Dogged by fiscal deficits, the finance ministry has turned its focus on recovering taxes from high-profile companies which owe the government upwards of `500 crore. Income tax officials have been told to pursue tax dodgers vigorously and resolve tax disputes, if any, within two weeks. Finance Minister P Chidambaram’s message is clear—tax evaders and those who help the tax evaders will face the music.
“In income tax there is no case for amnesty. Because now almost all returns are online except a small category which was exempt. We have a huge amount of data which is being mined,” Chidambaram had said. Sources said the government crackdown is showing positive signs. While in 2009, the UPA government had launched action against 100 tax defaulters who owed the exchequer over Rs 1.41 lakh crore, the amount due from 41 defaulters until March 2013 came down to `73,000 crore. However, the list also includes amounts which are difficult to recover for various reasons such as the demands notified under Special Court and cases pending with the Income Tax Appellate Tribunal (ITAT). Of 41 defaulters in the list, at least 12 cases are either pending with the court or ITAT.
Vodafone International is on the top of the tax evaders’ list with a staggering outstanding of Rs 22,146 crore. Although, the matter was embroiled in legal tangles for some time, the company is trying to settle the dispute through a conciliation petition before the finance ministry. The state-owned Life Insurance Corporation of India needs to pony up Rs 11,606 crore to the government exchequer.
The Directorate of Recovery has also suggested that the Assessing Officers should review the stay petitions filed with them in the light of income tax instruction 1914. As per the instruction, “any stay petition filed with the Assessing Officers must be disposed of within two weeks of the filing of petition by the tax payer” and the individual or company must be informed about the decision without the delay so that tax could be collected at the earliest. According to the Central Board of Direct Taxes, merely filing an appeal against the assessment order will not be a sufficient reason to stay the recovery of demand unless the case has been decided in favour of a company or an individual by an appellate authority or court. Chidambaram also agreed that a tax matter, like any other matter in India, travels through three or four levels of adjudication and takes many years to be resolved. However, the finance ministry is hoping to increase tax collection in the next couple of months to improve the country’s fiscal health.