Finance Minister P Chidambaram may rework the previous government's decision to set up an ombudsman to redress income-tax related grievances of the public. 
 
The proposal was approved by the Union Cabinet on October 10, 2003. But till date, there has been no further movement in setting up the office of an ombudsman. 

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The proposal was part of the three institutions that former Finance Minister Jaswant Singh had promised to set up in the revenue department to speed up redressal of grievances of income-tax payers. 
 
The other two institutions Singh had promised were the National Tax Tribunal and setting up of 50 additional benches of the Income-Tax Appellate Tribunal across the country. 
 
The minister had made the commitment at a highly publicised joint meeting of the chief commissioners of both the direct and indirect tax departments last year. 
 
But the minister's speech was singular as many of the promises made in them have not been implemented so far. This also includes introduction of a scheme for compounding of offences regarding payment of indirect taxes. 
 
Approving the ombudsman proposal, the Cabinet had noted, "Although there are several public grievance redressal cells existing in all offices of the income-tax department for handling grievances, it is gathered that these do not provide comfort to the general public." The issue was also flagged by the Task Force on Direct Taxes headed by Vijay Kelkar. 
 
The ombudsman was supposed to be independent of local tax offices, and resolve complaints impartially to promote a more fair income-tax administration. 
 
The offices were to be set up in the four metros initially, and the person was to be selected from among retired or serving additional secretary-level officers of the central government. 
 
The ombudsman would have a two-year term, and furnish a monthly report to the revenue secretary suggesting appropriate action on complaints received by him. 
 
To set up a National Tax Tribunal, Chidambaram will have to bring in a legislation in Parliament. But after the confusion that occurred on the issue of setting up a Communications Commission, the government has been reluctant to set up another quasi-judicial body like the Tribunal to interpret and implement the Income Tax Act. 
 
The NTT, according to Singh, was supposed to provide a uniform set of decisions to eliminate the often conflicting decisions being handed out by the courts. 
 
The government has also not moved ahead with the scheme to compound offences in line with that offered for direct taxes. 
 
The scheme had not found favour with the indirect tax department, which felt that it would allow a large number to companies an opportunity to get away from court cases. The department officials felt that such an amnesty scheme would act as a disincentive for the honest assessees.

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