Chairman of the Central Board of Direct Taxes (CBDT), Prakash Chandra, has asked the income tax (I-T) department to hasten court and tribunal proceedings to meet tax collection targets in the coming quarters.
According to sources, the reason for Chandra's concern was a 17 per cent fall in the net direct tax mop-up during the April-June quarter. The direct tax collection for April-June was Rs 57,268 crore (Rs 572.68 billion), but the target could not be achieved.
There was a two-fold jump in tax refunds, at Rs 46,868 crore (Rs 468.68 billion) against Rs 15,366 crore (Rs 153.66 billion) disbursed by the department during April-June last year.
Also, the department has earned a reputation for delay in filing appeals in the courts in some high-profile tax dispute cases.
Chief Justice of India, S H Kapadia, had recently rapped it for this, seeking data on large-amount cases where the department had filed late appeals.
Appeals are supposed to be filed in 60 days in most cases and 90 days where complexities are involved. In his note, the chairman said, "Our tax counsels should ensure that stay orders on recovery notices do not become a norm."
It makes a reference to the Vodafone tax dispute case and says Rs 20,000 crore (Rs 200 billion) of tax demand is stayed by the
Chandra says the counsels should ensure early hearing in the Vodafone case and try to convince the court to make the company deposit 25 per cent of the disputed amount, with a bank guarantee for the rest, thereby endorsing the principle that a stay of recovery in litigated matters is not the norm.
The CBDT had recently sought information on undisputed tax demands, which stood at around Rs 83,000 crore (Rs 830 billion).
Parliament's standing committee on finance, in its 34th report, presented on June 30, has directed realisation of these amounts within six months.
Information was also sought by CBDT for pending tax demands of Rs 10 crore (Rs 100 million) and above, where the parties were classified as not traceable or with no or inadequate assets.
"Every possible effort should be made to track the tax payers and their assets by using the information and giving feedback urgently," Chandra said.
Among other things, Chandra has advised that cases of a demand of Rs 100 crore (Rs 1 billion) and more of companies in liquidation be pursued with the official liquidator on a priority.
Stay applications pending consideration must be disposed immediately and cases of demand covered by instalments be monitored for adherence to the time lines.
