Bill to be cleared only in March, raises concerns over taxpayer harassment
TWO days after Prime Minister Narendra Modi raised the issue of too few Indians paying income tax, the government has set a daunting collection target of Rs 2 lakh crore for the Income Tax department through the new amnesty scheme Vivad se Vishwas in the next 45 days ending March 31, 2020 even as the scheme ends only in June 2020, sources told The Indian Express.
The Bill is yet to be passed — it is scheduled for the first week of March — and yet tax officers across the country have been asked to get cracking, raising concerns of harassment of both assessees and taxmen. More so since the Central Board of Direct Taxes has linked the performance of tax officials in collecting money under the scheme to their future postings.
The Prime Minister’s Office (PMO) has taken ownership of the scheme and has set up a special cell that includes Revenue Secretary Ajay Bhushan Pandey and P C Mody, chairman of CBDT, which is expected to meet once a week to monitor collections under the scheme, sources said.
The Vivad se Vishwas scheme aims to settle as many as 4,83,000 direct tax cases pending in various appellate forums i.e. Commissioner (Appeals), ITAT, High Courts and Supreme Court.
The stress on tax collection through Vivad se Vishwas scheme assumes significance as sources said the tax department is staring at a shortfall in revenue collection of up to Rs 1.25 lakh crore this fiscal despite the Union Budget 2020 revising direct tax collection for 2019-20 to Rs 11.80 lakh crore from the earlier target of Rs 13.35 lakh crore.
The I-T department has so far collected only Rs 7.40 lakh crore in direct taxes, said CBDT chairman Mody last week.
Originally, the Bill proposed that a taxpayer would be required to pay 100 per cent of amount of the disputed taxes and get complete waiver of interest and penalty provided he pays by March 31, 2020. Now, the Cabinet has passed this amendment to include two rates to quickly meet targets under the scheme.
In cases where the tax department has won the case in a lower forum and the assessee is in appeal, the rate remains at 100 percent of disputed tax.
However, in those cases pending in ITAT, High Court and Supreme Court, where the department is in appeal (i.e. the assessee has won in the lower forum) then the assessee can settle by paying 50 percent of the disputed tax.
This is how the department plans to bring even those assesses who had won at the lower forums under the fold of the Vivad se Vishwas scheme. Essentially, the tax man is telling assessees to pay up 50 percent and get the assurance of ending litigation in these cases.
Revenue Secretary Pandey, addressing members of CBDT and the top IT commissioners on February 13, directed the department to promptly move courts across the country in tax disputes where the department has lost the case at lower legal forums against an assessee.
All Commissioners of Income Tax (Appeals), have been asked to quickly decide cases of tax disputes and pass orders so that it can be taken to the legal forum. Assessing officers have been asked to calculate and compile the exact dispute amount in each case pending in legal forums.
They have been asked to segregate the categories of assessees into segments such as Central and state public sector units, government contractors, large assessees and foreign companies.
The CBDT wants the tax department to be prepared with exact data of tax disputes lying in different legal forums so that once the Direct Tax Vivad se Vishwas Bill 2020 is passed by Parliament in the first week of March, assessees can be “persuaded” to apply for the scheme. Principal Chief Commissioners of the IT department have been asked to monitor the progress of the department on a daily basis.
Top tax officials “may give details of their performance in respect of Vivad se Vishwas scheme in the self-appraisal in the APAR (Annual Performance Appraisal Report) for FY 2019-20.Details of the number of disputed cases, amount involved in disputed cases as well as the number of cases resolved and the amount collected under the scheme may be reported in the self-appraisal,” said a CBDT office memorandum given to all principal chief commissioners during the meeting on February 13.
“The performance of officers in respect of Vivad se Vishwas scheme will be specifically commented upon by the reporting and the reviewing officers and shall be an important factor in determining their future postings,” said the memorandum signed by Rakesh Gupta, Commissioner of Income Tax (C&S ), CBDT.
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