Mohan Padmanabhan

The Central Board of Direct Taxes (CBDT), in a bid to achieve the budgeted 16.25 per cent increase in direct tax collections of Rs 2,67,490 crore (both corporation and personal income-tax) in 2007-08, has urged the cadre-controlling Chief Commissioners of Income Tax to finalise assessments in search cases quickly.

It is learnt that Chief Commissioners and Commissioners have been asked to identify such companies in their charge which are liable for tax on distributed dividend as per the provisions of Section 115O and monitor timely payment for the current fiscal.

In cases where a major audit objection has been accepted, the Department has been advised to expedite orders for remedial action and ensure appropriate recovery of taxes within the year itself.

According to CBDT sources, the Administrative Commissioners have been directed to review assessments on a priority basis and forward specific findings whether the case is one of under assessment, proper or over assessment.

The Chief Commissioners, sources point out, have been instructed to review the work of Commissioners, and the CBDT members in turn will monitor both CCsIT and CsIT.

As per the Action Plan for 2007-08, three areas identified as having substantial gain to revenue are said to be house property income, which is shown as business income in order to evade taxes, treatment of premium received on issue of shares by private companies and builders who show income on project completion basis so that income is not taxed on year-to-year basis.

According to CBDT sources, the Department has drawn up a four-pronged action plan for direct tax collections, which will focus on assessment-reassessment of cases and issue of refunds; improving advance tax collection; increasing collection by way of TDS and recovery of arrear demand.

It is learnt that a major area of concern was the number of liaison officers maintained by foreign companies in India, some of whom, according to sources, may actually be carrying out business in India while posing as liaison officers.

The CBDT has decided that refunds of Rs 1 crore and above in the case of Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad and Pune, and Rs 25 lakh and above for other stations, shall be issued by assessing officers after obtaining prior administrative approval of the Commissioner of Income Tax concerned.