Taxmen reminded: Comply with rules on family members’ business activity, embrace the spirit

NEW DELHI The Income Tax Department has reminded its officers and officials to follow a service conduct rule regarding family members involved in business with the ‘sprite of rule’. This is part of the vigilance exercise.

Rule 15(3) of Central Civil Services (Conduct) Rules 1964 prescribes, “Every Government servant shall report to the Government if any member of his family is engaged in a trade or business or owns or manages an insurance agency or commission agency.” However, after reviewing the ongoing vigilance proceedings against officers/officials of the Department, the Directorate General of Income Tax (Vigilance) observed “there is an apparent lack of awareness among cadre regarding compliance of specific rule.” Keeping this in mind, the Department issued a communication as part of ‘preventive vigilance’ measures.

The rules also define ‘Members of family’ in relation to a government servant. These  include the wife or husband, whether living with a government servant or not. However, a legally divorced or separated spouse is not included in this definition. Further, the son or daughter or step-son or step-daughter of the Government servant and wholly dependent on him will be treated as a family member. However, a child or step-child who is no longer in any way dependent on the government servant or whose custody the government servant has been deprived by or under any law will not be treated as a family member. Meanwhile, the definition also includes any other person related, whether by blood or marriage, to the government servant or to the government servant’s wife or husband and wholly dependent on the government servant as a family member.

The communication said that it is observed that most of the officers/officials are generally not aware of said specific rules. Those who know about this rule interpret that one is not to report under Rule 15 (3) of CCS (Conduct) Rules, 1964, if family members are engaged in business with their own funds. “The same is not in accordance with the spirit of the law,” the communication. Accordingly, it reminded that every government servant is duty-bound to report to the government about family members engaged in a business or trade.

Officials said such a ‘sensitization’ exercise ensures no conflict of interest. They also said some other rules are also related to family members. One such rule is ‘Employment of near relatives of Government servant in Companies or firms.’ Here, it has been said that no Government servant shall use his position or influence directly or indirectly to secure employment for any member of his family in any company or firm. Also, no Class One officer shall, except with the previous sanction of the government, permit his son, daughter or other dependant to accept employment in any company or firm with which he has official dealings or in any other company or firm having official dealings with the government.

There is another provision that makes it mandatory for the government servant, as soon as he becomes aware of the acceptance by a member of his family of employment in any company or firm, intimate such acceptance to the prescribed authority. She/he will also have to intimate whether he has had any official dealings with that company or firm.

Leave a Reply

Your email address will not be published. Required fields are marked *