E-Paper
Taxmen want to use arrest power against wilful defaulters
NEW DELHI: Soon, income-tax officials may get powers to arrest and detain wilful defaulters more frequently, and even auction attached assets within a year. What’s
NEW DELHI: Soon, income-tax officials may get powers to arrest and detain wilful defaulters more frequently, and even auction attached assets within a year. What’s more, the taxmen can also ask the finance ministry to “block” Permanent Account Number (PAN) of such entities, to stop them from filing returns or availing the benefit of LPG subsidy.
The department will also share the same data with banks, credit information company CIBIL and the Registrar of Properties, to prevent such defaulters from getting loans and overdraft facilities, and stop sale or purchase of immovable properties.
These are part of the suggestions mooted by the Central Board of Direct Taxes in its “Income Tax Department’s Central Action Plan for 2016-17”, presented at the recent conference of tax officials. The suggestions, however, need to be vetted by the finance ministry, before they are actually implemented.
According to the suggestions, the I-T department can use the provision of arrest and detention, which was used sparingly till now, under Section 276C (2) of the Income Tax Act. Taxmen can also attach properties, but it involves a longer timeframe. The provisions also include rigorous imprisonment between three months and three years.
Moreover, tax recovery officers (TROs), who deal with such defaulters, should “monitor” their works, “especially in the area of attachment and sale of property, to ensure that the attached properties are sold within one year.”
Sources in the tax department, however, said that one year was too short a time, and the government would need to amend the I-T Act to implement the suggestions.
The supervisory officers “may also instruct” the TRO or the assessing officer of a case to monitor cases, which are being heard in the Debt Recovery Tribunals (DRTs). “They (TROs) should consider lodging of claims of outstanding demand in such cases before the DRT. At any level of a default case, the department’s interest of getting taxes is supreme and hence the TRO is being directed to pursue the cases up to the level of DRTs too.
“By using these new strategies, the department also ensures that a strong message goes to all such people that the taxman will not let it go easily,” a tax official said.
Meanwhile, in a clarification issued later in the day, the government sought to downplay reports that officials have been directed not to shy away from using provisions of arrest, detention and auctioning of attached assets of income-tax defaulters, and said they were only suggestions. “No such statement has been authorised by the income-tax department. Though the provisions for arrest and detention by tax recovery officers in respect of non-compliant tax defaulters are contained in the income-tax Act, these are used extremely sparingly,” the CBDT said in a statement
According to the strategy paper, the number of non-filers rose sharply to 58.95 lakh in 2015, from 22.09 lakh in 2014 and 12.19 lakh in 2013. “Ensuring compliance from identified non-filers with potential tax liabilities is key to widening of the tax base.”
Beginning last year, the I-T department has started to ‘name and shame’ large tax defaulters (with defaults of over ` 20 crore) by publishing their names and other credentials in leading national dailies and on its official web portal. Till now, the department has released names of 67 such entities.
