Mumbai, May 27, 2018
The tax-payers' liability does not get extinguished even if it is written off for the time being, says a CBDT (Central Board of Direct Tax) official
Apparently failing to recover massive tax dues from various corporate tax-payers in the country, the Income Tax Department (ITD) has now started "writing off" thousands of crores of tax arrears by such defaulters, according to RTI replies. This, despite the fact that the ITD is sitting on a pile of Rs. 50,000 crore of tax arrears all over India, according to available figures, with the highest -- Rs. 33,157.97 crore -- due in Pune, Maharashtra, alone. The revelation has come from several replies given by I-T offices under various principal chief commissionerates of Income Tax (PR-CCIT) to RTI activist Chandra Shekhar Gaur, based in Neemuch, Madhya Pradesh.
When contacted, a top official of the Central Board of Direct Taxes (CBDT), New Delhi, admitted that there were certain provisions by which tax dues may be written off in certain cases.
"However, the tax-payers' liability does not get extinguished even if it is written off for the time being. When we learn that the party's financial situation has changed, we immediately initiate recovery proceedings as per law," the CBDT official, who requested anonymity, told IANS.
The official said the procedure (to write-off) was very long-winded, time-consuming and goes through various levels, depending on the amount and required clearances from different authorities.
At least two PR-CCITs -- Hyderabad and Pune -- having huge tax arrears, have admitted to 'write-offs' of unpaid taxes, Gaur told IANS.
Pune's Deputy Commissioner of IT (Hq-Admin) and the Central PIO, Harshit Bari said that the PR-CCIT here had notched up Rs. 33,157.97 crores as arrears pertaining to Direct Taxes.
Against this, it had also written off a wee amount of Rs. 12.57 lakhs, but the period for the waiver or the names of the beneficiaries are not specified. Hyderabad's Income Tax Officer (Hq-Tech) and the Central PIO, K. Srinivas Rao has replied that the PR-CCIT (Andhra Pradesh, Telangana and Hyderabad) had piled up consolidated arrears of Rs. 1644.78 crore as of 2017-2018, which it had "completely written off".
Additionally, it had written off an amount of Rs. 1,357.42 crore for the previous fiscal 2016-2017 - thus, totaling to Rs. 3,002.20 crore for only two years.
Experts say that PR-CCIT Hyderabad replies indicate it is barely making efforts to recover its massive dues/arrears and has apparently written off the entire amount to be recovered from the tax-payers in the past two years alone. In Chandigarh, the Jt. CIT (OSD) has admitted arrears of Rs. 70.93 crore and Ward 4(2) has shows recoverables of Rs. 10.31 crores. But a single Ward No. 3(4) of ITO, Amritsar has notched up Rs. 2,369.81 crores as arrears.
The DCIT Circle-7, Ludhiana has unrecovered arrears of Rs. 69.57 crore while ITO Ward 2(1) shows dues of Rs. 5.60 crore. DCIT Circle (2) Bathinda has dues of Rs. 58.34 crore.
The PR-CCIT Rajasthan has piled up Rs. 6,419.57 crores. Additionally, it said it had to recover penalties of Rs. 1,202 crore and Interest of Rs. 1,618 crore.
The PR-CCIT, Tamil Nadu & Puducherry, has arrears of Rs. 3,553.09 crores due from defaulters. It has also gone a step further to provide a published list of 24 top defaulters from that region.
In Chhattisgarh, the DCIT (Central-1) has arrears of Rs.133.81 crore while the ACIT (Central-2) has an unrecovered pile of Rs. 3,298 crore.
Gujarat's Gandhidham ITO Ward-1 has dues of Rs. 261.23 crore and ITO Ward 1(3)(2) has Rs. 17.19 crore dues. ACIT has Rs. 217.90 crore due from defaulters.
In Surat, Addl.CIT Range 2(1) has dues of Rs. 140.56 crore and Valsad Ward 3 has Rs. 7.13 crore as recoverables.
Mumbai's ITO 20(3)(2) at Parel has revealed a small figure of Rs. 1.01 crore and ITO 20(3)(5) Rs. 1.03 crore as recoverable. DCIT Central Circle 2(2) has admitted to Rs. 716.62 crore arrears while ITO Ward 11(3)(3) has Rs. 12.40 crore dues.
In Madhya Pradesh's Bhopal ITO 5(2) has arrears of Rs. 20.50 crore and the Jabalpur IT0 Ward 2(3) has dues of Rs. 14.62 crore.
"These figures are a matter of concern. The IT department has notched up over Rs. 50,000 crore as arrears but failed to recover most of it. Pune and Hyderabad IT have even gone ahead to 'write off' an amount of Rs. 3012.13 crore between them," the expert pointed out.
He said like the current trend among banks, even the ITD seems to be in a "forgiving mood" for defaulters who don't cough out taxes, while the honest small tax-payers and the service classes with tax deduction at source (TDS) continue to pay up without fail, or face the music.
Mumbai's tax-consultant and Chartered Accountant Poneet Gupta said that arrears may be written off when the assessee is untraceable or bankrupt, but there is no procedure under the IT Act to "write off" arrears.
"Under the General Financial Rules, 1963, powers to sanction write-off of the revenue have been delegated by the centre to the IT authorities based on the amount (of write-off) and seniority of the officer," Gupta told IANS.
Meanwhile, an email with specific queries on the issue and reminders to CBDT on May 16 by IANS remains unanswered.