Not just raids, need fear of jail to scare tax evaders: CBDT

The department has asked the field staff to add at least 25 lakh new assessees every month — a stiff target by all counts considering that it is nearly equivalent to the number of new assessees added annually.

Written by Shruti Srivastava | New Delhi | Published: June 5, 2015 3:01 am
Income tax, Tax, gst, gst rates The department has asked the field staff to add at least 25 lakh new assessees every month — a stiff target by all counts considering that it is nearly equivalent to the number of new assessees added annually.

In a strongly worded advisory, the Income Tax department has asked its officials to go beyond just raids and searches to target tax evaders. The Central Board of Direct Taxes (CBDT), in a recent missive to its field officials, has stressed the need to instill the fear of “incarceration and consequent loss of liberty and social opprobrium” among tax evaders by way of speedy prosecution and penalties.

Further, the department has asked the field staff to add at least 25 lakh new assessees every month — a stiff target by all counts considering that it is nearly equivalent to the number of new assessees added annually.

The CBDT has told its officials to change their mindset from using searches as a revenue augmenting tool to creating credible deterrence by sustainable penalties and prosecution so that “potential evaders desist from crossing the red line”.


According to an analysis on the effectiveness of search and seizures conducted in 2005-06, 2006-07 and 2007-08, it was found that the outlook of these coercive actions was “extremely poor” with regard to prosecution and penalty sought. Also, it was found that most of these cases were not prosecuted under Section 276C(1) for wilful attempt to evade tax.

“The searches have become limited to mere detection of tax evasion, and that too mostly based on admission,” an official told The Indian Express, adding that repeat searches in same groups within a short span of time showed that they were not an effective tool to deter tax evaders.

“Deviant assessees take minor financial hiccups in their stride and promptly return to their wayward ways. What scares them is the fear of incarceration and consequent loss of liberty and social opprobrium that it brings. It is to this fear that a search or survey action must address itself,” the advisory said, adding that effective deterrence was needed to meet the target of adding 25 lakh new assessees every month.

The monthly target is sharply higher than the normal annual rate of growth in the number of assessees — the number of assesses grew from 4.07 crore to 4.26 crore in 2011-12. The figure increased to 4.58 crore in 2012-13 and 4.70 crore in 2013-14.

The advisory comes amid the government’s attempts to curb black money by bringing in a legislation with harsh punishments for those who stash black money abroad. Another legislation for benami transactions is also being considered by parliament to tackle the menace of domestic illegal funds.

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Up to December 2014-15, the Income Tax department had conducted searches in 414 groups and seized undisclosed assets of Rs 582 crore while undisclosed income to the tune of Rs 6,769 crore was admitted by the taxpayers during these searches. In 2013-14, 569 groups were searched and total assets seized during the period stood at Rs 807.84 crore while Rs 10,791.63 crore of undisclosed income was admitted.

With regard to prosecution, convictions were obtained in only 51 of the 244 cases filed in 2010-11; 14 of the 209 cases in 2011-12; and 15 of the 283 prosecutions in 2012-13.

Pointing to “apathy and lethargy” among officials in undertaking investigations to establish a case beyond reasonable doubt and then processing it for prosecution and penalty, the CBDT asked senior officials to effectively monitor such investigations and launch prosecution without waiting for the outcome of the appellate process.

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  1. C
    Jun 5, 2015 at 6:59 am
    The Officials of IRS and Revenue services were mired in lot of controversies of late: corruption and bribing Ministers for posting in lucrative zones; accepting gifts like Gold bars and diamonds; hounding honest tax payers who erred in ommission and commission and bargaining heavy bribes and CBI officials and other Senior bureaucrats returns were specially investigated and black mailed tactics adopted as a sort of continue their fiefdom. Is it appropriate for the Government to unleash these jackals on common public. The revenue Government collects on IT Department a lions share goes to their wage and pension bills. Chidambaram dolled out cadre revision and a lot of induction to perpetuate this. Do we really want this? Unfortunately there is no overseeing mechanism except the Parliament. The Parliaments are busy in their own World and least bother about these things.
    1. M
      Jun 5, 2015 at 10:50 am
      Where is all our taxes going? Where is the accountability - how does Rajas and Marans and Balus and Chidambarams make fortunes by being mere public servants? Why are MLAs and MPs living off our taxes? Why should anyone pay taxes if Government is not spending money for public welfare and is allwoing a few to loot our hard earned money? where is the accountability - does it only stop with ry earning working cl mes? Can CBDT ensure how taxes collected are accounted for?
      1. O
        Jun 5, 2015 at 8:18 am
        What lies they tell us!!!!!!!!!!! FM claims for the rampart that he is going to have a friendly tax department and start the adversary system. No we have the department telling the officers to put behind bars? So who do you think will be landing behind bars? Crooked politicians, bribe taking Income tax officers, Bribe taking Police officers or the honest tax payer? A bigger opportunity for Baksheesh for the Tax Officers. Stop lying Mr FM
        1. S
          Jun 5, 2015 at 11:35 am
          The fear of jail is needed most for the officers of IT dept who are corrupt, har honest tax payers and are absolutely tax payers unfriendly. First improve working of IT Dept itself before threatening the tax payers. Are you listen ending Mr. Jaitley?
          1. S
            Jun 5, 2015 at 4:27 am
            Jail will not set president. Need to do like Nar. Hang them in public. You may need to hang three or four. All other will surrender without asking.
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