Although the Income Tax Department is going all out to nab tax evaders in the high profile IPL-related cases, its past record shows that the agency managed to secure prosecution in barely 15 per cent of the cases. Going by this low prosecution rate, suspended IPL commissioner Lalit Modi and the franchisees he is said to have favoured, may not have much to worry about in the immediate future. That is assuming all the investigations against them result in chargesheets prosecutable in court.
“On an average the department files 80-100 prosecution cases every year related to tax evasion. The prosecution rate is about 15 per cent as numerous cases are held up in litigation in various appellate tribunals, High Courts and the Supreme Court,” a senior I-T officer said.
The department’s prosecution rate cannot be compared with any other enforcement agency as legal proceedings under the I-T Act are civil in nature and gives a number of appeal forums to the assessee against whom the department has raised tax demands, the official said.
The delays are apparently exacerbated by shortage of staff in the investigation directorates. The tax recovery held up in the disputed cases last year amounted to to a massive Rs 18,500 crore.
Any big case like the IPL which involves nationwide investigations, normally takes the department three to four years before the tax is actually collected. The IPL probe will take almost four to five months before proper notices for tax evasion under the I-T Act are issued to BCCI and various franchisees, the official said.
According to a Finance Ministry data, there are 68,382 direct tax related cases pending in income tax appellate tribunals (29,505 cases), High Courts (34,467 cases) and Supreme Court (4,410) as on September 30, 2009.
A total of 1,172 appeals were filed by the I-T department in the apex court in 2008-09 financial year against 762 during 2007-08.
Of the approved departmental strength of 62,000 across India, only 42,000 posts have been filled. The parent department remains under-staffed while large number of I-T staff are sent on deputation to other government departments and public sector undertakings.
“The department is under-staffed and has a huge shortage of investigating and prosecuting hands. This affects the quality of work that the department puts out in terms of prosecution and accrual of taxes from evaders to the national exchequer,” chartered accountant and tax expert Rakesh Gupta said.
The tax evaders have nothing to fear – either they come out through legal loopholes or with the help of their political friends. Today being tainted is no disadvantage; the only question how many thousand crores one could. Our tax administrators and tax laws are tooth less tiger and anything and everything can be managed. So why fear earn money its colour and source is not matter. We have outstanding legal luminaries also to defend these criminals
Very correct. In fact, tax evaders know it very well that this is merely a passing phase-ministers, civil servants, their minions, the go-between professionals, the lower staff in the field offices all will have a “field day” for a few years. Then the ministers will go, the top bureaucrats will retire (many of them only to become the spokesmen/authorised representatives/brokers of the accused, officers will use handling of these cases as the best basis for claiming/getting the desired transfers, the concerned officers’ childrens’ higher education abroad/weddings/settlement in life will be taken due care of and everybody will be happy. So, who’s afraid of Virginia Wolf?
These are the games the rich and the powerful play, at least in democracies.
So, there is nothing at all for these tainted IPL-mandarins to be worried about.
All this is nothing but show, and this has been the tradition of this sub-ordinate department, totally spell-bound by the orders of its superior bosses in the centre of power.