New Delhi: About 100,000 reassessment notices issued by the income-tax (I-T) department in the past years – where the income escaped from tax was above Rs 50 lakh – will be concluded by March 2024, Union Finance Minister Nirmala Sitharaman said on Monday, assuring taxpayers of a transparent, objective, and friendly tax regime.
Speaking at an Income Tax Day event in New Delhi, Sitharaman said that widening the tax base remained a priority, and that the tax collected or deducted at source (TCS and TDS) approach to “track and trace” the likely tax liabilities, along with campaigns and nudges to encourage people to come on board on taxes, would help.
The finance minister emphasised that if income tax revenues were increasing, it was not because of the hike in rates, but due to “efficiency, plugging of leakages, and formalisation of the economy”.
On tax notices, she said those were served in cases dating back to six years for misreporting of income and non-filing of returns.
The Finance Act 2021 made changes to the reassessment provisions. It lowered the time limit for the reopening of assessment to 3 years from 6 years earlier. However, if there is evidence of tax evasion of at least Rs 50 lakh, a notice can be issued within 10 years from the end of the relevant assessment year.
It couldn’t be ascertained whether the notices mentioned by the finance minister were under the new or old regime of reassessment.
She further said that as many as 55,000 one-time cases opened following the Supreme Court order had already been concluded by May.
“The Central Board of Direct Taxes (CBDT) is not sitting over notices that have been issued, and any level of discretion is being played up or people gaming the system is not happening anymore,” the FM said, adding that it was no longer a “phishing expedition”.
Talking about the various measures taken by the I-T department, Sitharaman said that tax rates had not gone up over the years, yet revenue had been constantly rising over the past three-four years.
While the department is now transparent, objective and friendly, there is still “a lingering memory” of the use of discretion by a few officers.
She added that the I-T department had shown that it was capable of exceeding the Budget targets.
“Tax buoyancy has been over one for the last six years, except for the pandemic year. Record 7.2 million income-tax returns received in one day. Average processing of returns has been reduced to 16 days; need to focus more on further automation of taxpayers’ services,” Revenue Secretary Sanjay Malhotra said during the same event.
CBDT Chairman Nitin Gupta said 50 per cent of the returns filed in the current year had already been processed. Gupta informed that 8 million refunds had already been processed this year. “We are growing at 16 per cent over last year in income tax collection. In the current year, 40 million income-tax returns have been filed already, which is 6.5 per cent higher than the previous year,” he said.
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