I-T officers restive over collection process

Illustration: Ajay Mohanty
A silent revolt is brewing among tax officers against the process followed to achieve the direct tax collection target for FY18. According to sources, I-T officials are not happy with the directives and procedures set to meet the revised revenue target of Rs 10.05 trillion.

Indian revenue officers took up the matter at a recent meeting held last week. Sources said they were considering issuing a resolution, besides seeking intervention of the Central Board of Direct Taxes (CBDT) and the finance ministry to address their concerns.

Total direct tax (net collection) up to March 28 stood at Rs 9.28 trillion against the revised target of

Rs 10.05 trillion, according to data seen by Business Standard.

On April 2, the CBDT said the direct tax collection in 2017-18 stood at Rs 9.95 trillion versus the revised target of Rs 10.05 trillion. Also, 68.4 million I-T returns were filed against 54.3 million the previous year, a rise of 26 per cent.

According to a source, an assessment order has been passed against a large public sector bank and its subsidiaries, the timeline for which was March 2019. Such measures have led to additional tax collection of nearly Rs 100 billion. About 1,000 notices were served and people were being summoned to pay extra advance tax. Also, a decision was taken to withhold refunds of large corporate houses and state-run firms to shore up the collection number, said two senior officers.

Besides, there have been some significant attachments of assets to ramp up the collection numbers.

The move by I-T officials was triggered by a Bombay High Court directive of March 27 in the matter of a Rs 1.22-billion tax demand raised against the Sai Baba Sansthan Trust at Shirdi (the petitioner). The court had set aside an order passed by the Commissioner of Income Tax (Appeals), or CIT, on March 23.

“It appears the entire exercise of taking up the stay application, even after the appeal was heard, was only done so as to collect some revenue before March 31.

This is certainly not expected of an appellate authority such as the CIT Appeals, the court observed.

“We therefore direct the CBDT to carry out necessary investigation on the allegations made in the petition and if found correct, to take corrective measures to ensure its officers shall not be overzealous in seeking to recover maximum revenue before March 31,” the order said. “If the allegation in the petition is correct, such failures on the part of its officers needs to be corrected by the CBDT before it becomes the norm.”

Failing corrective measures by the CBDT would only result in our entertaining petitions from orders under the Act, as the alternative remedy would cease to be an efficacious remedy, if such arm twisting measures dehors application of the law, are adopted by the revenue (department), the order states.

On December 31, the deputy commissioner of I-T (exemption) had passed an order for the tax demand of Rs 1.22 billion on the Sai Baba Sansthan Trust. Against this, the petitioner had filed an appeal and also made an application to stay the demand order till the disposal of the appeal. The primary grievance of the petitioner was that the CIT Appeals, after having finally heard the petitioner on the merits of its appeal, instead of disposing of the appeal, seeks to set the clock back and pass an order on the petitioner’s stay application. The petitioner was also asked to pay Rs 200 million before March 31.

The Trust alleged the assessment officer has threatened to attach the bank account and reopen the assessment of the last two years in case it fails to deposit the said amount.

The court observed it is very serious particularly, when the assessing officer could have dealt with the request of deposit by passing an order on the application under the I-T Act filed by the petitioner.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel