Income tax department in race against time to meet target

MUMBAI: The taxman is in for a chase with revenue from income tax (I-T) trailing a stiff target.

Tax collection till the third week of February was a little less than Rs 8 lakh crore as against a target of Rs 12 lakh crore, said a senior I-T official.

The numbers, professionals believe, could intensify the department’s recovery drive and result in delaying of tax refund.


According to figures compiled by the department from various regions, ‘total net collection’ as on February 20 was Rs 7,79,459.7 crore — roughly, Rs 7.79 lakh crore. Mumbai, which accounts for the largest I-T collection, recorded 7.4% increase in collection to Rs 2.39 lakh crore from Rs 2.22 lakh crore while I-T tax collection Delhi, the second largest region, is up 27% to Rs 1.2 lakh crore from Rs 94,754.3 crore in the previous year.

ET‘s email to a CBDT spokesperson on the tax collection number went unanswered.

“Given the shortfall so far, we have seen that tax authorities are taking somewhat aggressive stand in not releasing refunds determined as payable to taxpayers or adjusting them against tax demands raised in latest assessment orders even though taxpayers are otherwise entitled to stay on disputed tax demands as long as they deposit 20% of such demands where appeals are filed with first appellate authority," said Sanjay Sanghvi, tax partner at Khaitan & Co, a law firm.

Tax officials, evidently under pressure to meet the revenue target which was revised in the Interim Budget, are working on weekends and even on some of the public holidays. Soon after taking charge, P.C,Mody, chairman of the apex body, Central Board of Direct Taxes (CBDT), told senior I-T officials that the “immediate priority” of the tax office would be “maximizing Revenue collection”, but this “must be done without any harassment or high handedness on the part of officers”. “Our conduct must be impeccable, friendly, yet objective -without fear or favour as we move towards becoming a nonadversarial regime,” said the communique from Mody, whose style and approach on the subject, say tax officials, is different from the outgoing CBDT chairman Sushil Chandra.

“Collection is growing by about 12.5% against an asking rate of 19.5%... it’s a challenge,” said an I-T official.

According to Mitil Chokshi, senior partner at the chartered accountant firm, Chokshi & Chokshi, the department has been very active in issuing summons or conducting surveys on assessees who have deducted the TDS but have not deposited the same to tax authorities.

“It’s also going after assessees who are yet to deposit self-assessment tax or tax on regular assessment of earlier periods. In metros, TDS is a significant source of tax... Assessees are also questioned about a lower deposit of Advance Tax (compared to the previous year’s or previous quarter’s),” said Chokshi. Other measures, he said, include attaching bank accounts of assesses, issuing notices to — and even initiating prosecution against — directors of companies which have defaulted in tax payment.

The surveys, said an official of a company, can be very tiring and go on for hours with the staff made to wait in a room, often till midnight, with their phones either switched off or taken away, and statements, even on irrelevant issues, recorded by the tax department officials.

“In appropriate cases, assessees should approach committee looking into highpitched demands. It’s an option given by the tax administration with the committee empowered to stay a demand without the assesssee having to mandatorily pay 20% in other cases," said senior chartered accountant Dilip Lakhani.