Business Standard

Tax department will have fewer raiding parties

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Subhomoy Bhattacharjee New Delhi
 The move to do away with tax raids follows the shift in emphasis by Finance Minister Jaswant Singh on raising tax revenue by voluntary compliance only.

 Senior officials said the government was considering a plan to reduce manpower at different levels, those now deployed for search and seizure activities of the income tax department.

 They also said the personnel so released will be redeployed in other divisions of the Central Board of Direct Taxes (CBDT). The investigation wing of the CBDT currently employs about 3,000 people. It is headed by a member (investigation) at the board level.

 At the field level, there is a chief commissioner (investigation), who heads the investigation team.

 While the extent of the downsizing is being worked out, sources said with the exception of Group A officers, very few staff would be left in the wing.

 If necessary, the wing will borrow staff from the other wings to man search parties in the premises of the assessees.

 To ensure that tax defaulters do not get away, the CBDT will instead depend on the yet to be launched Tax Information Network (TIN) to track high-value transactions.

 The Budget for 2003-04 has already clipped the wings of the search and seizure operations by removing the provision of block assessment, under which the government was so far able to allow defaulters to pay their tax arrears by getting their entire liability assessed at a penal 60 per cent rate of interest.

 In return, the department will drop penal provisions against the assessee.

 Singh has said the income tax department will have to work hard to remove the fear psychosis among the public about the department.

 In such a milieu, the search and seizure operation wing was almost an anachronism.

 Officials said the emphasis was to ensure that the need for taking unpleasant action should be reduced to the minimum.

 In his speech to the chief commissioners of the income tax department last month, Singh said the proverbial raids were an invasion of the citizen

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First Published: Aug 15 2003 | 12:00 AM IST

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