Official auditor CAG on Friday pulled up the Income Tax department for not being able to retain the existing tax base in 2008-09, particularly among corporate taxpayers. “The number of assessees declined by 3 per cent compared to an increase by 7.6 per cent in 2007-08. The decline was sharper among corporate assessees, indicating, inter alia, stop-filing which would nee to be reviewed by the Board (Central Board of Direct Taxes),” the Comptroller and Auditor General (CAG) said in a report tabled in Parliament today.
The decline was at variance from the accepted notion that simple tax laws and lower tax rates promote better tax compliance, CAG said.
“It is a matter of concern that the Department which is otherwise aiming towards widening the tax base had not managed to retain the existing tax base. Evidently, the department is not utilising the mechanisms available to widen the tax base,” it said.
Though the taxpayer base grew from 271.8 lakh in 2004-05 to 326.5 lakh tax payers over the last five years, the number of tax assessees fell by 3 per cent in 2008-09.
The report also pointed out that of the 7.5 lakh companies registered with the Registrar of Companies as on March 31, 2009, only 3.3 lakh are recorded with the Income Tax department as corporate assessees, leaving a filing gap of 4.2 lakh companies.
“The Board would be advised to reconcile the discrepancy for accurate assessment of filing gap,” CAG said.
NADEY’s observations are valid.I must add that it is high time that the Indian Revenue Service’s investigative wings were strengthened to enable them to make fast and effective flights into the murky skies and depths of the hawks and the sharks;to inspect and weed out the maliciously dumped bulk of bogus assesses; to survey and bring to record those shady income earners,being the new-generation beneficiaries of the globalised economic scenario;to search for and bring to light the immense ill-gotten wealth and income stashed away in safe havens within and outside the country; and above all, to regain and fortify the confidence of the honest citizens of this country by making the fairest and the most judicious assessments in all cases without fear or favour.But alas, what we see today is a thriving fence purportedly protecting the crop which, in deed, is withering and wilting while, the marauders are making merry even in broad day light.If you have no WILL,that is the way to DOOM.
Has the CAG made a serious attempt at the causes of this decline? One possible reason is likely to be the stoppage of filing of bogus returns in the names of non-existent persons as has been done for ages by dishonest ITPs and CAs to make bogus claims for refunds/falsely applying for duplicate/triplicate PAN with ulterior motives, etc. A very large no. of “assessees” may still actually be non-existent and bogus. The now-defunct Inspection Division of CBDT once were carrying out regular checks of bogus tax payers being reported over the years by an interested section of the IT officers and staff and weeding out those bogus assessees fro the registers. The CAG may take up this job.
About Mr. Akhilesh’s comments, it appears that he is not aware that the Inspectors are kept busy now as a practice in “seva” or “collection/extortion” duties by the top to the bottom ranks of the CBDT, IT Deptt. and their super bosses. So, they have no time for official work. They are helpless, but their incomes are much higher than before and still rising.
The Inspectors of Income Tax department are ‘idle’ towards their duties. Mostly they remain engage for preparation of I.T.O. exam. The Inspectors of Income tax have been provided reimbursement of 30 litre petrol per month for ‘widening tax payers’ but authorities not paying attention. At the result, govt. loosing revenue share from corporate sectors.