The ombudsman, set up on the recommendations of the Kelkar task force on direct taxes, will also look into delays in releasing of seized books of accounts and assets to assesses after an income tax search and seizure operation.
The proposal, cleared by the Cabinet today, envisages that there will be an ombudsman in each of the four metros to start with.
The Cabinet also cleared amendments to the Forward Contracts (Regulation) Amendment Bill to enhance the quantum of punishment for players in the commodity market.
The Cabinet also gave its approval for the enhancement of the age of retirement of scientists working in Indian Council of Agricultural Research and teachers of state and central agricultural universities to 62 years from 60.
According to the Cabinet decision, the ombudsman shall be a retired additional secretary level officer at the Centre from either Indian Audit & Account Service, Indian Revenue Service, Indian Customs & Central Excise Service or Indian Legal Service.
He can also be a retired judge of any court and can hold the post till 65 years of age.
The ombudsman can seek an explanation from tax officials for complaints received from tax payers and also suggest remedial measures for the grievances. This would include protecting the rights of the individual tax payer including reducing his tax burden.
He will also identify those issues which increase the tax compliance burden and refer them to the finance ministry. In his annual report, he will review the quality of tax administration and make legislative and administrative recommendations to improve them.
Under the amendments to the Forward Contracts (Regulation) Amendment Bill, the Cabinet has sharply increased the punishment up to Rs 25 lakh from Rs 1,000 at present this is as per the recommendations of the Parliamentary Standing Committee on Food, Civil Supplies and Public distribution.
