Chartered accountants across the country have requested the Prime Minister’s office and the Finance Ministry to rein in tax officials who have been directed to take “all possible actions” to recover tax amid a shortfall in revenue collection.
On March 26, the Central Board of Direct taxes (CBDT), the apex body, issued instructions to all principal chief income tax commissioners (CITs) across the country to take “all possible action” immediately to boost the collection of direct taxes, including recovery of arrears.
This kind of instruction causes a great deal of concern in the minds of tax payers as it is bound to create unrealistic pressure on tax officers, particularly days before the end of the financial year, said a press statement jointly issued by the Bombay Chartered Accountants’ Society, Chartered Accountants Association Ahmedabad, Chartered Accountants Association Surat, Karnataka State Chartered Accountants’ Association and Lucknow Chartered Accountants’ Society.
“Such a situation would be in sharp contrast to the stated motto of the government of ushering in a tax friendly regime,” said the communique which was signed by Sunil Gabhawalla (Mumbai), Chintan M Doshi (Ahmedabad), Rashesh Shah (Surat), Raghavendra Shetty (Karnataka) and R.L.Bajpai (Lucknow).
According to the release there are thousands of cases across India where demands may have been raised due to mismatch in the credit of TDS as per form 26AS and as per income tax portal for various valid reasons; the tax demand could also be because of pending disposable of rectification application for giving effect to orders to Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal (TAT). Many a time the tax demand is seen pending due to non-intimation of manual rectification carried out by assessing officer.
In a large number of cases the demands are disputed in appeal and the concerned tax payers have a high chance of succeeding in the appeals, said the associations who have appealed to the PMO and the MoF to instruct CBDT and ground level officials of the I-T department to refrain from taking actions which are not in the interest of the tax paying community. The associations have pointed out that “if at all recovery measures are to be adopted, they should be done after following the due process of law.”
The direct tax collection achieved is only 85.1% or Rs 10,21,251 crore against the budgeted target of Rs 12,00,000 crores, representing a shortfall of Rs. 1,78, 749 crore.
As per the letter dated 26th March by CBDT member Neena Kumar to all the principle chief commissioners, direct tax collection indicates worsening trend of negative growth in regular collection at -6.9% as against -5.2% in the last week. The letter further states that this alarming situation requires immediate action.
“The Board has discussed strategies through various communications with you and it was expected that by this time your strategies would have succeeded resulting into improved collections. However, the figures of collection give a different account…,” said the letter from the CBDT member.