation with the concerned Chief Commissioners.

8. Mr. Sanjay Bhargava, an alumnus from IIT, Mumbai & IIM (A) has been appointed as an honorary consultant to help preparing the RFD document. His contact details are: email id: [email protected], cell: 09999994086

9. The following documents are to be jointly read with this OM and are available in the RFD folder in irsofficersonline.gov.in:

Letters addressed to CCIT/DGIT soliciting suggestions Letters addressed to the Conveners of Functional Committees Letters addressed to Officers/Staff Associations RFD Background note Vision 2020 & Strategic Plan 2011-15 Project Sponsor – wise mapping of strategic objectives, sub-goals, action

points and functional committees Project Sponsor wise Committees RFD Guidelines 2012-13 RFD of ITD for 2010-11

Inputs/Suggestions pertaining to RFD may kindly be sent to this Directorate latest by 20 th

December, 2011 through e-mail at [email protected].

(Nilimesh Baruah)Director of Income-tax (O&MS)

Encl: As above

Copy to:

1. PS to the Chairman, CBDT2. PS to All Members, CBDT



3. All CCsIT/DGsIT4. All the Members of the functional committees5. To the DBC, to be uploaded on the website

PROJECT SPONSOR – WISE MAPPING OF STRATEGIC OBJECTIVES, SUB-GOALS, ACTION POINTS AND FUNCTIONAL COMMITTEES

F/CProject Sponsor: Chairman, CBDT

Objectives Sub – Goals Action Points

To provide efficient and effective administration

1. Meeting the challenges of International tax administration

Expand knowledge base of employees on the latest trends in international taxation issues

Capacity building in complex areas of transfer pricing and international taxation

Enhance cooperation with the treaty partners and other international organizations and work towards raising its international profile

Exchange and sharing of information with other tax administrations Set up overseas units for facilitating exchange of information Set up good administrative practices for quicker disposal of disputes

through mutual agreement procedure Make dispute resolution panel work efficiently and effectively with

proper administrative support and consider expanding its scope Finalize Advanced Pricing Agreement procedure for transfer pricing

To Promote Voluntary Compliance

2. Incorporating taxpayer perspectives to improve service delivery

Take operational decisions after incorporating the views of the affected parties

Facilitate participation in the tax system by all segments of taxpayers Institute a study on barriers of compliance as on ongoing program Institute a study on compliance cost of different categories of taxpayers

on a periodic basis3. Create a channel strategy for taxpayer services

Segmentation of taxpayers to develop appropriate channel strategy for communication and tax payer services for providing targeted and timely guidance

4. Single window facility for taxpayers

Make ASK the flagship project of ITD for excellence in taxpayer service delivery and Set up ASK at all buildings of ITD on fast track

Build capacity to meet the service standards by developing integrated service delivery mechanism cutting across functional areas of ITD

Make all ASK centers of excellence and IS: 15700 compliant Display Citizen’s Charter of ITD prominently at all buildings of ITD and

monitor implementation of Citizen’s charter Communicate service standards contained in the Citizen’s charter to all

taxpayers through different channels Implement scientific record management for improving service delivery Develop a mechanism for taking feedback from taxpayers and conduct

periodic surveys through independent agencies to measure taxpayer satisfaction

Expand the bundle of services to be provided at ASK by providing facilities for online filing of applications including grievances, acknowledging all applications from taxpayers on real time basis, providing facility for online checking of status of all applications and making all relevant information materials available to taxpayers online

Set up Integrated Call Centre facility to check status of applications filed

at ASK centers across the country Develop FAQs for taxpayers centrally for use across the country

Essential Pre-requisites for realization of Vision of ITD

5. Up-gradation of Infrastructure

Up-gradation of physical & technological infrastructure for the employees as well for the taxpayers to achieve excellence in service delivery

Providing adequate financial resources and a mechanism for the management of the same in the Department so that strategic projects are executed within specified time frame

6. Effective Financial Management

Project Sponsor: Member (L & C)Objectives Sub – Goals Action Points


1. Developing a robust management information system

Make provision for a robust Management Information System (MIS) for effective decision making in the plan to reduce reporting requirements by personnel

Bring all data of ITD under a single custodian for formulating progressive tax policy

Create a single data center under a single custodian for storing all taxpayer and third party data

2. Developing Data warehouse & Business Intelligence solution

Bring all data of ITD under a single custodian for deploying effective data mining tools

Upgrade current data mining and other initiatives for Data Warehousing Solutions for developing Comprehensive Business Intelligence for just in time enforcement capability

Use Risk Management methodology to identify high risk taxpayers by continuously revising and enhancing case selection process

Extend unit of risk assessment from individuals to group of taxpayers Create a Directorate of Risk Management for dedicated attention to

management of risk3. STRATEGIC TECHNOLOGY INITIATIVE

i. Developing strategic technology plan:

Formulate Strategic Technology Plan Augment computational capacity and network connectivity for handling

huge data volumes in an environment of dynamic computing paradigms Plan to remain cost effective and avoid technology obsolescence Resolve multiplicity of platforms in favor of uniform holistic rule-based

application matrix that can optimally run on the state of the art hardware and networks

Integrate all the elements of tax collection process through technology with information seamlessly flowing to the users for informed decision making

Ensure security of all information assets and database through a systemic implementation of periodic vulnerability testing, security & forensic audits to prevent frauds

Make business intelligence out of processed data and make it available to the actual users almost on real time basis

Upgrade skills of the ITD personnel on a continuous basis Plan to reduce carbon footprint through green technology Devise a detailed transition plan for e-governance initiatives Consider setting up of Special Purpose Vehicle for quick and effective

response to the Technology challengeii. Developing

Integrated Technology Platform: Making the transition for new DTC smooth

Integrate the compliance process chain through a common technology platform

Make use of the opportunity to move towards a fully automated technology-driven system

Prepare for the transition with a detailed outreach program both for the taxpayers and departmental personnel

Project Sponsor: Member (Inv.)Objectives Sub – Goals Action Points

To formulate progressive tax policy

1. Instituting Study on Plugging of Tax Leakages.

Constitute an expert group for conducting a study on tax leakages and suggesting measures to plug such leakages

Constitution of the Expert Group to be done before the end of the financial year 2010-11


2. Develop Cyber forensic Best Practices

Ensure integrity / evidentiary value of digital data by following cyber forensic best practices

Make standard operating practices (SOP) in respect of cyber forensic best practices for acquiring, analyzing and archiving digital data flowing into the system

3. Ensuring surveillance of fund flow that impact the physical and economic Security of the country

To develop a robust system of criminal investigation with focus on fund flows that impact national security

To develop an outreach program to sensitize stakeholders about economic and financial security

To keep tabs on fund flow relating to money laundering, narcotics and terrorTo ensure exemplary enforcement against abusive schemes and corporate tax frauds

Project Sponsor: Member (P & V)

Objectives Sub – Goals Action PointsTo formulate progressive tax policy& efficient and effective administration

1. Making a multi-year commitment to research program

Make a multi-year commitment to research program to transform ITD into a research driven organization

Set up a research unit having a multi-disciplinary team coordinating efforts on tax research as an ongoing program

Set up Revenue Services Research Institute with physical and digital library and dedicated bandwidth

Develop research-driven methods to detect non-compliance and other aspects of tax administration

Encourage research relevant for tax administration by trainee officers at National Academy of Direct Taxes and other officers pursuing study leave

2. REAL TIME KNOWLEDGE MANAGEMENT

i. Ascertaining knowledge requirements of ITD

Identify knowledge gap and ascertain knowledge requirements across functional areas of ITD

Identify sources of knowledge creation Encourage the process of co-creation Develop institutional memory

ii. Developing mechanism for real time knowledge sharing

Provide facility for online learning management system with facility for transmitting and storing webcasts and VOIP

Set up online discussion forum to discuss issues relating to tax administration

Set up mechanism of knowledge sharing through formal & informal channel

Provide for corporate subscription of judicial referencing system and economic data bases


3. Ensuring that tax practitioners and departmental personnel adhere to professional standards

Administer effective system of sanctions for those who fail to follow the law

Make departmental personnel demonstrate exemplary ethical standards while implementing the tax laws

4. Aligning HR Strategy to Goals

Formulate a comprehensive HR strategy encompassing all aspects of personnel requirements and development with a sound structure for HR Directorate

Conduct training needs analysis and invest in high quality training for overall development of personnel

Match job requirements with skill sets of employees for placements by developing Human Resource Information System (HRIS)

Conduct a detailed analysis of shortages of manpower and reasons thereof and come up with possible solutions

Consider a separate recruitment board for expeditious recruitment of staff

Expedite processing of cadre restructuring proposal and develop automatic mechanism for timely periodic evaluation

Create motivational climate for employees to excel by designing a career progression path

Encourage innovations at work Conduct an employee satisfaction survey through an independent

agency for ascertaining satisfaction level of departmental emplo

Project Sponsor: Member (IT)

Objectives Sub – Goals Action PointsTo provide efficient and effective administration

1. Developing mechanism for monitoring tax-exempt sector

Develop a national data base of tax-exempt entities and list out their activities

Extend facilities for timely registration of the tax-exempt entities Proactively address misuse of tax-exempt status

Project Sponsor: Member (R)

Objectives Sub – Goals Action PointsTo formulate progressive tax policy& efficient and effective administration

1. Developing a Revenue Base and Forecasting model.

Constitute an expert group for developing a revenue forecasting model Constitution of the Expert Group to be done before the end of the

financial year 2010-112. Developing a Tax Collection strategy

Develop an annual collection plan that would set targets and time standards for both current and arrear demand to be collected on the following basis:

a) Analysis of the nature of current and arrears demand to identify collection pattern

b) Analysis of the tax records of taxpayersc) Use of risk scoring techniques to create risk profiles of debtors

Develop effective procedures for writing off uncollectable tax arrears Consider separation of assessment and collection function


3. Strengthening partnership with tax practitioners; tax deductors; and third party partners

Constitute central and zonal Direct Tax Advisory Councils and make these fora effective through regular interaction

Disseminate information through tax practitioners and extend services to them

Strengthen partnership with tax deductors with proper handholding and education programs

Strengthen partnership with third party information providers with guidance

Devise standardized format for supply of third party data afacility for electronic submission of data

Project Sponsor: Member (A & J)

Objectives Sub – Goals Action PointsTo Promote Voluntary Compliance

1. Litigation Management Set up mechanism for putting an end to unproductive litigation Implement appeal registry and strengthen appellate commissioner

machinery for quicker disposal of appeals Issue revenue rulings on important legal issues having wider

ramifications Complete work on the Judicial Referencing system on fast track and

make it available to all personnel

Committees for preparation of RFD documentProject Sponsor: Chairman, CBDT

Functional Committee No 1: Committee on International tax & Transfer Pricing Initiatives

Strategic Objective Sub – Goals Action Points Names of the Officers

To provide efficient and effective admnistration

Meeting the challenges of International tax administration

Expand knowledge base of employees on the latest trends in international taxation issues

Capacity building in complex areas of transfer pricing and international taxation

Enhance cooperation with the treaty partners and other international organizations and work towards raising its international profile

Exchange and sharing of information with other tax administrations

Set up overseas units for facilitating exchange of information

Set up good administrative practices for quicker disposal of disputes through mutual agreement procedure

Make dispute resolution panel work efficiently and effectively with proper administrative support and consider expanding its scope

Finalize Advanced Pricing Agreement procedure for transfer pricing

1.R. N. Dash

2. Sunil Gupta

3. L. N. Pant

4. Sanjay Kumar

5. Rahul Naveen

6. D. K. Gupta

Project Sponsor: Chairman, CBDT

Functional Committee No 2: Committee on Taxpayer service Initiatives


To promote voluntary compliance

Incorporating taxpayer perspectives to improve service delivery

Take operational decisions after incorporating the views of the affected parties

Facilitate participation in the tax system by all segments of taxpayers

Institute a study on barriers of compliance as on ongoing program

Institute a study on compliance cost of different categories of taxpayers on a periodic basis

1.Pomela Bali Prasad

2. K. K. Tiwari

3. Ashutosh Chandra

4.Mahendra Singh

5. Jahanzeb Akhtar

6. Neena Kumar

7. K. L. Maheshwari

8. Navneet Manohar

9. Nilimesh Baruah

Create a channel strategy for taxpayer services

Segmentation of taxpayers to develop appropriate channel strategy for communication and tax payer services for providing targeted and timely guidance

Single window facility for taxpayers

Make ASK the flagship project of ITD for excellence in taxpayer service delivery and Set up ASK at all buildings of ITD on fast track

Build capacity to meet the service standards by developing integrated service delivery mechanism cutting across functional areas of ITD

Make all ASK centers of excellence and IS: 15700 compliant

Display Citizen’s Charter of ITD prominently at all buildings of ITD and monitor implementation of Citizen’s charter

Communicate service standards contained in the Citizen’s charter to all taxpayers through different channels

Implement scientific record

management for improving service delivery

Develop a mechanism for taking feedback from taxpayers and conduct periodic surveys through independent agencies to measure taxpayer satisfaction

Expand the bundle of services to be provided at ASK by providing facilities for online filing of applications including grievances, acknowledging all applications from taxpayers on real time basis, providing facility for online checking of status of all applications and making all relevant information materials available to taxpayers online

Set up Integrated Call Centre facility to check status of applications filed at ASK centers across the country

Develop FAQs for taxpayers centrally for use across the country

Project Sponsor: Chairman, CBDT

Functional Committee No 3: Committee on Infrastructure & Financial Management Initiatives


Essential Pre- requisites of realization of Vision of ITD

Up-gradation of Infrastructure

Up-gradation of Physical & technological infrastructure for the employees as well for the taxpayers to achieve excellence in service delivery

Providing adequate financial resources and a mechanism for the management of the same in the Department so that strategic projects are executed within specified time frame

1.Sunil Verma

2.K. C. Jain

3.Shefali Shah

4.D. N. Mishra

Effective Financial Management

5.Neeraj Singh

6.Govind Singhal

7.Ramesh Chander Dande

8.R. K. Gupta

Project Sponsor: Member (L&C)

Functional Committee No 4: Committee on Strategic Technology Initiatives

Objectives Sub – Goals Action Points Names of the Officers

To provide Efficient and Effective tax administration

Developing a robust management information system

Make provision for a robust Management Information System (MIS) for effective decision making in the plan to reduce reporting requirements by personnel

Bring all data of ITD under a single custodian for formulating progressive tax policy

Create a single data center under a single custodian for storing all taxpayer and third party data

1. M. K. Mirani

2. Harish Kumar

3. Lekha Kumar

4. D. S. Chawla

5. Rajiv Mehrotra

6. Parneet Singh Sachdeva

7. Suresh Kumar

Developing Data warehouse & Business Intelligence solution

Bring all data of ITD under a single custodian for deploying effective data mining tools

Upgrade current data mining and other initiatives for Data Warehousing Solutions for developing Comprehensive Business Intelligence for just in time enforcement capability

Use Risk Management methodology to identify high risk taxpayers by continuously revising and enhancing case selection process

Extend unit of risk assessment from individuals to group of taxpayersCreate a Directorate of Risk Management for dedicated attention to management of risk

8. Govind Lal

9. S. K. Singh

10. YVST Sai

11. Ashish Abrol

Strategic Technology Initiative

i. Ascertaining strategic technology plan

Formulate Strategic Technology Plan Augment computational capacity and

network connectivity for handling huge data volumes in an environment of dynamic computing paradigms

Plan to remain cost effective and avoid technology obsolescence

Resolve multiplicity of platforms in favor

of uniform holistic rule-based application matrix that can optimally run on the state of the art hardware and networks

Integrate all the elements of tax collection process through technology with information seamlessly flowing to the users for informed decision making

Ensure security of all information assets and database through a systemic implementation of periodic vulnerability testing, security & forensic audits to prevent frauds

Make business intelligence out of processed data and make it available to the actual users almost on real time basis

Upgrade skills of the ITD personnel on a continuous basis

Plan to reduce carbon footprint through green technology

Devise a detailed transition plan for e-governance initiatives

Consider setting up of Special Purpose Vehicle for quick and effective response to the Technology challenge

ii. Developing integrated Technology Platform: Making the transition for new DTC smooth

Integrate the compliance process chain through a common technology platform

Make use of the opportunity to move towards a fully automated technology-driven system

Prepare for the transition with a detailed outreach program both for the taxpayers and departmental personnel

Project Sponsor: Member (Inv.)Functional Committee No 5: Committee on Enforcement Initiatives


To formulate progressive tax policy

Instituting Study on Plugging of Tax Leakages.

Constitute an expert group for conducting a study on tax leakages and suggesting measures to plug such leakages


1. M. Sailo2. K. V. Choudhary

3. Sushil Chandra

4. Shishir Jha

5. Madhu Mahajan

6. H. B. Mahanta

7. V. K. Pandey


Develop Cyber forensic Best Practices

Ensure integrity/ evidentiary value of digital data by following cyber forensic best practicesMake standard operating practices (SOP) in respect of cyber forensic best practices for acquiring, analyzing and archiving digital data flowing into the system

8. Ashish Verma

10.Gunjan Prasad

11.Madhukar Bhagat

Ensuring surveillance of fund flow that impact the physical and economic Security of the country

To develop a robust system of criminal investigation with focus on fund flows that impact national security

To develop an outreach program to sensitize stakeholders about economic and financial security

To keep tabs on fund flow relating to money laundering, narcotics and terror

To ensure exemplary enforcement against abusive schemes and corporate tax frauds

Project Sponsor: Member (P & V)Functional Committee No 6: Committee on Research Initiatives& knowledge Management


To provide progressive tax policy&Efficient and Effective tax administration

Making a multi-year commitment to research program

Make a multi-year commitment to research program to transform ITD into a research driven organization

Set up a research unit having a multi-disciplinary team coordinating efforts on tax research as an ongoing program

Set up Revenue Services Research Institute with physical and digital library and dedicated bandwidth

Develop research-driven methods to detect non-compliance and other aspects of tax administration

Encourage research relevant for tax administration by trainee officers at National Academy of Direct Taxes and other officers pursuing study leave

1. R. K. Tiwari2. Rajnish Kumar3. Tejinder Singh4. Pushpinder Singh Puniha5. K. K. Srivastava

6. R. Ramachandran7. V. Anandrajan8. Abhay Damle9. Dr. Vinay Kumar Singh10. Amitabh Kumar

Real Time Knowledge Management

i. Ascertaining knowledge requirements of ITD

Identify knowledge gap and ascertain knowledge requirements across functional areas of ITD

Identify sources of knowledge creation

Encourage the process of co-creation Develop institutional memory

ii. Developing mechanism for

Provide facility for online learning management system with facility for transmitting and storing webcasts and VOIP

Set up online discussion forum to discuss issues relating to tax

real time knowledge sharing

administration Set up mechanism of knowledge

sharing through formal & informal channelProvide for corporate subscription of judicial referencing system and economic data bases

Project Sponsor: Member (P & V)Functional Committee No 7: Committee on Ethical Standards



Ensuring that tax practitioners and departmental personnel adhere to professional standards

Administer effective system of sanctions for those who fail to follow the law

Make departmental personnel demonstrate exemplary ethical standards while implementing the tax laws

1. Sudha Sharma2. Surbhi Sinha3. S. K. Mishra4. B. K. Sinha5. Adarsh Modi

6. Nishi Singh

Project Sponsor: Member (P & V)Functional Committee No 8: Committee on Human Resource Development Initiatives



Aligning HR Strategy to Goals

Formulate a comprehensive HR strategy encompassing all aspects of personnel requirements and developments with a sound structure for HR Directorate

Conduct training needs analysis and invest in high quality training for overall development of personnel

Match job requirements with skill sets of employees for placements by developing Human Resource Information System (HRIS)

Conduct a detailed analysis of shortages of manpower and reasons thereof and come up with possible solutions

Consider a separate recruitment board for expeditious recruitment of staff

Expedite processing of cadre restructuring proposal and develop automatic mechanism for timely periodic evaluation

Create motivational climate for employees to excel by designing a career progression path

Encourage innovations at work Conduct an employee satisfaction

survey through an independent agency for ascertaining satisfaction level of departmental employees

1. Promila Bhardwaj2. Krishna Saini3. R. R. Singh4. Simar Singh Negi5. Nikhil Choudhary

6. Binay Kumar Jha

Project Sponsor: Member (IT)

Functional Committee No 9: Committee on Tax-exempt Entities


To provide Efficient and Effective tax

Developing mechanism for monitoring tax-

Develop a national data base of tax-exempt entities and list out their activities

Extend facilities for timely

1. S. P. Swain

2. P. V. Rao

3. R. M. Garg

administration exempt sector registration of the tax-exempt entities

Proactively address misuse of tax-exempt status

4. K. K. Tripathi

5. Raman Chopra

6. Pradip Mehrotra

Project Sponsor: Member (Revenue)

Functional Committee No 10: Committee on Collection strategy Initiatives


To formulate progressive tax policy&Efficient and Effective tax administration

Developing a Revenue Base and Forecasting model

Constitute an expert group for developing a revenue forecasting model


1. Anita Kapur

2. Ashok Bhardwaj

3. Sheba Bhattacharya

4. Sameer MukhopadhayDeveloping a Tax

Collection strategy Develop an annual collection plan

that would set targets and time standards for both current and arrear demand to be collected on the following basis:

d) Analysis of the nature of current and arrears demand to identify collection pattern

6. Ashutosh Dikhit

7. Sanjay Patra

8. Smita Jhingran

9. Ravi Agarwal

10. Ajay Kumar

e) Analysis of the tax records of taxpayers

f) Use of risk scoring techniques to create risk profiles of debtors

Develop effective procedures for writing off uncollectable tax arrears

Consider separation of assessment and collection function

11. Nitin Gupta

Strengthening partnership with tax practitioners; tax deductors; and third party partners

Constitute central and zonal Direct Tax Advisory Councils and make these fora effective through regular interaction

Disseminate information through tax practitioners and extend services to them

Strengthen partnership with tax deductors with proper handholding and education programs

Strengthen partnership with third party information providers with guidance

Devise standardized format for supply of third party data and create facility for electronic submission of data

Project Sponsor: Member, (A & J)Functional Committee No 11: Committee on Litigation Management Initiatives



Litigation Management Set up mechanism for putting an end to unproductive litigation

Implement appeal registry and strengthen appellate commissioner machinery for quicker disposal of appeals

Issue revenue rulings on important legal issues having wider ramifications

Complete work on the Judicial Referencing system on fast track and make it available to all personnel

1. A.K Jain

2. R.K Gupta

3. Anirudh Kumar

4. Yogesh Pandey

5. Vinodanand Jha

6. Ajay Goel

7. Ramesh Yadav

Core Drafting Committee

Coordinating Member

Name of the Committee Proposed Function Names of the Officers

Member (P&V) Core Drafting Committee Putting together the final draft of RFD on the basis of recommendations from various functional committees

1.Promila Bhardwaj

2.Nishi Singh

3.Binay Kr. Jha,

4.D. K. Gupta

5.R.K. Gupta

6.Ramesh Yadav

7.Nitin Gupta

8.Amitabh Kumar

9.Shishir Jha

10. Pradip Mehrotra

11. Parneet Singh Sachdeva

12. Sanjay Kumar

13. Suresh Kumar

14. D.S. Chawla

15. Nilimesh Baruah

16. Manoj Joshi

Results Framework Document of the Income-tax Department

Background Note

1. The Prime Minister had approved in September, 2009 a new mechanism for “Performance Monitoring and Evaluation System” (PMES) for all Government Ministries/Departments in India. Under this system, each Central Government Department is required to prepare a Results Framework Document (RFD) as per a set of Guidelines issued for this purpose.

The essence of PMES is that:

Each Department will prepare a Results-Framework Document (RFD) at the beginning of each year with the approval of the Minister concerned

RFD will represent an understanding between the Minister representing the people’s mandate and the Secretary to the Department responsible for implementing this mandate

RFD will set out the objectives of the Department and decide on the inter-se priority among the objectives

RFD will also contain the details of policies, programs and projects which are to be implemented to achieve the agreed objectives

Further, to measure progress in implementing these projects, RFD will contain details of targets and success indicators

1.1 During the Phase I of implementation of PMES (2009-2010), 59 Departments/Ministries were asked to prepare RFDs. In Phase II which was being implemented during the year 2010-2011, the system was extended to 62 departments and 760 responsibility centers (which are basically attached offices, subordinate offices and autonomous organizations) under these departments.

1.2 The High Power Committee (HPC) on Government Performance chaired by the Cabinet Secretary in its meting held on March, 11, 2011, decided to include the responsibility centres (RCs) under Department of Revenue in phase III of the RFD System. The RCs under department of revenue include the Income Tax Department (ITD), Customs & Central Excise and

Enforcement Directorate. ITD is required to prepare its RFD by 5th

March, 2012 for the year 2012-2013. The Results Framework of ITD will have to be submitted to the Cabinet Secretariat, by the 15the April of each year and the same is also required to be put up on the websites of the Department by 15the of April each year.

2. RFD process and Timelines for preparation

Beginning of the year

2.1 At the beginning of each financial year, with the approval of the Finance Minister, ITD will prepare RFD consistent with the RFD guidelines. Preparation of RFD will be based on answers to three simple questions:

1. RFD seeks to know what the organization’s key objectives are and their interse priorities

2. What actions department proposes to achieve these objectives? 3. How do we measure progress in implementing these actions?

The answer to these questions constitutes the core of the RFD.

During the year

2.2 After six months, the Results Framework as well as the achievements of ITD against the performance goals laid down at the beginning of the year will be reviewed by concerned administrative ministry/department. At this stage, the Results-Framework Documents may have to be reviewed and the goals reset if required, taking into account the priorities at that point of time. This will enable to factor in unforeseen circumstances and other developments in the Economy, such as drought conditions, natural calamities or epidemics etc. The Cabinet Secretariat will select RFDs of about 24 Responsibility Centres using a stratified random sampling procedure and get the same examined by the members of the Ad-hoc Task Force (ATF) along with RFDs for the parent department/ministry.

End of the year.

2.3 At the end of the year, the Department will have to review and prepare a report listing its achievements against the agreed results in

a prescribed format. This report is expected to be finalized by the 1st of May 2013. After scrutiny by the concerned administrative ministry/department, these results will have to be placed in the website of the Department by 1st of June 2013. The same cycle is to continue every year.

The following specific timelines have been laid down for 2012-2013 for ITD.

WHEN WHAT WHO

2012

March 5

Submit final draft of Results-Framework document to concerned administrative/department

ITD

2013

May 1 Submit year-end evaluation report on progress during the year

ITD

June 1 Place the evaluation result in the respective website

ITD

Mandatory Indicators:3. RFD to be prepared by the ITD must contain the following

mandatory indicators:

a. Timely submission of RFD for 2012-2013b. Timely submission of Results for 2012-2013c. Finalize a Strategic Plan for ITDd. Identify potential areas of corruption related to organisational

activities and develop an action plan to mitigate them.e. Implementation of Sevottam

(i) Create a Sevottam Compliant system to implement, monitor and review Citizen’s Charter

(ii) Create a Sevottam Compliant system to redress and monitor public grievances.

The total weight for the mandatory indicators in RFDs will be 11%.

RFD Format

4. The RFD document for the Income-tax Department is required to have the following six sections:-

Section 1 : Organization’s Vision, Mission, Objectives and Functions of ITD

Section 2 : Interse priorities among the key objectives, success indicators and targets in ITD

Section 3 : Trend values of the success indicatorsSection 4 : Description and definition of success indicators

and proposed measurement methodologySection 5 : Specific performance requirements from other

departments/organizations that are critical for delivering agreed results.

Section 6 : Outcome/Impact of activities of ITD 4.1 DGIT (Admn) had prepared the RFD of ITD for the financial year 2010-11. However, the preparation of RFD for ITD was not mandatory. But with effect from the financial year 2012-13, it is mandatory and the formal procedure laid down by the guidelines is to be followed in its preparations.

Coordinator for RFD:

5. Chairman, CBDT had nominated DIT (O&MS) as the coordinator for preparing the Results Framework Document (RFD) for the Income Tax Department for the Financial Year 2012-13. As per the Cabinet Secretariat Guidelines, the coordinator is to perform the following functions:

• Repository of all Information and Knowledge on Performance Management & Evaluation System (PMES) and RFD

• Departmental Link with the Cabinet Secretariat• Monitor key deadlines including Mandatory Indicators • Share knowledge and experience• Lead work on RFD• Select proper teams for preparation of RFD

Board Decision on RFD

6. A presentation on RFD was made before the full Board on 26-09-2011 and a Road Map for preparation of RFD was submitted. The following decisions were taken as per the minutes of the meeting dated 4-10-11:

(iv) Appropriate number of Committees may be formed to identify the key objectives and the inter-se priorities along with assignment of weights.


(v) In order to create awareness amongst officers/officials of the Department, a background note regarding RFD may be uploaded on the irsofficersonline.gov.in.


(vi) Each Zonal Member should have a Zonal Conference on the subject during which the DIT (O&MS) may make a presentation, so that the importance of this issue is underlined.

[Action: All Members of CBDT/DIT (O&MS)]

Strategic Plan and RFD

7. Starting point of the RFD exercise is the Vision Document of ITD. The planning hierarchy is explained through the following sequence:

7.1 As can be seen from the planning hierarchy, RFD represents the implementation leg for the Vision, Long term Strategy and the Strategic 5 year plan of the ITD. While approving the Vision 2020 document vide minutes of the Board meeting No 15/2010 dated 23-11-2011, CBDT had asked to put up an implementation plan. As part of that exercise under the guidance of then Member (R), various projects were identified.

7.2 The chapter 4 on Strategic Plan of the Vision 2020 document contains three macro projects under the three enablers mentioned in the Vision statement, namely, Formulation of Progressive Tax Policy, Efficient & Effective Administration and Improving

Voluntary Compliance. There are a number of Action Points under the three macro areas. As part of the exercise, a chart was prepared by clubbing various Action Points and listing them under each of the Members of the Board as per the current allocation of work. In case of overlapping jurisdictions, one of the Members is taken as the project sponsor for the convenience of coordination. The Chart mapping the 3 strategic objectives, sub-goals, action points and the project sponsor is enclosed at Annexure I.

7.3 RFD is aimed at improving performance of the Department through the mechanism of performance agreement, thereby making the top management accountable. It is expected that the accountability will be percolated down to all levels through the ‘trickle-down effect’.

The Performance Management and Evaluation System (PMES) on which RFD is based, takes a comprehensive view of an organizational performance. Hence, RFD is supposed to incorporate all expected deliverables of an organization, namely, physical, quantitative, qualitative, static efficiency (Short-term) and dynamic efficiency (long-term). The performance under this system is to be reduced to a composite score giving a single unified view of the organizational performance. Hence, it is important to cover all the representative functional areas in the RFD document having a bearing on the overall performance of the Department.

Course of actions, Timelines for completing the RFD document:

7.4. The RFD document in the form of a Performance agreement is to be finalized by 5th March 2012 after approval from the Finance Minister through the Revenue Secretary as per the guidelines. Prior to finalization of the document, department-wide consultation is required. Therefore, timelines have to be fixed for finalization of the RFD document well before the deadline of 5th March 2012.

First step is to write letters to all the cadre-controlling CCsIT & DGsIT/ officers and staff associations along with a detailed background note soliciting suggestions by 20th December 2011on the following broad issues:


What operational goals to be determined from the 3 strategic objectives?

What relative weights to be put for each of these objectives? How do we align the RFD document with the ‘Annual Action

Plan’ within the overall framework of the five year ‘Strategic Plan ‘?

Do we draw up separate RFDs for the Chief Commissioners at the cadre-controlling levels for the goals to be achieved by the field officers?

Identification of Project Implementation teams Recommendation on Selection of Success Indicators and

milestones for measuring success within the framework of suggested guidelines


7.5 After identification of ‘Action Points’ as summarized in Annexure I, the next step would be to set up various functional committees to draw up the structure of the RFD for various functional areas. The following 11 functional committees have been identified on the basis of clubbing functional areas reflecting the allocation of work to different Members of CBDT:

Functional Committees Project Sponsor

12. Committee on International tax & Transfer Pricing Initiatives Chairman, CBDT13. Committee on taxpayer service Initiatives Chairman,

CBDT14. Committee on Infrastructure & Financial Management Initiatives Chairman,

CBDT15. Committee on Strategic Technology Initiatives Member (L&C)16. Committee on Enforcement Initiatives Member (Inv)17. Committee on Research Initiatives & Knowledge Management Member

(P&V)18. Committee on Ethical Standards Member

(P&V)19. Committee on Human Resource Development Initiatives Member

(P&V)20. Committee on Tax-exempt Entities Member (IT)21. Committee on Collection Strategy Initiatives Member (R)22. Committee on Litigation Management Initiatives Member (A

&J)

Since monitoring and evaluation is an important aspect of RFD process, a new results-based monitoring and evaluation system has to be put in place. The necessary pre-condition for such a system to work, is to have a Management Information Systems (MIS). Hence, development of robust MIS is taken as one of the sub-goals for the “Strategic technology initiatives” committee.

7.6 The terms of reference for the functional committees could be as under:

Consult field officers, Officers & Staff Associations Making Recommendations on aligning Annual Action Plan

with the Strategic Plan 2011-15 Which ‘Action Points’ should be included in the RFD

document and which are to be made part of the Annual Action Plan?

Operationalisation of Strategic Objectives with measurable goals in respect of the various ‘Action Points’

Recommendations in respect of the weightage to be assigned to the objectives in a given functional area

Coming up with implementation plans for the ‘Action Points’

Identification of Project Implementation teams Development of success indicators and specific milestones

for measuring progress

The functional committees are to submit their reports for the respective functional areas through the project sponsor by 31st

December 2011.

7.7 It is further proposed that a core drafting committee is also constituted which will put together the final RFD document incorporating recommendations from various functional committees and from field formations.

7.8. Prior to finalization of the draft document by the core drafting committee, it is proposed to organize a two-day workshop on preparation of RFD to discuss all the recommendations and the draft RFD prepared sometime in the 2nd week of January, 2012. DOMS has been organizing an annual workshop for the last 3 years on

“Innovation in Public Administration”. The proposed workshop could be part of the series.

The core committee will submit the final draft by 25th January 2012 so that the document could be presented before the full Board in the first week of February, 2012.

Roadmap for preparation of RFD

8. The following course of actions with time lines has been proposed for the preparation of RFD for ITD:

Soliciting suggestions from field officers and the CBDT’s attached Directorates

To be received latest by 20th December, 2011

Inviting suggestions from Staff & Officers associations

To be received latest by 20th December, 2011

Preparation of RFD Holding of Zonal Conferences by the concerned zonal Members to sensitize filed officers

November – 1st Week of December, 2011

Setting up various committees with representations from field officers from different geographical locations to come up with recommendations on the content of the RFD after department-wide consultations

Recommendations to be, received from functional committees latest by 31st

December, 2011

Organizing a two-day workshop before finalization of RFD

Sometime in the 2nd Week of January, 2012

Preparation of Final Draft by Core drafting committee

Latest by 25th January, 2012

Inclusion of suggestion and preparation of revised Draft RFD Document based on the deliberation of two days workshop

Latest by 31st of January, 2012

Full Board meeting on Draft RFD Document Sometime in the 1st Week of February, 2012

Submission of Final Draft of RFD Document to concerned Administrative Ministry/ Department

2nd week of February, 2012

8.1 All documents relating to the preparation of RFD would be uploaded to irsofficeronline.gov.in immediately with a view to invite suggestions from the field officers regarding objectives to be put in the RFD within the framework of the Strategic Plan 2011-15.

Criteria for Selecting Success Indicators:

9. Since RFD framework goes beyond the output to cover both “Outcome” and “Impact”, identification of appropriate success indicators with specific timelines for measuring progress in implementation of these projects, is an integral part of RFD process. There are 3 mandatory success indicators as per the RFD guidelines; namely, Preparation of a Strategic

Plan, Sevottam-compliant systems for implementation of citizen’s charter & grievance redressal and an action plan to mitigate corruption to be achieved by specific dates.9.1 RFD guidelines provide 2 set of criteria SMART & CREAM for selecting the success indicators as explained below:

SMART:Specific : Clear as to what it is that is being aimed to achieveMeasurable : Clear and transparent measure of successAchievable : Target which is stretched and reflects the

department’s ambitions for improved standards of public services, based on some evidence that demonstrates what is possible

Relevant : Target that reflects what the department is trying to achieve and not simply what is easily measurable

Timed : Clear as to when the target should be delivered by

CREAM:Relevant : Appropriate to the subject at handEconomic : Available at a reasonable costAdequate : Provide a sufficient basis to assess performanceClear : Precise and unambiguousMonitorable: Amenable to independent validation

These guidelines may be kept in mind while making recommendations on the success indicators. Selection of success indicators will play a critical role in improving both static and dynamic efficiency of the Department. Accordingly, the indicators will have to be very carefully selected.

10. RFD is aimed at improving performance of the Department through the mechanism of performance agreement. The Performance Management and Evaluation System (PMES) on which RFD is based, takes a comprehensive view of an organizational performance. Once the RFD at the macro level is prepared during the financial year 2012-13, it is proposed that the Directorate of HRD may be given the responsibility of marrying the macro and the micro aspects of performance management in the department by developing a new system of performance management for individual employees and groups.

------

RFD (Result Framework Document)

for Central Board of Direct Taxes

Department of Revenue2010-11

TABLE OF CONTENTS

Sl. No. Title Page

1. Overview 3

2. Section 1- Vision, Mission, Objectives and Functions

5

3. Section 2 - Inter-se priorities among key Objectives,

Success indicators and targets 7

4. Section 3 - Trend Values of the Success Indicators 11

5. Section 4 - Description & Definition of Success Indicators

and proposed measurement methodology 14

6. Section 5 - Specific performance requirements from

other Departments that are critical for delivering agreed results 15

RFD

OVERVIEW

The Results-Framework Document (RFD) of the Central Board of Direct Taxes, Department of Revenue, Government of India for the Financial Year 2010-11 reflects the vision, mission, objectives, functions and performance obligations of the income tax department. These commitments support the efforts to dynamically improve the performance in different aspects of taxpayer services and revenue mobilisation programmes being implemented by this Department across the country.

We have reviewed and reshaped our priorities.

The Central Board of Direct Taxes has carefully reviewed its priorities with a view to sharpen the different mechanism for achieving focused, effective and meaningful implementation of the taxpayer services and revenue mobilisation programmes of the Department.

We are working towards: Upholding our commitments for the nation building

process through progressive tax policy Continue ensuring effective vigilance and monitoring

for the implementation of the tax collection and taxpayer services programmes

Remove the bottlenecks detected so far in the smooth and effective implementation of these programmes

Capitalise on the positive results achieved so far with a view to ensure further tax growth

Inculcating a healthy tax culture, where the taxpayers and the tax collectors discharge their obligations with the sense of responsibility towards nation building

We have changed how we do business

To be successful in our priorities we are working towards:

Equity and transparency Promoting taxpayer awareness towards voluntary

compliance, by educating taxpayers and citizens about tax laws

Effective deterrence against tax evasion Providing information, forms and other assistance at

the facilitation counters and also on the website Continuous research as the foundation of tax policy and

administration; and Adopting technology as an enabler for improved service

delivery

Increasing Direct Tax Collections (Rs. in Crore)2000-01 068305

2001-02 069198

2002-03 083088

2003-04 105088

2004-05 132771

2005-06 165208

2006-07 230184

2007-08 312213

2008-09 333828

2009-10 377982

SECTION 1

VISION

To partner in the nation building process - through progressive tax policy, efficient and effective implementation; and improved voluntary compliance.

MISSION

To formulate progressive tax policies To make compliance easy To enforce tax laws with fairness To deliver quality services To continuously upgrade skills and build a professional

and motivated workforce

OBJECTIVES Collection of Income Tax & Corporate tax as a

significant & growing portion of the Govt’s revenue receipts

Implementation of Sevottam Compliant Citizen’s Charter & Public Grievance Redress Mechanism

Speedy & Fair Disposal of Pending Income Tax Appeals Efficient Manpower Management & HRD in the Income

Tax Department State of the art infrastructure to facilitate efficient

delivery system & pleasant environment for tax payers & administrators

FUNCTIONS OF CENTRAL BOARD OF DIRECT TAXES:

CBDT is the statutory authority functioning under the Central Board of Revenue Act, 1963. The officials of the Board in their ex-officio capacity also function as a Division of the Ministry of Finance, dealing with matters relating to levy and collection of direct taxes.

CBDT is the apex body charged with the administration of direct taxes. The functions performed by CBDT (with the help of various Chief Commissioners and Director Generals of Income Tax under its administrative control) are:

Formulating the policy regarding direct tax laws and their implementation

Assessment and collection of direct taxes; developing strategy for revenue enhancement; recovery of taxes; widening of tax base

Framing and implementing the general policy regarding o Organisation of the set-up and the structure of the

Income-tax departmento Methods and procedures of the work of the

Income-tax departmento Measures for disposal of assessments, collection of

taxes, prevention and detection of tax evasion and tax avoidance

o Recruitment, training and other matters pertaining to service conditions and career prospects of the personnel of the Income-tax department

o Grant of rewards and appreciation certificates, including sammaan awards to taxpayers

o Infrastructure requirements of the Income-tax department

o Computerisation of the Income-tax department Operating the first appellate machinery comprising of

Commissioners of Income tax (Appeals) to perform the work of disposal of appeals against the orders of the assessing officers

Having an investigation machinery with the aim to curb tax evasion and unearth unaccounted money

Coordination with the other investigation and enforcement agencies

Handling the taxpayers grievances Dissemination of information relating to direct taxes

Section-2Table-1: Inter-se priorities among key Objectives, Success

indicators and targets for 2010-11Column 1 Column

2Column 3 Column 4 Column 5

Objective Weight Actions Success Indicator Unit WeightExcellent

100%

Objective1: Collection of Income Tax & Corporation tax as a significant & growing portion of the Govt’s revenue receipts

.40

Net Tax Collection during the year

Net Tax Collection during the year as a % of the budget targets i.e. Rs 430000 crore

Rs in crores(%of the budget targets)

.6 421400(98%)

90%

Recovery of Arrear Demand

Cash collection as a % the arrear demand target i.e. Rs 13906 crore

Rs in crores(% of the budget targets)

.2 13906(92%)

90%

Collection of Tax from Tax Deducted at Source (TDS)

TDS Collection during the year as a % of the target value (40% of Total Collections i.e. Rs 172000 crore)

Rs in crores(%of the targets)

.2 167700(97.5%)

95%

Objective 2:Implementation of Sevottam Compliant Citizen’s Charter & Public Grievance Redress Mechanism

.20

Create a Sevottam Compliant system to implement, monitor & review Citizen’s Charter

Completion of Activity for 3 ASK (Aayakar Sampark Kendras) centres & replication for 10 others

Date of Completion

.4 March 31, 2011

--

Create a Sevottam Compliant system to redress & monitor Public Grievances

Completion of Activity for 3 ASK (Aayakar Sampark Kendras) centres & replication for 10 others

Date of Completion

.4 March 31, 2011

--

Independent Audit of Implementation of Citizen’s Charter

Independent Rating of Implementation of Citizen’s charter

Rating score by the Independent agency, as per the Sevottam evaluation methodology

.1 100 95

Independent Audit of Implementation of Public Grievance Redress System

Independent Rating of Implementation of Public Grievance Redress Mechanism


.1 100 95

Objective 3: Speedy Disposal of Pending Income Tax Appeals

.15

Disposal of pending (as on 1.4.2010) High demand appeals i.e. Basket-1 appeals (involving disputed demand of Rs 10 lakh or above)

No. of Basket 1 Appeals disposed as a % of achievable disposal figures as per the Action Plan 2010-11 (i.e. 38373)

% disposal .5 85%*/** 80%

Disposal of Income tax appeals other than HD appeals filed before 1.04.09 i.e. Basket-2 appeals

No. of Basket 2 Appeals disposed as a % of achievable disposal figures as per the Action Plan 2010-11(i.e. 37153)

% disposal .3 85%*/** 80%

Disposal of Income tax appeals other than HD appeals filed between 1.04.09 -31.3.2010 i.e. Basket-3 appeals

No. of Basket 3 Appeals disposed as a % of achievable disposal figures as per the Action Plan 2010-11(i.e. 20761)

% disposal .2 85%*/** 80%

Objective 4:Efficient Manpower Management & HRD

.15

Setting up of a Human Resource Information System (HRIS)

Identifying the parameters for HRIS, formulation of preliminary estimates and obtaining govt sanction for expenditure

Completion of activity, by date

.20 Feb 15, 2011 Feb 28, 2011

Follow up of the Cadre review of the Income Tax Department

Providing required clarifications on queries by other departments within 2 weeks

% of timely replies

.20 100% 90%

Preparation of region-wise deployment plan


Jan. 31, 2011 Feb 15, 2011

Removing workforce shortage

Report of Task Force for recommending ways to overcome endemic shortage in the cadre of Stenographers & approval thereof


.20 Dec 31, 2010 Jan. 15, 2011

Approval of setting up of Alternative Recruitment Machinery for special drive to overcome workforce shortage

Jan. 31, 2011 Feb 15, 2011

Advanced Mid Career Training Scheme for IRS officers

Designing of course contents, selection of partner institutions & finalisation of training calendar & Selection of participants


.20 Dec31, 2010 Jan. 15, 2011

Commencement of training Feb 15, 2011 Feb 28, 2011

Resolving Service related disputes

Setting up a dispute resolution machinery for examination of individual cases

Submission of reports after examination of cases referred by the CBDT (%)

.10 100% 90%

Revision of recruitment rules

Submission of revised recruitment rules by 31.3.2011

% of employee categories covered

.10 100% 90%

Objective 5: State of the art infrastructure to make efficient delivery system & pleasant environment for tax payers & administrators

.10

Acquisition of Office space

Acquisition of 60000 sq mtr office space planned in the year ending 31.03.2011

Acquisition as a % of target

.6 85% 80%

Construction of residential units for officials of the department (Type IV, V & VI)

Construction of Approx 100 houses in all 3 categories

No of Units Constructed

.2 70 60

Upgradation of training infrastructure of the department (NADT & RTIs)

Upgradation of the NADT & State of the art infrastructure in one of the RTIs in the year ending 31.03.2011

No of upgradations (NADT+RTI)

.2 1+1(NADT & at least 1 RTI)

1(NADT only)

*The rating is considered as Excellent at 85% achievement of the target of disposal of appeals because the Department is still to provide the requisite manpower/infrastructural support.**This target will be reviewed in January 2011.Note: As per Section V of the “Guidelines for Results-Framework Document (RFD) for April 1, 2010-March 31, 2011”, issued by the Cabinet Secretariat, Government of India (page-12, copy at Annexure-I), each RFD must contain the following mandatory indicators, with 11% combined weight, to promote enhanced and sustainable departmental performance levels:

1. Efficient functioning of the RFD System (5% weight)(a) Timely submission of Draft for Approval (2% weight)(b) Timely submission of Results (1% weight)(c) Finalisation of a Strategic plan (2% weight)

2. Improving internal efficiency/responsiveness/service delivery of the Ministry/Department (6% weight)

(a) Develop RFDs for all Responsibility Centers (subordinate offices/autonomous bodies etc) (2% weight)(b) Implementation of Sevottam (4% weight)

It is stated that since the department is not among the Ministries/Departments included in the first phase for implementation of the system of monitoring and evaluation of performance and since the RFD concept is being voluntarily implemented in the CBDT with implementation being monitored by the Board itself, criteria at 1 (a)(b)(c) and 2 (a) above are not applicable for the year 2010-11, and shall become applicable only when the RFD concept is officially introduced. Criterion 2(b) has already been comprehensively included at Objective-2 in Table-1 above.

Section-3Table-2: Trend Value of the Success

IndicatorsColumn 1 Column 3 Column 4

Objective Actions Success Indicator UnitActual Value

for FY 08/09

Actual

Value for

FY 09/10

Objective1: Collection of Income Tax & Corporate tax as a significant & growing portion of the Govt’s revenue receipts

Net Collection during the year Net Collection during the year as a % of the budget targets

Rs in crores(%of the budget targets)

333828

(98% of

Target)

377982

(98% of

Target)

Recovery of Arrear Demand Cash collection as a % the arrear demand

Rs in crores(% of the budget targets)

10016 (81% of Target)

11939 (91% of Target)

Collection of Tax from Tax Deducted at Source (TDS)

TDS Collection during the year (% of Total Collections)

Rs in crores(%of the total collections)

133000(39.3%)

143319(38%)

Objective 2:Implementation of Sevottam Compliant Citizen’s Charter & Public Grievance Redress Mechanism

Create a Sevottam Compliant system to implement, monitor & review Citizen’s Charter

Completion of Activity Completion of Activity for 3 ASK (Aayakar Sampark Kendras) centres & replication for 10 others

## ##

Create a Sevottam Compliant system to redress & monitor Public Grievances

Completion of Activity Completion of Activity for 3 ASK (Aayakar Sampark Kendras) centres & replication for 10 others

## ##

Independent Audit of Implementation of Citizen’s Charter

Independent Rating of Implementation of Citizen’s charter


## ##

Independent Audit of Implementation of Public Grievance Redress System

Independent Rating of Implementation of Public Grievance Redress Mechanism


## ##

Objective 3: Speedy Disposal of Pending Income Tax Appeals

Disposal of pending (as on 1.4.2010) High demand appeals (involving disputed demand of Rs 10 lakh or above)

No. of Basket 1 Appeals disposed

No. of disposals 15701 14411

Disposal of Income tax appeals other than HD appeals

No. of Basket 2 & Basket 3 Appeals disposed

No. of disposals 50650 51926

Objective 4:Efficient Manpower Management & HRD

Setting up of a Human Resource Information System (HRIS)

Identifying the parameters for HRIS, formulation of preliminary estimates and obtaining govt sanction for expenditure


## ##

Follow up of the Cadre review of the Income Tax Department

Providing required clarifications on queries by other departments within 2 weeks

% of timely repliesCompletion of activity, by date

## ##

Preparation of region-wise deployment plan

Removing workforce shortage Report of Task Force for recommending ways to overcome endemic shortage in the cadre of Stenographers & approval thereof


## ##

Approval of setting up of Alternative Recruitment Machinery for special drive to overcome workforce shortage

Advanced Mid Career Training Scheme for IRS officers

Designing of course contents, selection of partner institutions & finalisation of training calendar & Selection of participants


## ##

Commencement of training

Resolving Service related disputes Setting up a dispute resolution machinery for examination of individual cases

Submission of reports after examination of cases referred by the CBDT (%)

## ##

Revision of recruitment rules Submission of revised recruitment rules by 31.3.2011

% of employee categories covered

## ##

Objective 5: State of the art infrastructure to make efficient delivery system & pleasant environment for tax payers & administrators

Acquisition of Office space Acquisition of 60000 sq mtr office space

Acquisition as a % of target

38467 sq mtr 87396 sq mtr

Construction of residential units for officials of the department (Type IV, V & VI)

Construction of Approx 100 houses in all 3 categories

No of Units Constructed

142 21

Upgradation of training infrastructure of the department (NADT & RTIs)

Upgradation of the

NADT & State of the

art infrastructure in one

of the RTIs

No of upgradations (NADT+RTI)

Construction

of hostel at

NADT for

officers at a

cost of Rs

24.10 cr

## New activity/activities e.g. Sevottam is a new scheme, introduced only w.e.f. 2010-11

@ One time activity/activities

* In addition, 1 lakh sq ft each is targeted to be acquired at Pune & Manesar for CPC **1.Advance Training Centre at NADT ; 2. Acquired land at Mohali to construct RTI; 3. Latest Audio-Visual Equipments for conference Room at RTI Bangalore at Rs 2 cr

Section 4

Description of Success indicators and measurement methodology

All the success indicators are self-explanatory and data on Success Indicators are to be captured either internally in the Board or obtained from the various Directorates like the DG(Admn), DG(HRD), Directorate of Infrastructure, DO&MS, etc.

Section 5

Specific performance requirement from other Departments for various Programmes

Department(s) from whom support needed Type of Support needed

IFU of the Deptt. of Revenue; Deptt of Expenditure: For Infrastructure related objectives/actions Approval of Infrastructure Plans and financial sanction of the project expenditure

Ministry of Urban development Funds release via CPWD for ensuring timely execution of the Infrastructure projects to be executed through CPWD & for timely concurrence under the FR/SR for Infrastructure projects to be executed through private contractors

DOPT, Deptt of Expenditure, UPSC and SSC: For HRD related objectives/actions i.e. Support in respect of cadre review, amendment of recruitment rules, reducing

manpower shortages, timely filling up the posts of various cadres and timely DPCs for promotions in the Department

of 15GUIDELINES FOR DESIGNINGRESULTS-FRAMEWORK DOCUMENT (RFD)FOR RESPONSIBILITY CENTRES (RCS)April 1, 2012 – March 31, 2013Performance Management DivisionCA B I N E T S E C R E T A R I A TGovernment of IndiaPage 2 of 15GUIDELINES FORRESULTS-FRAMEWORK DOCUMENT (RFD) 2012-2013FOR RESPONSIBILITY CENTRES (RCS)BackgroundThe Prime Minister approved the outline of a “Performance Monitoring and EvaluationSystem (PMES) for Government Departments” vide PMO I.D. No. 1331721/PMO/2009-Poldated 11.9.2009. Under PMES, each department is required to prepare a Results-FrameworkDocument (RFD).A RFD provides a summary of the most important results that a organization expects toachieve during the financial year. This document has two main purposes: (a) move the focusof the organization from process-orientation to results-orientation, and (b) provide anobjective and fair basis to evaluate organization ’s overall performance at the end of the year.The following Guidelines are divided into three broad sections: (I) Format of RFD; (II)Methodology for Evaluation; and (III) RFD Process and TimelinesI. Format of Results-Framework DocumentA Results-Framework Document (RFD) is essentially a record of understanding between aDepartment/Ministry representing the people’s mandate, and the Head of the organisationresponsible for implementing this mandate. This document contains not only the agreedobjectives, policies, programs and projects but also success indicators and targets to measureprogress in implementing them. To ensure the successful implementation of agreed actions,RFD may also include necessary operational autonomy.In the case of the Responsibility Centres (attached offices, subordinate offices, andautonomous organizations), the RFD will represent a record of understanding between theparent department / ministry and the Responsibility Centre.The RFD seeks to address three basic questions: (a) What are organisation’s main objectivesfor the year? (b) What actions are proposed to achieve these objectives? (c) How wouldsomeone know at the end of the year the degree of progress made in implementing theseactions? That is, what are the relevant success indicators and their targets?The RFD should contain the following five sections:Section 1 Organisation’s Vision, Mission, Objectives and Functions.Section 2 Inter se priorities among key objectives, success indicators and targets.Section 3 Trend values of the success indicators.Section 4 Description and definition of success indicators and proposed measurementmethodology.

Section 5 Specific performance requirements from other departments/organisations that arecritical for delivering agreed results.Page 3 of 15Section 1: Organisation’s Vision, Mission, Objectives and FunctionsThis section provides the context and the background for the Results-Framework Document.Creating a Vision and Mission for an organisation is a significant enterprise. Ideally, Visionand Mission should be a by-product of a strategic planning exercise undertaken by theorganization. Both concepts are interrelated and much has been written about them inmanagement literature. Here we will provide some working guidelines to write this section ofthe RFD.A Vision is an idealized state for the organisation. It is the big picture of what the leadershipwants the organisation to look like in the future.The organization’s Mission is the nuts and bolts of the vision. Mission is the who, what andwhy of the organisation existence.Vision is a symbol, and a cause to which we want to bond the stakeholders, (mostlyemployees and sometime other stake-holders). As they say, the people work best, when theyare working for a cause, than for a goal. Vision provides them that cause.Vision is a long-term statement and typically generic and grand. Therefore a vision statementdoes not change from year to year unless the organisation is dramatically restructured and isexpected to undertake very different tasks in the future.Vision should never carry the 'how' part of vision. For example ' To be the most admiredbrand in Aviation Industry' is a fine vision statement, which can be spoiled by extending it to'To be the most admired brand in the Aviation Industry by providing world-class in-flightservices'. The reason for not including 'how' is that the 'how' part of the vision may keep onchanging with time.Writing up a Vision statement is not difficult. The problem is to make employees engagedwith it. Many a time, terms like vision, mission and strategy become more a subject of scornthan being looked up-to. This is primarily because leaders may not be able to make aconnection between the vision/mission and people’s every day work. Too often, employeessee a gap between the vision, mission and their goals and priorities. Even if there is avalid/tactical reason for this mismatch, it is not explained. The leadership of the organisationshould therefore consult a wide cross section and come up with a Vision that can be ownedby the employees of the organisation.Vision should have a time horizon of 5-10 years. If it is less than that, it becomes tactical. If ithas a horizon of 20+ years (say), it becomes difficult for the strategy to relate to the vision.Features of a good vision statement: Easy to read and understand. Compact and crisp to leave something to people’s imagination. Gives the destination and not the road-map. Is meaningful and not too open ended and far-fetched. Excites people and makes them feel energized. Provides a motivating force, even in hard times.Page 4 of 15 Is perceived as achievable and at the same time is challenging and compelling,stretching us beyond what is comfortable.The entire process starting from the Vision down to the objectives is highly iterative. Thequestion is from where we should start? We strongly recommend that vision and missionstatement should be made first without being colored by constraints, capabilities and

environment. It is akin to the vision of several armed forces: 'Keeping the country Safe andSecure from external threats'. This vision is non-negotiable and it drives the organization tofind ways and means to achieve their vision, by overcoming constraints on capabilities andresources. Vision should be a stake in the ground, a position, a dream, which should beprudent, but should be non-negotiable barring few rare circumstances.Mission follows the Vision:We strongly recommend that mission should follow the vision. This is because the purpose ofthe organization could change to achieve their vision. Organisation’s mission is the nuts andbolts of the vision. Mission is the who, what and why of your organisation’s existence. Thevision represents the big picture and the mission represents the necessary work.Mission of the organisation is the purpose for which the organisation (or RC) exists. It is inone way the road to achieve the vision.Objectives:Objectives represent the developmental requirements to be achieved by the organisation in aparticular sector by a selected set of policies and programmes over a specific period of time(short-medium-long). For example, objectives of the Ministry of Health & Family Welfarecould include: (a) reducing the rate of infant mortality for children below five years; and (b)reducing the rate of maternity death by (30%) by the end of the development plan.Objectives could be of two types: (a) Outcome Objectives address ends to achieved, and (b)Process Objectives specify the means to achieve the objectives. As far as possible, theorganisation should focus on Outcome Objectives.Objectives should be directly related to attainment and support of the relevant nationalobjectives stated in the relevant Five Year Plan, National Flagship Schemes, and relevantsector and organisational priorities and strategies, President’s Address, the manifesto, andannouncement/agenda as spelt out by the Government from time to time.Objectives should be linked and derived from the Organisation’s Vision and Missionstatements.The functions of the organisation should also be listed in this section. These functions shouldbe consistent with the allocation of business for the organisation.Page 5 of 15Section 2: Inter se priorities among key objectives, success indicators and targets.The heart of the Section 2 of the RFD document consists of the Table 1. In what follows wedescribe the guidelines for each column of this Table.Column 1: Select Key Organisation ObjectivesFrom the list of all objectives, select those key objectives that would be the focus for thecurrent RFD. It is important to be selective and focus on the most important and relevantobjectives only.Table 1: Format of the Results-Framework Document (RFD)Column 1 Column 2 Column 3 Column 4 Column 5 Column 6Objective Weight Actions SuccessIndicator Unit WeightTarget / Criteria ValueExcellent VeryGoodGood Fair Poor100% 90% 80% 70% 60%Objective 1Action 1Action 2

Action 3Objective 2Action 1Action 2Action 3Objective 3Action 1Action 2Action 3Column 2: Assign Relative Weights to ObjectivesObjectives in the RFD should be ranked in a descending order of priority according to thedegree of significance and specific weights should be attached to these objectives. The Headof the organisation will decide the inter se priorities among organisational objectives and allweights must add to 100.Column 3: Specify Means (Actions) for Achieving Organisation ObjectivesFor each objective, the organisation must specify the required policies, programmes, schemesand projects. Often, an objective has one or more policies associated with it. Objectiverepresents the desired “end” and associated policies, programs and projects represent thedesired “means.” The latter are listed as “actions” under each objective.Page 6 of 15Column 4: Specify Success IndicatorsFor each of the “action” specified in Column 3, the organization must specify one or more“success indicators.” They are also known as “Key Performance Indicators (KPIs)” or “KeyResult Areas (KRAs)” A success indicator provides a means to evaluate progress inachieving the policy, programme, scheme and project. Sometimes more than one successindicator may be required to tell the entire story.Success indicators are important management tools for driving improvements in organisationperformance. They should represent the main business of the organization and should also aidaccountability. If there are multiple actions associated with an objective, the weight assignedto a particular objective should be spread across the relevant success indicators.Success indicators should consider both qualitative and quantitative aspects of organisationperformance.In selecting success indicators, any duplication should be avoided. For example, the usualchain for delivering results and performance is depicted in Figure 1. An example of thisresults chain is depicted in Figure 2.If we use Outcome (increased literacy) as a success indicator, then it would be duplicative toalso use inputs and activities as additional success indicators.Ideally, one should have success indicators that measure Outcomes and Impacts. However,sometimes due to lack of data one is able to only measure activities or output.Column 5: Assign relative Weights to Success IndicatorsIf we have more than one action associated with an objective, each action should have one ormore success indicators to measure progress in implementing these actions. In this case wewill need to split the weight for the objective among various success indicators associatedwith the objective.Results-Based Management:Adult LiteracyOutcomes • Increased literacy skill; moreemployment opportunitiesOutputs • Number of adults completingliteracy coursesActivities • Literacy training courses

Inputs • Facilities, trainers, materialsGoal(Impacts)• Higher income levels;increase access to higherskill jobsResults-Based ManagementOutcomes • Intermediate effects ofoutputs on clientsOutputs • Products and servicesproducedActivities• Tasks personnelundertake to transforminputs to outputsInputs • Financial, human, andmaterial resourcesGoal(Impacts)• Long-term, widespreadimprovement in societyImplementation Results

Figure 2: An Example Figure 1: Typical Results Chain of Results ChainPage 7 of 15Column 6: Specify Targets for Success IndicatorsThe next step is to choose a target for each success indicator. Targets are tools for drivingperformance improvements. Target levels should, therefore, contain an element of stretch andambition. However, they must also be achievable. It is possible that targets for radicalimprovement may generate a level of discomfort associated with change, but excessivelydemanding or unrealistic targets may have a longer-term demoralizing effect.The target should be presented as the following five-point scaleExcellent Very Good Good Fair Poor100 % 90% 80% 70 % 60 %It is expected that budgetary targets would be placed at 90% (Very Good). For anyperformance below 60%, the organization would get a score of 0%.Section 3: Trend values of the success indicatorsFor every success indicator and the corresponding target, RFD must provide actual values forthe past two years and also projected values for two years in the future.Table 2: Trend Value for Success IndicatorsObjective Actions SuccessIndicator UnitActualValueforFY10/11ActualValueforFY11/12TargetValueforFY12/13

ProjectedValueforFY 13/14ProjectedValueforFY 14/15Objective1Action 1Action 2Action 3Objective2Action 1Action 2Action 3Objective3Action 1Action 2Action 3Page 8 of 15Section 4: Description and definition of success indicators and proposedmeasurement methodology.RFD must contain a section giving detailed definitions of various success indicators and theproposed measurement methodology. Wherever possible, the rationale for using the proposedsuccess indicators may be provided.Section 5 Specific performance requirements from other agencies that are critical fordelivering agreed results.This section should contain expectations from other agencies that impact on theorganisation’s performance. These expectations should be mentioned in quantifiable, specific,and measurable terms.Section 6 Outcome / Impact of activities of organisationThis section should contain the broad outcomes and the expect impact the organisation (orRC) has on national welfare. This section should capture the very purpose for which theorganisation / RC exits.This section is included for information only and to keep reminded us not only the purpose ofthe existence of the organisation / RC but also the rationale for undertaking the RFD exercise.The evaluation will be done against the targets mentioned in Section 2. The whole point ofRFD is to ensure that RCs ( organisations) serve the purpose for which they were created inthe first place.The required information under this section should be entered in Table 3. The Column 2 ofTable 3 is supposed to list the expected outcomes and impacts. It is possible that these arealso mentioned in the other sections of the RFD. Even then they should be mentioned here forclarity and ease of reference. For example, the purpose of Department of AIDS Control

would be to Control the spread of AIDS. Now it is possible that AIDS control may requirecollaboration between several departments like Health and Family Welfare, Information andBroadcasting, etc. In Column three all departments / ministries / RCs jointly responsible forachieving national goal are required to be mentioned. In Column 4 organization is expect tomention the success indicator (s) to measure the organizational outcome or impact. In thecase mentioned, the success indicator could be 5 of Indians infected with AIDS. Column 5 to9 give the expected trend values for various success indicators.Page 9 of 15Section 6: Outcome / Impact of activities of organisation1 2 3 4 5 6 7 8 9S.NoOutcome / Impact oforganisation /RCJointly responsible forinfluencing this outcome /impact with the followingorganisation (s) /departments/ministry(ies)SuccessIndicator(s)2010-20112011-20122012-20132013-20142014-2015Page 10 of 15II. Evaluation MethodologyAt the end of the year, the parent department/ministry will look at the achievements of theorganisation, compare them with the targets, and determine the composite score. Table 4provides an example from the health sector. For simplicity, we have taken on one objectiveto illustrate the evaluation methodology.The Raw Score for Achievement in Column 6 of Table 4 is obtained by comparing theachievement with the agreed target values. For example, the achievement for first successindicator (% increase in primary health care centers) is 15 %. This achievement is between80 % (Good) and 70 % (Fair) and hence the “Raw Score is” 75%.The Weighted Raw Score for Achievement in Column 6 is obtained by multiplying the RawScore with the relative weights. Thus for the first success indicator, the Weighted Raw Scoreis obtained by multiplying 75% by .50. This gives us a weighted score of 37.5%Finally, the Composite Score is calculated by adding up all the weighted Raw Scores forachievements. In Table 4, the Composite Score is calculated to be 84.5.The composite score shows the degree to which the organisation in question was able to meet

its objective. The fact that it got a score of 84.5 % in our hypothetical example implies thatthe organisation’s performance vis-à-vis this objective was rated as “Very Good.”The methodology outlined above is transcendental in its application. Various agencies willhave a diverse set of objectives and corresponding success indicators. Yet, at the end of theyear every organisation will be able to compute its Composite Score for the past year. ThisComposite Score will reflect the degree to which the organisation was able to achieve thepromised results.Organizational Rating for RC Value of Composite ScoreExcellent = 100% - 96%Very Good = 95% - 86%Good = 85 – 76%Fair = 75% - 66%Poor = 65% and belowPage 11 of 15Table 4: Example of Performance Evaluation at the End of the YearColumn 1 Column 2 Column 3 Column 4 Column 5 Column 6Objective Action Criteria /Success Indicators Unit WeightTarget / Criteria ValuesAchievement RawScoreWeightedRawScoreExcellent VeryGood Good Fair Poor100% 90% 80% 70% 60%Better RuralHealthImproveAccess toPrimaryHealth Care1% Increase in numberof primary health carecenters% .50 30 25 20 10 5 15 75% 37.5%2% Increase in numberof people with accessto a primary healthcenter within 20 KMs% .30 20 18 16 14 12 18 90% 27%3Number of hospitalswith ISO 9000certification by

December 31, 2009% .20 500 450 400 300 250 600 100% 20%Composite Score = 8 4.5%Page 12 of 15III. RFD Process and TimelinesA. Beginning of the Year• At the beginning of each financial year, with the approval of theDepartment/Ministry/competent authority concerned, each Organisation will prepare aResults-Framework Document (RFD) consistent with these guidelines.• To achieve results commensurate with the priorities listed in the RFD, theDepartment/Ministry/competent authority in-charge will approve the proposed activitiesand schemes for the organisation. The Department/Ministry/competent authority willalso approve the corresponding success indicators (Key Result Areas – KRAs or KeyPerformance Indicators – KPIs) and time bound targets to measure progress in achievingthese objectives.• Based on the proposed budgetary allocations for the year in question, the drafts of RFDswill be completed by 5th of March every year in future. To ensure uniformity,consistency and coordinated action across various Responsibility Centers (RCs), theconcerned administrative ministry / department will review these drafts and providefeedback to the Responsibility Centers concerned. This process needs to be completed byMarch 31 of each year.• The final versions of all RFDs will be put up on the websites of the respective RCs by the15th of April each year.• The Final draft of Results-Framework Document (RFD) of each RC will be submitted tothe concerned administrative ministry / department, by the 15th April of each year. It willtake into account budget provisions and in particular the Outcome Budget. The Results-Framework Documents will be drawn up in such manner that quarterly monitoringbecomes possible.B. During the Year• After six months, the Results-Framework as well as the achievements of each RC againstthe performance goals laid down at the beginning of the year, will be reviewed by theconcerned administrative ministry / department. At this stage, the Results-FrameworkDocuments may have to be reviewed and the goals reset, taking into account the prioritiesat that point of time. This will enable to factor in unforeseen circumstances such asdrought conditions, natural calamities or epidemics. Cabinet Secretariat will select RFDsof about 24 Responsibility Centres using a stratified random sampling procedure. TheseRFDs for RCs will be examined by the members of the Ad-hoc Task Force (ATF) alongwith the RFDs for the parent department / ministry.C. End of the Year• At the end of the year, all RCs will review and prepare a report listing the achievementsof their respective organizations against the agreed results in the prescribed format. Thisreport is required to be finalized by the 1st of May each year.Page 13 of 15• After scrutiny by the concerned administrative ministry / department, these results will beplaced in the website of the respective RCs by 1st of June each year.IV. Time Table 2012-2013 RFDsWHEN WHAT WHO

2012March 5Submit final draft of Results-Framework(RF) document to concerned administrativeministry / departmentRCs2013May 1Submit year-end evaluation report onprogress during the yearRCsJune 1Place the Evaluation result in the respectivewebsiteRCsPage 14 of 15V. Mandatory Success IndicatorsEach RFD must contain the following mandatory indicators to promote enhanced and sustainable organisational performance levels.Objective Actions SuccessIndicator Unit WeightTarget / Criteria ValueExcellent VeryGoodGood Fair Poor100% 90% 80% 70% 60%1 EfficientFunctioning ofthe RFD SystemTimely submission of RFD for 2012-13On-timesubmission Date 2%March 52012March 82012March 92012March 102012March 112012Timely submission of Results for2012-13On-timesubmission Date 1%May 1

2013May 22013May32013May 42013May 52013Finalize a Strategic Plan for RCFinalize theStrategic Plan fornext 5 yearsDate 2% Dec. 102012Dec. 152012Dec. 202012Dec. 242012Dec. 312012Identify potential areas of corruptionrelated to organisation activities anddevelop an action plan to mitigatethemFinalize an actionplan to mitigatepotential areas ofcorruption.%2% Dec. 102012Dec. 152012Dec. 202012Dec. 242012Dec. 312012Implementation of SevottamCreate a Sevottamcompliant systemto implement,monitor and reviewCitizen’s Charter

Date 2% Dec. 102012Dec. 152012Dec. 202012Dec. 242012Dec. 312012Create a SevottamCompliant systemto redress andmonitor publicDate 2%Dec. 102012Dec. 152012Dec. 202012Dec. 242012Dec. 312012Page 15 of 15Objective Actions SuccessIndicator Unit WeightTarget / Criteria ValueExcellent VeryGoodGood Fair Poor100% 90% 80% 70% 60%GrievancesTOTAL WEIGHT= 11%Page 16 of 15For examples and background material on the Performance Monitoring andEvaluation System, please visit our website: www.performance.gov.inVI. RFD Submission ProcessAll RFDs must be submitted to the administrative ministry /department concerned, by 5:30 PM on Monday, March 5, 2012.Please refer all enquires relating to these guidelines to:Shri S.B.MandalDeputy SecretaryPerformance Management DivisionJanpath HotelCabinet SecretariatNew Delhi 110001

Email: [email protected],[email protected]: 011-23741164

Chapter 1 Introduction 1Chapter 2 Vision, Mission and Values 3Chapter 3 Challenges & Opportunities in the New Decade 5Chapter 4 Strategic Plan 124.1 Objective: To formulate progressive tax policy 124.2 Objective: To provide efficient and effective administration 144.3 Objective: To Promote Voluntary Compliance 24Chapter 5 Conclusions 29

Table of Contents1.1 Direct taxes, now the majorsource of tax revenues to thecentral government, have grownat an average annual rate of 24%in the last five years and havenearly trebled from ` 1,32,771Crore in 2004-05 to about` 3,78,000 Crore in 2009-10.The contribution of Direct Taxesto the Central Tax Revenues hasgrown from 43.79% to 60.5%during the same period. Theratio of direct taxes has increasedfrom 4.1% of GDP in 2004-05 to6.1% in 2009-10. The ThirteenthFinance Commission (2010-15)has projected direct tax revenuecollection at ` 8,29,668 Crore by 2014-15 and direct tax to GDP ratio of 7.62%.1.2 The vision of the Income Tax Department (ITD) is to be a partner in thenation building process through progressive tax policy, efficient and effective taxadministration and improved voluntary compliance. This will be achieved by anenabling policy environment and augmenting the revenue mobilisation apparatusfor optimum revenue collection under the law, while maintaining taxpayer confidencein the system.1.3 The strategic planning for this purpose will have to be done in dynamic settingstaking into account external challenges & opportunities and internal strengths &constraints. This document states the Vision 2020 and a strategic plan covering

the five year period 2011-15. A mid-term review of the implementation of the planwill be done in 2013. The Strategic Plan itself will be reviewed in 2014 to evaluateIntroduction1Customs, Union OthersExcise & Service TaxPersonal Income Tax Corporate Tax1%21%39.5%38.5%Break-up of the Tax Revenue ofCentral GovernmentV i s i o n 2 0 2 0the effectiveness of the initiatives taken, requirementfor course correction and the need, if any, for newinitiatives in the next five years.1.4 Vision 2020 spells out the Vision, Mission andValues of ITD in Chapter 2. Analysis of major challengesconfronting the ITD and various opportunities likely tobe thrown up by these challenges during the strategicplan period 2011-15, is contained in Chapter 3.The Strategic Plan is discussed in Chapter 4. Finally,conclusions are drawn in Chapter 5.Vision, Mission & Values2“ “2.1 Our VisionTo partner in the nation building process through progressivetax policy, efficient and effective administration and improvedvoluntary compliance2.2 The following Mission statement outlines the roadmap for the ITD to realise itsvision:Our MissionTo formulate progressive tax policiesTo make compliance easyTo enforce tax laws with fairness

To deliver quality servicesTo continuously upgrade skills and build a professional and motivatedworkforce2.3 Our Values will steer us through the journey towards realising our Vision andwill be reflected in all our decision making processes.

Our ValuesIntegrity “We discharge our duties truthfully, honestly andtransparently”Accountability “We are responsible for our actions and outcomes”Responsiveness “We are sensitive, prompt, fair and objective in our dealingswith our stakeholders, fostering mutual trust”Professionalism “We strive for improving performance and competence with afocus on achieving excellence”Innovation “We encourage new ideas, methods, processes andpractices”Collaboration “We work together with our stakeholders and partners toachieve common goals”

Vision, Mission & ValuesV i s i o n 2 0 2 03.1 In an ever changing environment, ITD seeks to have a clear focus on its goalsto be able to continually review its policies, operating approaches and proceduresfor being responsive and adaptive to the changing business and legislativeenvironment. New technological development, accelerated globalisation, exchangeof information between revenue authorities and the new Direct Tax Code offerboth challenges and opportunities. ITD is poised to seize the opportunities andmeet the challenges to realise its Vision through progressive tax policies, efficient& effective administration and improved voluntary compliance. An understandingof the challenges and opportunities they throw up is the first step towards meeting

the challenges. The challenges have accordingly been classified under the threeenablers for realisation of vision.3.2 Policy Intervention Challenges3.2.1 Developing Comprehensive Database of All ITD DataThe Challenge to formulate progressive tax policy is critically dependent on availabilityof reliable data on taxpayer compliance behavior, efficacy of various instrumentsused by the tax administration for improving compliance, possible opportunities fortax leakages, the revenue potential of the economy etc.3.2.2 Developing Research CapabilitiesDeveloping research capabilities to collect such data as a national database andmine and analyse the data is the challenge that needs to be addressed by ITD formoving towards a research driven tax administration.3.2.3 Estimation of the Tax Base & Revenue LeakagesThe starting point for the revenue optimisation effort would be to ascertain thepotential tax base of the country and the extent of revenue leakages. Absence of ascientifically developed revenue forecasting model is a constraint that needs to beaddressed.Challenges & Opportunitiesin the new decade3V i s i o n 2 0 2 0Estimation of the true revenue potential with acustomised forecasting model will help ITD to quantifythe gap between the potential revenue and the actualcollection. A study on the extent of the revenue leakagewith clear identification of the activities and the factorsresponsible for its growth will help ITD to optimise itsrevenue mobilisation.3.2.4 Complexities in Tax LawsComplexities in tax laws are regarded as one of themajor impediments to voluntary compliance. A lot ofeffort has been made in the past decade to simplifythe direct tax laws in the country. This effort needs tobe continued in future also.3.3 Challenges for Efficient & EffectiveAdministration

3.3.1 Assessment and Reduction ofCompliance RiskComplexity and innovation in business structures, newfinancial products, large number of taxpayers, growthin international trade supported by rapid expansionof e-commerce, commoditisation of tax avoidanceschemes, are some of the factors leading to increasedcompliance risk for the tax administration. It maynot be possible for ITD to address these risk factorsthrough the traditional tools based on verificationand enforcement action alone. ITD has to pay greaterattention to understanding the factors that shapetaxpayers’ compliance behaviour in order to craft andimplement potentially more effective set of responses.The challenge before the ITD is to identify and assesscompliance risks, not only domestically but alsointernationally, on the basis of priorities identified withthe help of a sound risk management system.3.3.2 Human Capital ChallengesThe human resource of ITD with over 57,793employees is the strategic foundation of the ITD.Estimation ofthe true revenuepotential witha customisedforecasting modelwill help ITD toquantify the gapbetween thepotential revenueand the actualcollection

““V i s i o n 2 0 2 0Skilled and committed employees who are valuedand treated equitably are more likely to be fair andprofessional in their dealings with taxpayers. Creatingopportunities for development and advancement ofcareers is an instrument for developing an attractivework environment. The challenge is to motivate andequip each and every member of ITD to reach his or

her unique and full potential.In response to the changing business environment,increased complexity of tax administration andworkload and tax payers’ expectations of service, ITDis on a transition path from a manual to an IT-enabledsystem. Traditional problem solving methods ofworking in isolation no longer work in a networkedenvironment where cross-functional problem solvingthrough collaboration is the new mantra. ITDintends to inculcate a culture of collaboration acrossfunctional areas for achieving the overall objective ofthe department.There is an urgent need to upgrade the technicalcapabilities of the personnel to effectively perform theirfunctions. The challenge before the ITD is to map thenew skill sets required with the existing skill sets of thepersonnel and come up with a comprehensive planto bridge the gap through targeted training. ITD hasattracted and retained some of the best civil servicetalent in the country to man its managerial cadres. Inthe face of stiff competition for talent in the country,especially from the highly competitive private sector,ITD cannot remain complacent on this score. ITDintends to provide a challenging and stimulating workenvironment for its personnel, where talented employeescan realise their full potential, contribute to the growthof ITD and take pride in the public service ethos asmembers of the premier service of the government.3.3.3 Development of Real Time knowledgeSharing MechanismIn a knowledge driven organisation like ITD, it isimperative for its personnel to update their knowledgeThe challengebefore the ITDis to identifyand assesscompliancerisks, not onlydomesticallybut alsointernationally,on the basisof prioritiesidentified with thehelp of a soundrisk management

system

““V i s i o n 2 0 2 0constantly. Knowledge connotes ability to understandthe law and its myriad interpretations as well as abilityto understand accounts. At another level, knowledgecomprises the ability to detect evasion, devisestrategies for improving compliance, improve internalefficiency and efficacy, compete globally to attractand retain multinational taxpayers. The challenge isto identify the requirements of knowledge by variousfunctionaries of ITD, institutionalise the process ofimparting and co-creation of knowledge, create aninstitutional memory and put in place a mechanismfor real time sharing of knowledge by developing bothformal & informal channels.3.3.4 Technology Challengea. Technology Transforming Rules ofCommerceAdvent of new technology poses both challengesand opportunities for ITD. Technology has changedthe very basis of commerce. With rapid expansionof sophisticated computer and communicationstechnology, taxpayers are finding innovative meansto conceal economic transactions. This paradigmshift in the very basis of commerce calls for afundamental change in ITD’s conduct of its affairs. Afresh look has to be taken in various functional areasincluding investigations, taxpayer services, legalframework, skill sets of its personnel, placement ofofficers across international tax jurisdictions, makingin-house technical support & expertise availableand making changes in internal structure. Thechallenge is to outline a comprehensive Technologyplan which addresses diverse issues relating totechnology. Availability of new technology also offersan opportunity for ITD to adopt the same as thefulcrum around which the functioning of the entireorganisation revolves in the new decade. The taxcompliance process encompassing various stages isa chain. Seamless flow of information to each link inthis chain through enabling technology will aid theITD personnel in making informed decisions.

ITD intendsto provide achallenging andstimulating workenvironment forits personnel,where talentedemployees canrealise theirfull potential,and take pridein the publicservice ethos asmembers of thepremier service ofthe government

““V i s i o n 2 0 2 0b. Explosion of Digital DataThe volume of data the ITD is handling today is hugeas can be gauged from 270 million entries relatingto tax deducted at source alone. This volume willonly grow manifold in the coming decade. Datapertaining to high value transactions received fromthird parties is worth ` 100 trillion today. The presentday network, which operates on “Single ApplicationSingle Database” model, is soon likely to berendered inadequate. The challenge for the ITD is todevelop computational capacity with facility for webcomputing.3.3.5 Accelerating GlobalisationThe administration of a tax code is much morecomplex in an open global economy. Taxpayersare more sensitive to differences in inflation, taxtreatment, exchange rates, tax rates and the abilityof tax administrations to monitor trade and incomeflows. Generation of income across the world posesa challenge to the ability of revenue authorities toverify the accuracy of taxpayers’ returns therebyincreasing the risk of incidence of tax avoidance.

International tax advisors act in concert to puttogether complex structures spanning variousjurisdictions taking advantage of the technology.In this scenario, protection of tax base andcollaboration amongst tax authorities becomesessential. The challenge before ITD is to take aleadership role in protecting the national tax basethrough concerted efforts and active participationin global fora.3.3.6 Transition from 1961 Act to DTCThe introduction of the new Direct Taxes Code(Bill), 2010 (DTC) in the Parliament is a landmarkevent in the history of 150 years of Income Tax inIndia, posing both challenges and opportunities.At an operational level, the transition from afifty year old 1961 IT Act to the new DTC wouldThe taxcomplianceprocessencompassingvarious stagesis a chain.Seamless flowof informationto each linkin this chainthrough enablingtechnology willaid the ITDpersonnel inmaking informeddecisions

““10 V i s i o n 2 0 2 0require effective communication with the taxpayersthrough awareness programs about the new law.Departmental personnel will also have to be trainedon the new tax code.The need to develop a new ITD software applicationpackage for the new code, making it compatible with

the legacy system, training the departmental personnelin the new system within the shortest possible time,will be a challenge. At the same time, it offers anopportunity for the ITD to move to a fully automatedtechnology-driven system on a single technologyplatform right from inception for fully integratingpeople, process and technology.3.4 Challenges for Improved VoluntaryCompliance3.4.1 Removal of Barriers to VoluntaryCompliancePromoting voluntary compliance is one of the primeconcerns of ITD. Voluntary compliance is enhancedwhen taxpayers find it easier to comply with taxlaws. The challenge before the ITD is to identify thebarriers to voluntary compliance and take proactivesteps to remove them by putting in place excellentpublic service delivery mechanism. ITD intends to beresponsive and sensitive to the needs of all categoriesof taxpayers by segmenting taxpayers for craftingtargeted facilitating packages after ascertaining thespecific requirements.3.4.2 Reduction in Compliance CostTax compliance costs impose a burden on thetaxpayers. If the amount is a big percentage of thetax payable, it deters small & medium taxpayers frombeing a part of the tax system. The challenge beforethe ITD is to ascertain the extent of compliance costfor different categories of taxpayers and developfocused programmes to reduce the compliance costsfor improving voluntary compliance.The challengebefore the ITDis to identifythe barriersto voluntarycompliance andtake proactivesteps to removethem byputting in placeexcellent publicservice deliverymechanism

““V i s i o n 2 0 2 0 113.4.3 Meeting Increasing Aspirations ofTaxpayersThe ITD has been rolling out various servicesto the taxpayers to make compliance easier forthem. However, many of these services have notbeen optimally utilised by the taxpayers. There is aneed to analyse the requirements of the taxpayersfor developing a channel strategy for delivery ofservices.3.4.4 Transition to an Era of E-governanceE-governance is viewed by ITD as strategic tool fortransforming Governance and improving the quality ofservices provided to the taxpayers. It enables deliveryof services as per the convenience of the taxpayers ina cost effective manner while ensuring accountability.With the increase in Internet and mobile connectionamongst the citizens in India, taxpayers look forwardfor a one stop solution from the ITD that can beaccessed easily for getting a desired service. Thechallenge before the ITD is to set clear goals to meetthe expectations of taxpayers with focus on outcomes.ITD has to address the need for ‘Integrated ServiceDelivery’ mechanisms cutting across functional areasof ITD. Integrating back office information processingsystems with the Internet to provide an onlineinterface to the taxpayers is the key for transiting toan era of e-governance. However, the digital dividein the taxpayer population is to be kept in mind whileplanning for service delivery to the taxpayers who donot have access to the Internet.3.4.5 Faster Resolution of DisputesThe rising litigation with the taxpayers and thequantum of revenue locked up in appeals is a matterof serious concern that requires attention. ITD intendsto address this concern with comprehensive proposalfor reducing unwarranted litigation with taxpayers,faster disposal of appeals and prompt redressal ofgrievances in a consistent manner.E-governance isviewed by ITDas strategic tool

for transformingGovernance andimproving thequality of servicesprovided to thetaxpayers

““Three strategic initiatives linked to the three enablers captured in the vision havebeen identified by ITD to meet various challenges outlined in Chapter 3 forrealisation of its vision.4.1. Objective: To Formulate Progressive Tax Policy4.1.1 Estimating the Tax Base & Developing a Revenue ForecastingModelThe first step for optimisation of revenue mobilisation is to ascertain the true tax baseof the country. ITD intends to develop a revenue forecasting model by identifyingthe tax base and the variables influencing direct tax revenue from the perspective oftax administration. The existing revenue forecasting models used are conceptualisedfrom a slightly different perspective without explicitly focusing on administrativeaspect of tax policy. A customised model for ITD may identify and use variablesaffecting the compliance level explicitly, in addition to the GDP used as a proxy forthe tax base.Action Point: Constitute an expert group for developing a revenue forecastingmodel with departmental officers and outside experts includingeconomists, statisticians and other government agenciesConstitution of the Expert Group to be done before the end ofthe financial year 2010-114.1.2 Instituting Study on Plugging of Tax LeakagesIn its optimisation effort, ITD has to ascertain evasion prone sectors of theeconomy; reasons for non-compliance; possible methods of tax avoidanceand evasion; and measures to plug such tax leakages. To this end a study by a

broad based group of experts coordinated by departmental officers will be carriedout.

4Strategic PlanV i s i o n 2 0 2 0 13Action Point: Constitute an expert group forconducting a study on tax leakagesand suggesting measures to plugsuch leakages with departmentalofficers and outside expertsincluding economists, statisticians,other social scientists and othergovernment agencies. Constitutionof the Expert Group to be donebefore the end of the financial year2010-114.1.3. Setting up of a Research UnitModern tax administrations all over the world makepolicy and administrative decisions based on scientificresearch. Following international best practice, ITDintends to set up a research unit.Action Point 1: Set up a research unit havinga multi-disciplinary teamcoordinating efforts on taxresearch as an ongoing programafter ascertaining all the researchrequirements of ITDAction Point 2: Set up Revenue Services ResearchInstitute with physical and digitallibrary and dedicated bandwidthAction Point 3: Make Revenue Services ResearchInstitute the nodal agency forconducting research on demandAction Point 4: Make a multi-year commitment toresearch program to transform ITDinto a research driven organisationAction Point 5: Develop research-driven methodsto detect non-compliance andother aspects of tax administrationAction Point 6: Encourage research by traineeofficers at National Academy ofDirect Taxes and officers pursuingstudy leave for inculcating a newculture of research-backed taxadministrationModern tax

administrationsall over the worldmake policy andadministrativedecisions basedon scientificresearch.Followinginternationalbest practice, ITDintends to set upa research unit

““14 V i s i o n 2 0 2 0Action Point 7: Bring all data of ITD under asingle custodian for formulatingprogressive tax policy4.2 Objective: To Provide Efficient andEffective Administration4.2.1 Developing Data Warehouse &Business Intelligence SolutionITD intends to use innovative methods to supplementits traditional enforcement tools in order to reduce thetax gap during the strategic plan period 2011-15. Aconscious effort will be made to move towards nonintrusivetargeted enforcement tools.Action Point 1: Make internal data availablealmost on real time basis bycapturing data from Paper Returnsimmediately after receiptAction Point 2: Make internal data robust andcurrent by including informationgathered during enforcementaction by the Investigation Wingand the Assessing OfficersAction Point 3: Make external information database extensive by graduallyexpanding scope of AIR andsecuring access to data bases offinancial and other institutions and

establishmentsAction Point 4: Build partnership acrossgovernment agencies to gatherand share information and workout uniform accounting / reportingpracticesAction Point 5: Put all the functions relating tocollection of information under oneDirectorateAction Point 6: Ensure that the work of AssessingOfficer and the CommissionerITD intends touse innovativemethods tosupplementits traditionalenforcementtools in order toreduce the taxgap during thestrategic planperiod 2011-15

““V i s i o n 2 0 2 0 15(Appeals) is done online on thesystemAction Point 7: Update and clean PAN databaseon a regular basisAction Point 8: Consider modification of ITR formsto capture relevant informationto facilitate matching of externalinformationAction Point 9: Bring all data of ITD under a singlecustodian for deploying effectivedata mining toolsAction Point 10: Ensure integrity / evidentiary valueof digital data by following cyberforensic best practicesAction Point 11: Make standard operating practices(SOP) in respect of cyber forensicbest practices for acquiring,

analysing and archiving digitaldata flowing into the systemAction Point 12: Upgrade current data miningand other initiatives for DataWarehousing Solutions fordeveloping ComprehensiveBusiness Intelligence for just in timeenforcement capabilityAction Point 13: Create a Directorate of RiskManagement for dedicatedattention to management of riskAction Point 14: Use Risk Managementmethodology to identify high risktaxpayers by continuously revisingand enhancing case selectionprocessAction Point 15: Extend unit of risk assessmentfrom individuals to group oftaxpayersAction Point 16: Make business intelligenceavailable to the actual users almoston real time basis16 V i s i o n 2 0 2 0Action Point 17: Use IT-enabled tools to navigatethrough software accountingpackages4.2.2 Developing Mechanism for MonitoringTax-exempt SectorThe size and diversity of the tax exempt sector makesit incumbent for ITD to focus on compliance in thissector and also provide necessary guidance forensuring compliance. ITD will continue to monitor theactivities of this sector to ensure that tax forgone iswell deserved.Action Point 1: Develop a national data base oftax-exempt entities and list out theiractivitiesAction Point 2: Extend facilities for timelyregistration of the tax-exemptentitiesAction Point 3: Proactively address misuse of taxexemptstatus4.2.3 Meeting the Challenges ofInternational Tax AdministrationProliferation of tax avoidance schemes acrossnational borders due to advancement in technology,integrating world economy, mobile capital andmobile population etc. are posing a challenge to taxadministrators across the world. Complex structuring

of transactions by Multinational corporations makesit difficult for the tax authorities to comprehend thefull impact unless regularly updated on various issuesrelating to tax laws across revenue jurisdictions.In order to effectively meet the challenges broughtabout by increased globalisation and to protect itstax base, ITD needs to continue to raise skill levelsof its personnel. It also has to play an increasingrole in the international fora to shape internationaltax standards, to push for greater transparency andexchange of tax information in order to curb taxevasion and avoidance.In order toeffectively meetthe challengesbrought aboutby increasedglobalisation andto protect its taxbase, ITD needsto continue toraise skill levels ofits personnel

““V i s i o n 2 0 2 0 17Action Point1: Expand knowledge base ofemployees on the latest trends ininternational taxation issuesAction Point 2: Capacity building in complex areasof transfer pricing and internationaltaxationAction Point 3: Enhance cooperation withthe treaty partners and otherinternational organisationsand work towards raising itsinternational profileAction Point 4: Exchange and sharing ofinformation with other taxadministrationsAction Point 5: Set up overseas units for facilitatingexchange of information

Action Point 6: Set up good administrativepractices for quicker disposalof disputes through mutualagreement procedure4.2.4 Ensuring Surveillance of Fund Flowthat Impact the Physical and EconomicSecurity of the CountryThe next decade will see an increased role of the ITDin scrutinising transactions and fund flow impactingnational security and identifying money laundering,terror and narcotic funding. This will require theITD to deploy considerable resource and energy oncriminal investigation. Effective criminal investigationwill necessarily include a comprehensive internationalstrategy to combat offshore tax evasion, and fundflows that threaten security of the country.Action Point 1: To develop a robust system ofcriminal investigation with focuson fund flows that impact nationalsecurityAction Point 2: To develop an outreach programto sensitise stakeholders abouteconomic and financial security18 V i s i o n 2 0 2 0Action Point 3: To keep tabs on fund flow relatingto money laundering, narcoticsand terrorAction Point 4: To ensure exemplary enforcementagainst abusive schemes andcorporate tax frauds4.2.5 Ensuring that Tax Practitioners andDepartmental Personnel Adhere toProfessional StandardsRecent exposures in India regarding manipulation ofaccounts by public corporations and failure of thepublic accountants to point them out have raisedcertain critical ethical issues. In the interest of thenation, it is important for the ITD to reiterate theimportance of ethical standards in public life. Thesame ethical standards are to be followed by thedepartmental personnel as well.Action Point 1: Administer effective system ofsanctions for those who fail tofollow the lawAction Point 2: Make departmental personneldemonstrate exemplary ethicalstandards while implementing thetax laws4.2.6 Developing a Tax Collection Strategy

The best possible revenue forecasting model cannotensure that actual revenue mobilisation reaches thepotential unless the collection machinery is geared upfor this purpose. Demand is raised by the ITD as aresult of assessments which is referred to as ‘regulardemand’. Uncollected regular demand broughtforward at the beginning of a financial year is termed as‘arrear demand’. The brought forward arrear demandcomprises of two components: (a) arrear out of freshdemand raised during the preceding financial year,and (b) arrear-out-of-arrear demand. As ITD improvesand upgrades its assessment effort, the arrear-out-offreshdemand component brought forward every yearIn the interestof the nation,it is importantfor the ITD toreiterate theimportanceof ethicalstandards inpublic life

““V i s i o n 2 0 2 0 19is bound to go up. This is the healthy component ofarrear demand which, after accounting for reductionsdue to appeals etc, yields revenue. It is the good debtstock or current asset of the Department. Thus, thegrowth of brought forward arrear demand, in-sofaras it represents growth in the annual rate of freshdemand, is a positive development, and has to beviewed as such.Arrear-out-of-arrear demand component of thebrought forward demand is the hard core arreardemand, most of which is in-collectible for variousreasons. It is also bound to rise on account of theannual accretion of statutory interest, which theDepartment is obliged to charge, because there is noprovision in law for not charging interest on bad ordoubtful debts of tax.ITD intends to put in place a detailed collection plan forimproving efficiency and productivity in collections.

Action Point 1: Develop an annual collection planthat would set targets and timestandards for both current andarrear demand to be collected onthe following basis:a) Analysis of the nature of currentand arrears demand to identifycollection patternb) Analysis of the tax records oftaxpayersc) Use of risk scoring techniques tocreate risk profiles of debtorsAction Point 2: Improve communication tomake taxpayers understand theirobligationsAction Point 3: Develop effective procedures forwriting off uncollectable tax arrearsAction Point 4: Include both pre-assessmentand post assessment taxes in thedemand analysis20 V i s i o n 2 0 2 0Action Point 5: Consider separation of assessmentand collection function4.2.7 Aligning HR Strategy to GoalsThe strategic foundation of the tax administration isthe human capital and optimal use of this resource iscritical for realisation of the vision. A comprehensiveHR strategy covering all aspects of manpowerplanning and development has to be formulatedwith a strong structural support for Human ResourceDirectorate.Action Point 1: Conduct a detailed analysis ofshortages of manpower andreasons thereof and come up withpossible solutionsAction Point 2: Consider a separate recruitmentboard for expeditious recruitmentof staffAction Point 3: Expedite processing of cadrerestructuring proposal and developautomatic mechanism for timelyperiodic evaluationAction Point 4: Formulate a comprehensiveHR strategy encompassing allaspects of personnel requirementsand development with a soundstructure for HR DirectorateAction Point 5: Match job requirements with skillsets of employees for placementsby developing Human Resource

Information System (HRIS)Action Point 6: Create motivational climate foremployees to excel by designing acareer progression pathAction Point 7: Reinforce a culture of crossfunctionalproblem solvingapproach through collaborationAction Point 8: Encourage innovations at workThe strategicfoundationof the taxadministrationis the humancapital andoptimal use ofthis resourceis critical forrealisation ofthe vision

““V i s i o n 2 0 2 0 21Action Point 9: Conduct training needs analysisand invest in high quality trainingfor overall development ofpersonnelAction Point 10: Set up real time knowledge sharingmechanism for enhancing revenueproductivityAction Point 11: Conduct an employee satisfactionsurvey through an independentagency for ascertaining satisfactionlevel of departmental employees4.2.8 Strategic Technology Initiative1. Developing Strategic Technology PlanITD intends to outline a comprehensive Technologyplan to address the diverse issues relating totechnologyAction Point 1: Formulate Strategic TechnologyPlanAction Point 2: Make provision for a robustManagement Information System

(MIS) for effective decisionmaking and reducing reportingrequirements by personnelAction Point 3: Augment computational capacityand network connectivity forhandling huge data volumes in anenvironment of dynamic computingparadigmsAction Point 4: Plan to remain cost effective andavoid technology obsolescenceAction Point 5: Resolve multiplicity of platformsin favor of uniform holistic rulebasedapplication matrix that canoptimally run on the state of the arthardware and networksAction Point 6: Integrate all the elements oftax collection process through22 V i s i o n 2 0 2 0technology with informationseamlessly flowing to the users forinformed decision makingAction Point 7: Ensure security of all informationassets and database througha systemic implementation ofperiodic vulnerability testing,security & forensic audits to preventfraudsAction Point 8: Create a single data center undera single custodian for storing alltaxpayer and third party dataAction Point 9: Make business intelligence outof processed data and make itavailable to the actual users almoston real time basisAction Point 10: Upgrade skills of the ITD personnelon a continuous basisAction Point 11: Develop a mechanism ofknowledge sharing on real timebasis within ITDAction Point 12: Plan to reduce carbon footprintthrough green technologyAction Point 13: Devise a detailed transition planfor e-governance initiativesAction Point 14: Consider setting up of SpecialPurpose Vehicle for quickand effective response to theTechnology challenge2. Developing Integrated TechnologyPlatform: Making the transition for

New DTC SmoothThe new DTC is likely to replace the 50 year oldIncome Tax Act with effect from April 2012. It offersan opportunity for ITD to integrate its people, processand technology through an integrated technologyplatform.V i s i o n 2 0 2 0 23Action Point 1: Prepare for the transition with adetailed outreach program bothfor the taxpayers and departmentalpersonnelAction Point 2: Make use of the opportunity tomove towards a fully automatedtechnology-driven systemAction Point 3: Integrate the compliance processchain through a commontechnology platform4.2.9 Real Time Knowledge ManagementThe challenge for creating an institutional memory forITD commences with identification of the requirementsof knowledge by various functionaries of ITD andsources of knowledge. This has to be followed byinstitutionalisation of the process of co-creation ofknowledge, and putting in place a mechanism forreal time sharing through formal & informal channels.Framing of Quality Assessments after making qualityinvestigations is considered the primary deterrentagainst tax evasion.1. Ascertaining Knowledge Requirementsof ITDTo develop consistency in interpretation of law isin the larger interest of ITD for reducing litigationand enhancing revenue productivity. As a first step,knowledge gap prevailing in the Department will beidentified and knowledge requirements across variousfunctional areas will be ascertained.Action Point 1: Identify knowledge gap andascertain knowledge requirementsacross functional areas of ITDAction Point 2: Identify sources of knowledgecreationAction Point 3: Encourage the process of cocreationAction Point 4: Develop institutional memoryFramingof QualityAssessments aftermaking qualityinvestigations is

considered theprimary deterrentagainst taxevasion

““24 V i s i o n 2 0 2 02. Developing Mechanism for Real TimeKnowledge Sharing“Let us Share – A compilation of Best Practices andOrders” is the current institutional mechanism forsharing of knowledge within ITD. The scope of thiseffort will be expanded to evolve into an online realtime knowledge sharing mechanism.Action Point 1: Provide facility for online learningmanagement system with facilityfor transmitting and storingwebcasts and VOIPAction Point 2: Set up online discussion forumto discuss issues relating to taxadministrationAction Point 3: Set up mechanism of knowledgesharing through formal & informalchannelAction Point 4: Provide for corporate subscriptionof judicial referencing system andeconomic data bases4.3 Objective: To Promote VoluntaryCompliance4.3.1 Incorporating Taxpayer Perspectives toImprove Service DeliveryITD intends to take proactive steps to better understandcompliance issues from the perspective of taxpayersby taking the following action steps.Action Point 1: Take operational decisions afterincorporating the views of theaffected partiesAction Point 2: Facilitate participation in thetax system by all segments oftaxpayersAction Point 3: Institute a study on barriersto compliance as an ongoingprogramme

V i s i o n 2 0 2 0 25Action Point 4: Institute a study on compliancecost of different categories oftaxpayers on a periodic basis4.3.2 Create a Channel Strategy forTaxpayer ServicesLack of awareness about tax laws and non-availabilityof taxpayer services in multiple channels in whichdifferent segments of taxpayers are comfortable mayalso result in non-compliance from small and mediumtaxpayers. It is important that the taxpayer’s behavioris properly studied before designing a suitablechannel mix for providing informative, interactive andtransactional services to the taxpayers.Action Point: Segmentation of taxpayers todevelop appropriate channelstrategy for communication andfor providing targeted and timelyguidance4.3.3 Single Window Facility for TaxpayersThe Citizens’ Charter 2010 of ITD contains the currentstandards of service delivery promised by the ITD of itskey services to the taxpayers. The implementation of theCharter is being done through Aayakar Seva Kendra(ASK), a single window facility for taxpayers for filingall applications for services & redressal of grievancesincluding paper returns. Unique acknowledgmentnumber is issued against each application tofacilitate monitoring of status during the life cycle ofan application/return. ASK is the front office of ITDsupported by the intranet of the Department, withstandardised design and a brand identity of its own,guided by the philosophy of “Sevottam” (Excellence inService Delivery). Currently operating at 3 buildingsat Pune, Kochi and Chandigarh on a pilot basis, ASKwill be made operational at all the buildings of ITDin a phased manner during the strategic plan period2011-15. The quality policy of the ITD contained inits Service Quality Manual 2010, promises that ASKwill be made compliant to IS: 15700:2005; the onlyThe Citizens’Charter 2010 ofITD contains thecurrent standardsof service deliverypromised by theITD of its key

services to thetaxpayers

““26 V i s i o n 2 0 2 0standards for excellence in public service delivery forpublic service organisations.Action Point 1: Display Citizen’s Charter of ITDprominently at all buildings of ITDand monitor implementation ofCitizen’s charterAction Point 2: Communicate service standardscontained in the Citizen’s charterto all taxpayers through differentchannelsAction Point 3: Build capacity to meet the servicestandards by developing integratedservice delivery mechanism cuttingacross functional areas of ITD.Make ASK the flagship projectof ITD for excellence in taxpayerservice deliveryAction Point 4: Implement scientific recordmanagement for improving servicedeliveryAction Point 5: Develop a mechanism for takingfeedback from taxpayers andconduct periodic surveys throughindependent agencies to measuretaxpayer satisfactionAction Point 6: Expand the bundle of servicesto be provided at ASK byproviding facilities for onlinefiling of applications includinggrievances, acknowledging allapplications from taxpayers onreal time basis, providing facilityfor online checking of status ofall applications and making allrelevant information materialsavailable to taxpayers onlineAction Point 7: Set up Integrated Call Centrefacility to check status ofapplications filed at ASK centersacross the country

V i s i o n 2 0 2 0 27Action Point 8: Set up ASK at all buildings of ITDon fast trackAction Point 9: Make all ASK centers of excellenceand IS: 15700 compliantAction Point 10: Develop FAQs centrally for useacross the country4.4.4 Strengthening Partnership With TaxPractitioners; Tax Deductors; and ThirdParty PartnersA vast majority of taxpayers interact with the ITDthrough the tax practitioners who play a critical role inthe compliance process at different stages. To improvethe quality of service to the ultimate taxpayers, ITDintends to maintain centralised contact with both taxpractitioners and business associations for bridgingknowledge gap.There are also a large number of third party partners ofITD who act as agents by collecting taxes on its behalfand depositing them within a stipulated period. Thisgroup is diverse and has differing levels of tax literacyand ability to access technology. ITD intends to organiseoutreach program to extend support to these partners.A large number of agencies furnish third partyinformation to the Department which forms the basicdata for conversion into actionable intelligence.ITD intends to collaborate with such partners withmeaningful dialogue and education programsAction Point 1: Constitute central and zonal DirectTax Advisory Councils and makethese fora effective through regularinteractionAction Point 2: Disseminate information throughtax practioners and extend servicesto themAction Point 3: Strengthen partnership with taxdeductors with proper handholdingand education programmes28 V i s i o n 2 0 2 0Action Point 4: Strengthen partnership with thirdparty information providers withguidanceAction Point 5: Devise standardised format forsupply of third party data andcreate facility for electronicsubmission of data4.4.5 Litigation ManagementDelay in resolution of tax disputes adversely affectsvoluntary compliance. Protracted litigation results in

wasteful expenditure of time and resources for bothtaxpayer and the Department. A systemic approach toresolve disputes would be a win-win situation both forthe ITD and the taxpayers. ITD intends to put in placea mechanism for putting an end of unproductivelitigation.Action Point 1: Set up mechanism for putting anend to unproductive litigationAction Point 2: Make dispute resolution panelwork efficiently and effectively withproper administrative support andconsider expanding its scopeAction Point 3: Implement appeal registry andstrengthen appellate commissionermachinery for quicker disposal ofappealsAction Point 4: Issue revenue rulings on importantlegal issues having widerramificationsAction Point 5: Complete work on the JudicialReferencing system on fast trackand make it available to allpersonnelAction Point 6: Finalise Advance PricingAgreement procedure for transferpricingProtractedlitigation resultsin wastefulexpenditureof time andresources forboth taxpayerand theDepartment.A systemicapproach toresolve disputeswould be a winwinsituationboth for theITD and thetaxpayers

““Vision 2020 is a document that contains what the Department believes is possiblefor it to accomplishVision is what vision does. Vision must be articulated, internalised and acted upon.At the end of it, the worth of the vision is in its executed reality. As a professionalorganisation, ITD will bring the power of shared vision to the workplace and actupon it. An effective communication strategy will be implemented for reaching out tothe two most important stakeholders of ITD, namely, employees and the taxpayers.Execution of the projects would require the ITD to inculcate a culture of collaborationacross functional areas. ITD is committed to throw its full weight behind theseinitiatives to realise its vision.

5Conclusions

Income Tax DepartmentDepartment of Revenue, Ministry of FinanceGovernment of India