With only four days to go (till March 31) and a shortfall of around Rs28,000 crore in tax collections, the income tax (I-T) department has gone on a survey spree. The collection target for Mumbai is Rs 2.04 lakh crore.
Hoping to bridge the gap, authorities have been surveying business houses for irregularities in their tax returns since March 14. Authorities have already conducted 120 surveys in the past week, an average of 15 to 20 surveys every day. A senior income tax official said that it would still not be possible to reach the target, but the attempt would at least help reduce the gap.
During a survey, I-T officials conduct surprise checks on companies they suspect are evading taxes. They question company executives, check their documents and computers.
“One huge benefit of a survey is that even other enterprises in the area become cautious and pay up their tax dues,” said an I-T official, requesting anonymity. “The gap would reduce to some extent at least because of the surveys. Also, some companies might pay their advance tax by March 31, the last day of the financial year. But that is not very likely as companies that pay huge advance tax tend to do so by March 15, the last date for payment, to avoid charges for late payment.”
Advance tax is paid in four installments — in June, September, December and March. It has to be paid latest by 15th of these months for every quarter. Advance tax is the largest contributor to the city’s direct tax collection. It accounts for around 35% of overall direct tax collection.
Officials said that the surveys were being conducted by assessment wings of the department. There are 75 assessment wards in Mumbai and each ward has four income tax officers and one assistant commissioner of income tax – the assessing officers that conduct the survey.
Not too many surveys were conducted since December 5 last year because I-T officials were protesting pending promotions. On March 14, they partly withdrew their agitation and decided to participate in the surveys and undertook a massive drive. In Mumbai, promotions of 80 income tax officers, assistant and deputy commissioners of income tax have been pending for the past two years. In India, 400 income tax officials are still to be promoted.
The protest that began on December 5 last year was suspended on January 3 after the Central Board of Direct Taxes (CBDT) assured that it would resolve the issue by third week of January. However, the CBDT failed to clear the promotions and the officials resumed the agitation on January 31.