The CBDT Chairman Vs Chief Justice of India, regarding the tax collections. Big conflict between executive and Judiciary. Both statements are general

The CBDT Chairman said that a shortfall in tax collections is not negotiable despite a cut in the corporate tax rate, and that this short fall of Rs 1.36 lakh crore has to be recovered with extra efforts.

The board of the Central Board of Direct Tax (CBDT), after not being satisfied with current pace of tax collection, laid out a strategy for improvement, and set a target for carrying out tax surveys for respective regions.

The board, along with CBDT Chairman PC Modi, carried out a video conference with the Chief Commissioners of all Income Tax branches and other high-level officers.

The CBDT Chairman said that a shortfall in tax collections is not negotiable despite a cut in the corporate tax rate. The CBDT mentioned in the meeting that this short fall of Rs 1.36 lakh crore has to be recovered with extra efforts. In Mumbai itself, a short fall of Rs 32,000 crore is expected from the target of Rs 13.36 lakh crore for FY20.

A source who attended the meeting told Moneycontrol, "CBDT has laid down strategies for collecting more tax in the next two months. These include identifying those companies that have discrepancies in the payment of Good and Service Tax and Income Tax, and taking 20 percent of this amount from those companies whose appeals are pending at the Commissioner level. Currently, appeals worth around Rs 3.6 lakh crore are pending at the CIT level, from which 20 percent of the money will directed to the tax collection kitty."

Another source told Moneycontrol, "In Delhi, the TDS survey on shopping malls were successful, so we would expect to begin this exercise in other parts of the country as well."

A tax deducted at source (TDS) survey is carried by the tax department to check the large scale non-deduction or under-deduction of tax at source, and non-deposit of tax already deducted.

"Along with that, the state government, and the panchayats, should collect TDS amounts from companies so the that the tax department access the money trail to collect amounts that were not deducted, if any," added the source.

After the resolution of cases under the Insolvency and Bankruptcy Code (IBC), banks are also expected to pay significant amounts in tax. Earlier, banks and financial institutions would write off their Non-performing assets, an exercise that gave tax benefits. Some banks have now received money due to the resolution of cases under the IBC, and are expected to pay tax where they have written off earlier.

CBDT has also identified 20,000 cases to carry out a general survey. Every region will carry out two surveys per week till March end.

CBDT mentioned that there are more than 40,000 pending cases for recovery, which amount to more than Rs 5 lakh crore. The CBDT also expected these cases to give a large amount in taxes.

CBDT also proposed a crackdown on the Directors of shell of companies that are not accessible and recover tax.

CBDT laid down the criteria for 11 high risk cases that will be shared to the Commissioners soon. These should be high cash deposits and withdrawals, returns in IT and GST, discrepancies in import-export data, discrepancies in the buying and selling of immovable properties, and discrepancies in the data of custom and financial intelligence unit inputs.

Above is the message from the executive side of Tax.

The action has to undergo the test of Judiciary. The chief Justice of India has opined as under, he was speaking at an event held to mark the 79th foundation ceremony of the Income Tax Appellate Tribunal.

Chief Justice of India SA Bobde asked the central government to take steps to reduce the tax burden on citizens and ensure the country's all-round development.

Speaking at an event held to mark the 79th Foundation ceremony of the Income Tax Appellate Tribunal in the national capital, Chief Justice Bobde said that "excessive taxation" can be seen as a form of social injustice imposed on the people. "While tax evasion is social injustice to fellow citizens, arbitrary or excessive tax also results in social injustice by the government itself," he added.

The top judge's suggestion comes at a time when the country's economy is going through a worrying growth slowdown amid high inflation and a weakening rupee. Retail inflation rose to about five-and-half year high of 7.35 per cent in December 2019, further increasing the burden on the common people, mainly due to spiralling prices of vegetables such as onions.

The spiralling inflation has helped sharpen the opposition's attacks on the government. Congress leader Rahul Gandhi recently said that unemployment and rising prices of essential commodities have thrown the country into a state of "financial emergency".

Opposition parties also claim that the country's trading community is still suffering because of the "hasty introduction" of the Goods and Services Tax (GST) regime in 2017. 

In his address, Chief Justice Bobde also stressed on the part played by the Income Tax Appellate Tribunal in ensuring that taxation-related disputes are resolved swiftly. "Tax judiciary plays a very important role in resource mobilization of the country. A just and speedy dispute resolution is perceived as a tax incentive by the taxpayer. To a tax collector, an efficient tax judiciary ensures that demands arising out of legitimate assessments are not strangled by delayed litigation," he said.

Coming to the business sentiments, it is very low at this juncture, and the government is trying desperately to take the country towards the path of growth. How will it happen?