Few can doubt the CAG did a great job in exposing the glaring loopholes in the VDIS black money scheme of 1997 which allowed many people to get away by paying just a 3-4% tax on their black incomes\u2014the loophole allowed people to buy gold\/silver with the black money, but declare this was bought many years ago when its value was much lower, and so pay a lower tax. But in asking the taxman to share details of the disclosures being made by way of the HSBC and other leaks over the past few years\u2014and the tax orders based on them\u2014the CAG may be worsening matters. In the past, with the taxman worried about what the CAG might say, we have seen thousands of \u2018protective\u2019 demands being made\u2014while the exorbitant tax-notices were not defendable in courts, they ensured that the CAG could never accuse the officer of not doing his\/her best to collect taxes. With the amounts of such \u2018protective\u2019 demands rising to lakhs of crore rupees, it was only a few months ago that the excise and customs department instructed its officers to stop doing this. And by telling officials their performance would be evaluated by looking at the proportion of tax notices that held up in court, the direct taxes department is also trying to curb such tax terrorism. Also Read:\u00a0What it will take to reform agriculture in India, here\u2019s a roadmapWhat it will take to reform agriculture in India, here\u2019s a roadmap But with the CAG wanting to examine the HSBC-type leaks, chances are the taxman could get adventurous again and issue large tax-notices based on incomplete information\u2014it is important not to forget the Hasan Ali case where, almost a decade after a Rs 34,000-crore tax demand was raised, the Income Tax Appellate Tribunal reduced this to Rs3 crore! While it is important to have an independent assessment of what individual officers are doing, the tax department would do well to put in place an in-house mechanism for this\u2014having an independent prosecution department whose success depends on how many cases it wins is one way of doing this. Another could be to have teams from different regions examine cases or to get senior board-level officials to do random checks\u2014since all information is available online, this is much easier now. While the role of the CAG is important, it is up to the tax department to devise a way to ensure CAG scrutiny doesn\u2019t become another reason for the taxman to indulge in tax terror.