Hon’ble Ms. Anita Kapur, Chairperson of the CBDT, has addressed a letter dated 8th May 2015 to the Principal Chief Commissioners, Director Generals etc pointing out that the number of existing income tax payers is low compared to the potential and that the gap between the potential and the actual tax payers appears to be wider in the case of tier-II cities and towns. Ms Kapur has stated that considering the priorities of the Government and the need to widen the tax base, a concerted and focused effort in mission mode is required. She has called upon the department to strive for adding at least 25 lakhs new assesses per month during the current financial year. She has also stated that the assessment and investigation charges have been the mainstay of the Department’s efforts to widen tax base. She has directed the top brass to come prepared to present and discuss specific strategies for widening the tax base of each region and at national level and also to send a brief note on the suggested strategy. The officers have also been requested to forthwith focus their attention on this issue and deploy & activate the officers to achieve this goal.
It should be regular effort to trace new taxpayers who are avoiding to pay tax. Fixing such a high target for locating new assessee will induce officers to adopt any means to achieve it. In fact a strategy should have been framed by calling suggestions from various bodies and also from the officers of the department and thereafter action should have been initiated instead fixing such a target abruptly. For initiating action a separate wing can be established instead burdening the investigation wing or assessment wing.
The Income tax Act provides for survey of premises where ostentatious expenditure is incurred. Now a days no normal marriage functions can be performed for less than Rs. 10 lakhs. A medium level marriage can easily be expected to incur expenditure of not less than Rs. 50 lakhs. For instance in Hyderabad any function at HITECH etc. premises the expenditure would be anything not less than Rs. 10 Crores. Live telecast is also arranged for such high profile marriages and functions. Is the Income tax department is tapping this source of expenditure? Evidently not.
Similarly the culture of high profile performance of marriages is spread to the II tier cities and towns. The Income tax department should ensure such extravagant expenditure is checked in the eye of Income tax.
The clarion call must be appreciated, but the question is as to whether fixing such targets will result in the desired results of having more lawful tax. Such targets will only make the authorities more authoritative and may adopt coercive methods, as were adopted during emergency for meeting the ‘family planning targets’ and more so, what is the guarantee that such new tax payers will continue to be regular tax payers in future. When it is well within the knowledge of a common man as to which are the big fish, don’t the department knows? Efforts should be catch one big fish instead of 100 small fish. Such targeted efforts made in the last 45 years, including the door to door surveys, have failed (records can be verified). In my opinion the Hon’ble Chairperson should, instead of having conferences of Departmental Officer, call for a meeting of Retired Hon’ble Supreme Court, HIGH Court, retired members of ITAT, Advocates and C.A(s) having vast experience at grass root level and then form a policy.
Per se nothing wrong in the clarion call. But CBTD should realize that there are so many suit case companies and powerful politicians converting ill-gotten money as “agricultural income”. If CBTD concentrate on corporate tax evaders and internal corruption, it will achieve its 90% of its battle. CBTD Chief should realize that corruption is so rampant makes honest persons life miserable. Unfortunately the government is wasting its bulk of tax payers money in pampering non-working establishment and unless this trend is reversed, whatever amounts of taxes are paid funds will not be available for development and other activities.