Nearly 8,500 income tax officers on protest; HNIs and corporates enjoy breather
February, 04th 2012
For some time, well-heeled individuals and corporates may not lose sleep over fears of tax sleuths knocking on their doors.
Close to 8,500 gazetted income tax employees in the rank of I-T officers (ITOs), assistant commissioners and administrative officers have gone on a nationwide agitation. The outcome, said tax circles, will be fewer tax surveys and raids.
"Their priority is now processing refunds rather than quickening recovery," said a senior official with the tax office. While it's unclear how long the agitation will continue, high net worth individuals and companies with unreported income will enjoy the breather as long as it lasts.
The raids at liquor baron Ponty Chaddha's premises in Uttar Pradesh and New Delhi were the last such exercise carried out by tax officials.
"There will be no searches and surveys. We will not send any reports to the Central Board of Direct Taxes (CBDT)," said Rajesh Menon, secretary general, Income-Tax Gazetted Officers Association. The gazetted officers, upset over the delay in filling up vacancies and promotions, have said there will be no TDS surveys, inspections, verifications or any recovery surveys.
The government has pegged direct tax collection target at Rs 5.33 lakh crore for 2011-12, about 20% higher than the actual collections in FY11. But due to fears of missing the selloff target, it is nudging the department to collect 10% more than the target.
The government has recently empowered tax officials to visit residences of high net worth individuals ( HNIs) to verify unaccounted high-value transactions. But the agitation, said Menon, could impact collections.
According to a recent presentation made to the CBDT, as of September 2011, there were 710 vacant posts of assistant and deputy commissioners. In November, around 140 gazetted officers were promoted to the rank of joint commissioners, taking the total vacancies to 850, or 40% of the total sanctioned strength of 2,100 at that level.
ITOs assess the books of those with annual income below Rs 10 lakh while assistant commissioners and deputy commissioners assess taxpayers with income over Rs 10 lakh. Those in the ranks of joint or additional commissioners, commissioners and chief commissioners have supervisory role.
"More than 40% of assessees with annual income over Rs 10 lakh are not monitored at present," said an income-tax officer on condition of anonymity. The staff crunch has resulted in increased workload on serving officers, affecting their ability to scrutinise returns.
The officials are also protesting against the recent cadre restructuring wherein the increase in the number of supervisory officers was much higher than field officers. The high number of vacancies in the department could undermine the government's effort to check generation and circulation of black money.
Income-Tax Gazetted Officers Association had launched the agitation in October, but called it off on December 31 following assurances from the then CBDT chairman that promotions will be fast-tracked. But with their demands unfulfilled, the officials have resumed the agitation.
Some within the department think the agitation is unlikely to have a serious impact on revenue collections. The number of searches and surveys has dipped this year. Between April and October, 2,190 search warrants were executed as against 2,548 in the year-ago period. The income detected too plunged to Rs 3,887 crore from Rs 18,750 crore in April-October 2010