The menace of tax evasion is "spoiling" the culture of compliance in the country and the Income Tax department will ensure that chronic evaders are not able to get away without facing court cases, a top CBDT official today said.
"We try to ensure that our tax regime remains non-intrusive....But there are certain people or cases against whom intrusive action is required. Because not everybody is willingly compliant. We have the powers of search and seizure under the Income Tax Act...We all know that there is large tax evasion happening in certain cases and we have to use that power of search and seizure (to clamp them down).
"We just don't want to get penalty and unpaid tax from the evader. We don't want to do that. Because, for us, tax evasion is not only a menace in that sense, it is also spoiling the entire compliance culture (in the country) because the people who are tax compliant feel that the system is unfair," Central Board of Direct Taxes (CBDT) Chairperson Anita Kapur told reporters here.
CBDT is the apex policy making body of the I-T department.
She added there are chances that by witnessing such a lax system of tax enforcement, even compliant taxpayers would "waver" from their duty saying why should they pay taxes when others can skip it. Kapur added that "demonstrative action" by the taxman is required against evaders.
"This (not catching the evader) will encourage a system where a person who is outside the tax system will continue to remain outside the tax system," Kapur said adding there was a large tax constituency which is not covered under the Tax Deducted at Source (TDS) regime like for example small traders.
"Such people do not file the return and wait thinking something would be done once the taxman comes calling with a search or a survey. We don't want that message to go," she said.
"Our focus should not be collection and it should be taken to a logical conclusion which is that an evader not only pays penalty (on the tax evaded) but also be prosecuted," she said.
