11 lakh cr tax arrear difficult to recover – 11 lakh crore it arrears till 2018 and 98 percent of them difficult to recover reveals cag report
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The CAG audit of Direct Taxes has revealed that there is a gap of 208 days to 1,220 days between income tax search and initial order of attachment of property for recovery of tax evasion. The reason is that there is no time limit for issuing Provision Attachment Order. The CAG has said, “Attachment of property before the completion of assessment is such a powerful weapon in the hands of the Income Tax Department to recover from those who try to evade tax.”
If we talk about the arrears of income tax, till 2013-14 this amount was 5 lakh 75 thousand crores, which increased to 11,14,182 crores by 2017-18. While 96 per cent of tax arrears were considered ‘difficult to recover’ in 2013-14, by 2017-18, 98 per cent of total tax arrears were considered ‘difficult to recover’.
The CAG has recommended the Central Board of Direct Taxes (CBDT) to prepare a Standard Operating Procedure (SOP) for attachment of properties, which should be strictly followed. This will prevent the assessing officer from making arbitrary use of the provisions of the Income Tax Act.
The CAG has also said in its report that there are mistakes in the attachment of properties. There are also loopholes in the process of identifying properties for confiscation, which makes the process of property attachment ineffective.
It has been told in the report that the validity of all orders issued under section 281B (attachment of properties) expires many times before the full recovery of tax or many times before the completion of the assessment process. . Whereas this is a violation of the prescribed provisions. The report also states that the assessment officers are not fully following the instructions of the CBDT in collecting the details of all the properties in the possession of the respective assessees. These details are considered in the provisional attachment of the property.
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