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Syed Mahaboob Peer

It is given to understand as follows:

Only 3% of the Indian Population pays Income Tax and this is one of the lowest percentages in the world. Holding a PAN Card is the first step before paying Income Tax. According to government data, there are 203 PAN cards for every 1000 population in the country.   In terms of absolute numbers, there are 24.56 crore PAN cards in the country. (Source: on 15-03-2016).

Income Tax Department through data mining has identified 67.54 lakh potential non-filers of income tax returns (Source: DECCAN CHRONICLE dated Dec 23, 2016).

An article captioned as “PAN Cards exceeds the number of Taxpayers” published in on 25-03-2017 conveys as “The CAG report points out that the Central Board of Direct Taxes (CBDT) needs to identify the reasons for the huge gap between the number of PAN Cards and the Number of Taxpayers who actually file returns”.

In my opinion, the Central Board of Direct Taxes (CBDT) needs to assure, support, encourage & facilitate identified prospective assessees, as a first step, for diminishing the huge gap between the number of PAN Card holders and the Number of Taxpayers who actually file returns”.     For enhancing the number of Income Tax Payers, the following measures have to be taken up at once:

(1) Introducing a very simplified & hassle-free ITR Form for the First Time Filers of Return of Income & ensure harassment-free assessment, in the following manner:

Every citizen, preferably the modest income earner, deserves to be undisturbed and live peaceful, and for that reason one may be ready to pay the exact liability of tax.    Yet, fear about the powers & over empowerment of the Assessing Officers as provided under Income Tax Law, and even its misuse by the corruptive officials, is all standing hazardous in the way of voluntarily fling of Returns of Income.      For an example, if an AO misuses his powers and intentionally passes his Best Judgment order under Section 144 of the Income Tax Act, there may be Appellate Authorities to put the same before them (AAs) and plead about the Assessee’s Grievance/Objection over it, but that will not only waste the valuable time & money of the Upcoming Assessee, but also causes an un-repairable damage to his business or earning activity.     If the Tax Payers Number is to be enhanced, there ought to be a very simplified & hassle-free ITR Form for the First Time Filers of Return of Income and has to provide certain relaxations to the New & Progressive Assessees, as follows:

(A) There should not be any Scrutiny of Return/Case, in the cases of New & Small Assessees.

(B) While passing assessment orders in lieu of first 5 assessment years or first 5 “Returns of Income” voluntarily filed by every New & Small Assessees, has to approve the income declared as it is, as filed by the Assessee.

(C) Even, search & survey, reopening for Review/Revision/Re-assessment of the case should not be carried in future, as far as first 5 assessment years or first 5 “Returns of Income” voluntarily filed by every New & Small Assessees.

(D) Similarly, after passing the assessment order/s as above, only the assessee could be entitled to seek rectification, if any, as per Section 154 of the Income Tax Act, but the AOs or IT Authorities should not do so on a suo-moto basis.

(E) The New & Small Assessees ought to be defined as “all those who file their Returns of Income voluntarily declaring their Net income below Rs.10 Lacs are called New & Small Assessees for first 5 assessment years or first 5 “Returns of Income” voluntarily filed by them”.

(2) Streamline & Validate the Old and Older IT PANs issued so far, in the following manner:

A Notification need to be issued inviting all IT PAN Card holders [who are Non-filers of ITRs] to submit the following information to the Department, before closure of scheduled last date for filing, if they are interested to keep alive their IT PAN Card:

(A) The True Purpose, for which the IT PAN Card had been obtained by the holder of the same then.

(B) Then source/s of (earlier) Livelihood/Income for the survival of, by the IT PAN Card holder & his/her family and dependents:

(C) The present Profession/Business/Employment being carrying out for earning Livelihood/ Income for the survival by the IT PAN Card holder & his/her family and dependents:

(D) The places & purposes as to where & why the holder of IT PAN Card had been utilized/utilizing it:

(E) The Reason/s as to why he/she could not file the ITR for atleast one Assessment Year, so far (even declaring non-taxable income itself) even-though holding the IT PAN Card since long back:

(F) The details about the following belonging to the IT PAN Card holder & his/her family and dependents:

a) Details of Land Properties (including Agricultural Lands)

b) Details of Housing Properties holding:

c) Details of Life Insurance Policies Holding:

d) Details of Fixed Deposits, Shares, etc., if any:

e) Details of Bank Accounts holding:

(G) The total number of members in the family of IT PAN Card holder and probable monthly expenditure of his/her family:

In fact, before releasing the Notification to Press & Media, a specialized format containing scope for every minute coverage of all the above information is to be kept ready at the ASK Centers or the rest of Field Offices of the Income Tax Department, for easily obtaining the same by the IT PAN Card holders.

(3) Make a Mandate that every holder of the IT PAN Card must file regularly the ITR (even if they have Non-Taxable Income).

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  1. s prakash says:

    sir, very good article.The department in the name of the strict compliance is harassing the existing assessees and unnecessary summons are being issued and are treated very badly, specially for the deposit of the old notes in to bank accounts.The department even though have information about the non filers and not filers they try to extract from the persons who have filed the returns and thus the non filers and not filers are escaped from the tax net. If any grievance is made against the officers they try to take revenge and more harassment will follow. the department should not restrict the time barring for the belated returns, kindly allow a person to file returns for any previous years, when the department can reopen for any previous assessment year why the department should restrict the assessee from filing returns for more previous years, than one . Kindly when ever the scrutiny is taken up let the officer restrict his scrutiny to the questions or doubts he has and let him be more realistic and plain interpretation/ based on the decided judgements etc and let him not attach more imaginary meanings.Let them not cut a hen which is yielding the golden egg.

  2. S. S. KHADRI, B.B.A., LL.B. Student, says:

    Dear Sir,

    For Generate Awareness among Target Groups of prospective Tax Payers (without any investment) the best way is to utilize the valuable services of Authorized Income Tax Practitioners. As part of their professional continuation, the Income Tax Practitioners could motivate, encourage & bring in new assessees to disclose properly the income & sources thereof, and compel the Tax Papers to pay due income tax timely. Therefore, encouraging Enlistment of more and more aspirants to become “Income Tax Practitioner (ITP)” in the “Register of Authorized Income Tax Practitioners” maintained by the Jurisdictional CITs shall definitely work for generating awareness. Since, there shall not be any financial burden on Government in encouraging/allowing/introducing more & more Income Tax Practitioners. Since the scope provided to act as an “Income Tax Practitioner (ITP)” under Income Tax Law, is a self-employment opportunity, there will not be any salary, remuneration, honorarium or commission, etc., from the Government to the Income Tax Practitioners. Yet, encouraging ITPs will help the Government to mobilize funds by way of taxes from assessees. Therefore, there is need of Encourage Enlistment of more & more aspiring persons in the “Register of Authorized Income Tax Practitioners”. Thus, the CBDT must issue suitable Instructions to the concerned IT Authorities to implement, in letter & spirit, the Judgment of the Hon’ble ITAT, Agra Bench in the case of Samagra Vikas Mahila Samithi Vs CIT, Gwaliar [in ITA No.133/Agra/2013 dated 09-07-2013] in which it has clearly conveyed in Para 9 of it, a precedent that if the CIT is satisfied that the applicant fulfills only the requirement of Section 288(2) of the IT Act, the ITP would be registered with CIT and a Certificate of Registration to Practice shall be granted in his/her favour (Date of pronouncement of Order is 09-07-2013).

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June 2024