New Delhi: In February 2021, the Narendra Modi-led government gave a third extension to former Indian Revenue Service officer P.C. Mody, making him one of the longest-serving chairpersons of the Central Board of Direct Taxes (CBDT). For a few months after his retirement in May that year, the 1982 batch officer did not get a post-retirement posting, much to the surprise of his colleagues.
Then, suddenly in November, then secretary general of the Rajya Sabha, P.P.K. Ramacharyulu, who had just been appointed a little over two months ago, was unprecedently removed from the post, and Mody was brought in as the head of the secretariat of the Upper House.
Last week, Mody—the first IRS officer to serve as the Rajya Sabha secretary general—was given his second extension in the post. In December 2022, he was given his first two-year extension. With this one, which is for a year, he will now serve in this capacity until 31 December, 2025.
“The Hon’ble Chairman, Rajya Sabha has been pleased to extend the appointment of Shri P.C. Mody, IRS (Retd.) as Secretary General, Rajya Sabha on the existing terms and conditions upto 31st December, 2025 or until further orders, whichever is later,” a notification dated 26 December, 2024 read.
Experts said granting extensions to the secretary general of the Lok Sabha or Rajya Sabha is not an unusual practice.
“It is not uncommon for a secretary general of the Lok Sabha or the Rajya Sabha to be given extensions. In case of the Rajya Sabha, it is entirely the prerogative of the Vice President to appoint and extend the tenure,” said former Lok Sabha secretary general and constitutional expert, Subhash C. Kashyap. “I myself served in the Lok Sabha for five years.”
Yet, the case of Mody, who received three extensions as CBDT chairperson and two as Rajya Sabha secretary general, is politically significant, his colleagues from IRS say.
“It is common for this government to rely on tried and tested officers. He has the government’s stamp of approval since his tenure in the CBDT, so his extensions are only expected,” said an IRS officer, who did not wish to be named.
“As the Rajya Sabha secretary general, he is the main advisor to the chairman (Jagdeep Dhankhar). The chairman is the face, but it is the secretary general, who provides the rules, precedents, basically all the legal-constitutional bandwidth to run the House the way he wants to.”
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‘A brilliant officer’
A graduate of Delhi’s St. Stephen’s College, Mody is also a lawyer by qualification. This always made him more of a “tax policy man” than an “operations man”, the officer quoted above said.
“It is ultimately policy that allows you to think far and wide, and also gets your out-of-the-box thinking noticed,” he added. “He was always an officer who showed a spark of brilliance.”
Born in Mumbai, Mody served as principal chief commissioner of the income tax department in Ahmedabad until 2017 before he was moved to Mumbai in the same position amid reports that overall corporate tax collections in the city had been poor.
“He served for many years in Gujarat, and then moved to Mumbai, the most important city when it comes to income tax, in 2017 at a time when taxes were believed to be low,” said another IRS officer, who also wished anonymity. “He has been this government’s go-to officer for many years.”
It was after his stint in Mumbai that Mody was brought to the CBDT, where he served as a member for two years before he was elevated as the chairperson.
“This made him the second CBDT chairperson to have headed the income tax department in Gujarat before coming to Delhi for the top post,” the officer added.
Mody’s predecessor, Sushil Chandra, had also headed the income tax department in Gujarat before he was made CBDT chief. After his retirement, Chandra was appointed the chief election commissioner (CEC).
Controversial tenure as CBDT chief
As member (investigation) at CBDT, Mody supervised the functioning of the investigation wing of the income tax department throughout the country.
As the chairperson, he presided over a significant shift in the tax system with the introduction of faceless taxation—a key reform of the Modi government to make the tax system “seamless, faceless and painless”.
“It was a major overhaul and he presided over it quite seamlessly,” the second officer quoted above said. “But it was one that made the IRS officers unhappy because they felt the new system made them irrelevant. Not much was done to address these grievances.”
During his tenure, there was widespread speculation that the department acted as an extended arm of ruling parties, which allegedly used it to pressure political opponents.
For instance, before the 2019 Lok Sabha elections, the Election Commission (EC) called Mody, along with then revenue secretary A.B. Pandey, to explain a series of raids on opposition leaders in the run-up to the polls.
The EC went on to “strongly advise” the finance ministry that the income tax agency’s actions should be “neutral” and “non-discriminatory”.
The advisory came after the CBDT raided the relatives and aides of then Madhya Pradesh chief minister Kamal Nath. It was a trend that only continued after the elections.
In April 2021, for instance, the income tax department raided Dravida Munnetra Kazhgham (DMK) chief M.K. Stalin’s son-in-law, just four days before the Tamil Nadu election.
In October 2020, the department raided the Congress party office in Bihar just a few days before the state Assembly election. Earlier, in July that year, key aides of former chief minister Ashok Gehlot had faced similar raids. In February 2020, income tax teams conducted three days of raids at various locations in then Congress-ruled Chhattisgarh.
It was not just allegations of misuse of the department by political parties. In June 2019, a junior colleague levelled serious allegations against Mody.
In an unprecedented complaint against him, Alka Tyagi, then chief commissioner of income tax (unit 2) in Mumbai, alleged that Mody had given her a “shocking” directive to bury a “sensitive case”. She also claimed that he had “secured” his position because of a “successful search” action against an opposition leader.
Two months after the complaint, Mody’s tenure was extended by a year.
First IRS officer to be made Rajya Sabha secretary general
In November 2021, Mody became the first IRS officer to be appointed to the post of secretary general of the Upper House. Until his appointment, the post had always been held by retired Indian Administrative Service officers of the rank of secretary or retired law officers.
His appointment raised eyebrows also because of the manner in which his predecessor, Ramacharyulu, was removed without any reason, making him the second shortest-serving secretary general in the history of Rajya Sabha.
“But what is curious is that even he (Mody) was only appointed for nine months to begin with,” said the first IRS officer quoted above. “It was as though it is a test because generally, the practice is to appoint secretary generals for a period of two years.”
Yet, Mody’s appointment was only part of the larger trend of former CBDT chairpersons being elevated to constitutional posts. While his immediate predecessor, Chandra, was appointed CEC, K.V. Choudhary, who served as chairperson of CBDT in 2014, was made the chief vigilance commissioner.
“The rise of Mody has to be also seen in the context of disempowering the IAS,” said a former IAS officer.
(Edited by Sugita Katyal)
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