TAX DEFAULTERS better pay taxes or they may find a town crier in front of their house. They have already done so in Bhopal. In order to recover dues, the Income Tax Department has decided not only to provisionally attach the properties of defaulters but also to publicise attachment through the ancient means of ‘Munadi’ so that it is not sold.
Recently, the IT authorities used this method in the posh Arera Colony area of the State capital and made announcements about the tax dues a resident of the locality had not paid.
The unusual method may be used because, against the total arrears of Rs 1693.90 crore till August 2006, the Bhopal circle of Income Tax Department has managed to recover a mere Rs 78.81 crore.
Sources in the Income Tax Department said as part of its new action plan, the Central Board of Direct Taxes (CBDT) has decided that tax recovery officers can invoke a rarely used clause in the tax rules to attach a defaulter’s business and appoint ‘receivers’.
Provisional attachment of properties of defaulters would ensure that the properties were not disposed off. For this, besides making announcement near the residence and business premises of the defaulter, tax authorities would also intimate the Registrar, banks, RTO and other agencies etc so that properties of the defaulter could not be sold.
The very purpose of adopting this means is to embarrass the person and to motivate other defaulters to pay tax dues on time.
Justifying the move, the Revenue Department officials said while the law empowers tax recovery officers to undertake severe action, including asking the police to arrest and detain a person, the powers were seldom used.
“This year we want to ensure that the legal recourse available to is utilised,” an official said. Attachment of a business and appointment of a receiver means that the tax defaulter is prohibited from transferring or charging the business in any way.
Talking to the Hindustan Times, senior IT Officers however, maintained that Section 281 B of Income Tax Act is being used very carefully and cautiously. “This power should be exercised by the Assessing Officer only if there is a reasonable apprehension that the taxpayer may default the ultimate collection of the demand that is likely to be raised on completion of the assessment.
It should not be exercised unless there is sufficient material on record to justify the satisfaction that the assessee is about to dispose of the whole or any part of his property with a view to thwarting the ultimate collection of demand,” they added.