Friday, 5 August 2016

When Jagjivan Ram ‘forgot’ to file income tax returns - I

 (From my Memoirs)

The old-timers may recollect that in early 1969, the then Food and Agriculture Minister Jagjivan Ram’s failure to file his income tax returns for a few years had become news. There were wide speculations about how  he defaulted, what action was taken against him, what was the role of the then Finance Minister, Morarji Desai and what was the reaction of Prime Minister Indira Gandhi.

Recently I happened to read a few pages of a book ‘Milestones’ on the life of Jagjivan Ram (he died in 1986) by his wife Indrani Jagjivan Ram (she died in 2002). On page 231-32 of the book, published in 2010, she writes:

“In the middle of April (1969) Finance Minister Morarji Desai informed him that his income tax returns had not been filed for ten years. My husband was taken aback. Whatever money he received from the government….was after tax had been deducted. So how did this lapse occur? It also showed negligence on the part of the income tax department that no notice was sent to him. A chartered accountant looked after his finances. I thought that Morarji Desai had been jealous of my husband from the beginning; he was his political rival too. Was this a new trick to humiliate my husband?.... How was it possible that no query was sent for ten years? A person who had refused ministership in 1937 for the sake of the party and the nation, at a time when he had very little money, such a person could not even think of doing anything of this kind. Before forming an adverse judgement about such a person, his previous track record of conduct, sacrifice, dedication and patriotism should have been considered.

“My husband was hurt and ready to hand in his resignation – he did not want any blemish on his pristine carrier. His well-wishers stopped him. Indira Gandhi also asked him not to resign. The syndicate was opposing the progressive policies of the government and the Congress. Morarji Desai was a prominent leader of the syndicate. If my husband resigned, it would have meant a boost for the syndicate. Indira Gandhi said that Jagjivan Ram had played an important role in her election as the Prime Minister and Morarji Desai had been displeased with him since then. She said that many other MPs had not filed their income tax returns.”

The passage in the book reminded me of an article, highly critical of Morarji Desai,  written long ago by I. K. Gujral, much before he became Prime Minister. Gujral had written that as Finance Minister, Morarji Desai misused various investigating agencies under him and came to know that Jagjivan Ram had not filed his income tax returns for several years and created embarrassing situation for his Cabinet colleague.

Out of curiosity, I took the help of Google to find what others have written on the subject.  The search engine showed about 24,300 results to ‘Jagjivan Ram income tax’.  Obviously, all these are not about his income tax nor could I read more than a few which appeared relevant. I found that according to those who have written on the subject, Jagjivan Ram had not paid his income tax or had not filed tax returns for 10 years and even more. An interesting piece of ‘information’ appears in a book “The Congress, Indira to Sonia Gandhi’ by Vijay Sanghvi. According to the author:

“Indira Gandhi also chose him for the candidature in the presidential election in 1969, but she could not push through her proposal at the Parliamentary board meeting. She was hesitant earlier to choose him as her candidate because of the tax problems that had enveloped Jagjivan Ram. Not only that he had not paid the income tax for years but had also not filed the mandatory Tax Returns. Indira Gandhi knew that Morarji Desai was sitting on the files as the finance minister.” (Page 255)

I cannot say whether at any stage Jagjivan Ram was Indira Gandhi’s choice for the post of President of India but I can say with full confidence that much of what these people have written is false. I am not saying that these persons were telling lies. Lie is something one tells deliberately to hide something or to mislead someone. But they were not speaking truth, because they have written on the subject without knowing the truth. What could be the explanation of such writings, not true but sounding convincing  because writers include Indrani Jagjivan Ram and I. K. Gujral?

Visualise a dramatic situation. You are sitting before a stage. You hear only noise: MPs making noise in the Parliament that Jagjivan Ram has not filed his IT returns for several years; people reading the news in newspapers and talking about it; in defence of Jagjivan Ram a minister is heard telling MPs that he had ‘forgotten’ to file tax returns. Scene changes. Morarji Desai is seen ordering action against Jagjivan Ram who is sitting in a corner looking very upset. Morarji goes; Indira Gandhi appears. Someone asks her whether Jagjivan Ram had forgotten to file his tax returns. She says casually, ‘Yes, there was some such forgetfulness.’ Throughout, Jagjivan Ram himself does not say a word.

Those who have written had heard and seen only this much. They did not know how a question was raised in the Parliament. They guessed that Jagjivan Ram’s bete noire  Morarji Desai must have been the man behind it, that when such an impropriety had been committed by a cabinet minister  and Finance Minister was after his blood,  he could have been saved only by the Prime Minister who needed his support in her battle against the Syndicate comprising Morarji Desai and others.

This is what happens when one is confident that his guess is true. The most surprising is what is written in ‘Memoirs’ by his wife.  She too was totally ignorant and the person who wrote on her behalf or helped her write knew nothing.

There was only one person who knew everything, from how Jagjivan Ram’s default was detected and how the curtain fell on the drama. That person is still alive. He knows more than what even Jagjivan Ram knew. That person  is none other than the author of this article.

In an earlier article “When high-level corruption in India had state patronage” (Oct 04, 2015), I had written that in 1968, I was given charge of an income tax ward  which was very sensitive charge because it had jurisdiction over most of the persons who mattered in the country. Out of over 5500 taxpayers, at least 500 were very powerful: President, Vice President, Prime Minister, most of the central ministers, ex-ministers, several MPs, judges of the Supreme Court and Delhi High Court, senior bureaucrats, officers of my own department posted in Delhi including my own bosses, etc. Anyone of them could create problem for me, adverse entry in my annual records to transfer to the farthest corner of the country. My conscience would not allow to do anything illegal or irregular under any pressure to please anyone or to win favour. At the same time, I could not be rash to unnecessarily rub anybody the wrong way. I had to be very cautious and diplomatic in dealing with such persons.

During the course of examination of pending cases, I discovered that while most of the persons including those considered powerful were quite regular when filing their tax returns and paying taxes over and above what had been deducted at source, some of the powerful persons were defaulters. Technically and legally I could issue notice to each one of them but the risk was that some of them might have filed their returns elsewhere, for example in their own hometowns. One option was to ring up everyone to enquire but that was not likely to bring information which I could place on record. I also gathered from the members of the staff some powerful persons were reluctant to give information and clarifications needed by the Department and believed in showing off.

Under these circumstances I decided it would be better to give a strong signal to such people to take their income tax matters seriously. I adopted an unorthodox method which one can say was not expected of a civil servant. I called a Delhi Jan Sangh MP, Kanwar Lal Gupta, who was also an income tax practitioner, to my office. I shared the information with him and suggested that a Parliament question should be asked about the ministers and ex-ministers who had not filed their income tax returns for the current year and in the past. It was the biggest scoop for an MP in the Opposition. He sent a question to the Lok Sabha Secretariat for reply. 

Soon thereafter there was hue and cry. Finance Minister Morarji Desai and the officers of the Department of Revenue came to know of it. That such a question had been asked reached the press too. The question reached me through proper channel for preparation of the list of defaulters. The Commissioner of Income Tax (CIT), Delhi – at that time he was the senior most officer in the field – started getting phone calls from offices of ministers and ex-ministers for help in preparation of income tax returns.

The preparation of reply was not an easy task because I was not sure that record-keeping was as perfect as it should be. I asked my office to check all the records to ensure that there was no mistake in the reply. I prepared the list of defaulters. The most important name was that of Jagjivan Ram. To safeguard myself, I wrote in the reply that the list had been prepared on the basis of the records available and that it was quite likely that some of them had filed their returns elsewhere.

One day Rahmeshwar Thakur, at that time a practising chartered accountant (years later, in June 1991, he became Minister of State for revenue in the Finance Ministry, then shifted to other ministries before being dropped in December 1994  and served as Governor of different states between 2004 and 2009), came to me to file income tax returns of Jagjivan Ram. As far as I collect, Jagjivan Ram had not filed return for the assessment year 1968-69 and three preceding years, not for 10 years as claimed by the people who have written on the subject. The return for the assessment year 1969-70 was within time. During the course of conversation Rahmeshwar Thakur told me that a member of Jagjivan Ram’s staff used to look after his tax matters – it was confirmed by members of staff who had been working in the ward for several years – but after his foreign posting Jagjivan Ram did not assign the work to anyone and defaulted. Rameshwar Thakur was handling Jagjivan Ram’s personal income tax matters for the first time.

Devendra Narain, IRS (Retd.)
November 12, 2015

Please read Part II also. 


       17 opposition parties including the Congress have selected Late Babu Jagjivan Ram’s daughter Meira Kumar as their presidential candidate. Meira Kumar must know that more than 38 years ago a prominent Congress Leader and Finance Minister in Indira Gandhi government, Morarji Desai, had tried his level best to humiliate her father. Morarji Desai was an arrogant and self-opinionated politician who had no knowledge of Income Tax law but believed that as Finance Minister he could give any order to his officers. Indira Gandhi  was enjoying Jagjivan Ram's problem

June 24, 2017