This refers to the editorial "Another income tax problem" (June 12). It is true that only a fraction of the population pays income tax and that evading tax or getting away with a token payment - hugely disproportionate to the dazzling lifestyle - is not considered bad or shameful. The Income Tax Department is grappling with the menace of massive tax evasion. Clearly, exhorting people to pay taxes under the slogan that they are used for development has not worked. However, asking for wider powers to send tax evaders to jail is debatable.
As rightly advocated in your editorial, it is fraught with the serious risk of misuse or mismanagement by the unscrupulous in the department and might even turn out to be counterproductive.
The use of innovative and modern techniques, including data analysis and collection of credible evidence to challenge tax defaulters, is no doubt advisable. On this subject, it must also be said that tax departments should do serious introspection to improve the quality of tax administration - both with respect to direct as well as indirect taxes. It is a poor commentary on their performance that the success rate in the tribunal and courts is very low.
Statistics have proved that demand is raised without proper examination of facts and the law. That thousands of cases are pending with tax officials shows poor monitoring and supervision by senior officers. Pitiably, taxpayers widely believe that there is no accountability for absurd and patently illegal decisions taken by erring officials. Tax departments need to come out of the unproductive work trap. This would conserve their time and energy to focus on cases involving real loss of revenue. It is high time we realise that the alarming figure of tax shown as due to the government in the cases locked up in litigation is mostly illusory.
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As rightly advocated in your editorial, it is fraught with the serious risk of misuse or mismanagement by the unscrupulous in the department and might even turn out to be counterproductive.
The use of innovative and modern techniques, including data analysis and collection of credible evidence to challenge tax defaulters, is no doubt advisable. On this subject, it must also be said that tax departments should do serious introspection to improve the quality of tax administration - both with respect to direct as well as indirect taxes. It is a poor commentary on their performance that the success rate in the tribunal and courts is very low.
Statistics have proved that demand is raised without proper examination of facts and the law. That thousands of cases are pending with tax officials shows poor monitoring and supervision by senior officers. Pitiably, taxpayers widely believe that there is no accountability for absurd and patently illegal decisions taken by erring officials. Tax departments need to come out of the unproductive work trap. This would conserve their time and energy to focus on cases involving real loss of revenue. It is high time we realise that the alarming figure of tax shown as due to the government in the cases locked up in litigation is mostly illusory.
T R Rustagi, New Delhi
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201 · E-mail: letters@bsmail.in
All letters must have a postal address and telephone number