Finance Minister Inaugurates the 27th Annual Conference of Chief Commissioners and Directors General of Income Tax
Asks Department to prepare itself for Transition from the Income Tax Act 1961 to the Direct Tax Code Bill Regime
Calls it Officers to Strive Hard to Achieve Tax Collection Target of Rs.5.33 Lakh Crores for 2011-12
The Union Finance Minister Shri Mukherjee said that for the Financial Year 2011-12, the Income-tax Department has been given a tax collections target of about Rs.5.33 lakh crores, which is at 20 per cent growth over the actual collections of the preceding year i.e. 2010-11. He said that the 13th Finance Commission (2010-15) has projected direct tax revenue collection at Rs.8.3 lakh crore by 2014-15 and direct tax GDP ratio at 7.62 per cent. The Direct tax GDP ratio as of now is 5.66 per cent. The targets are very steep and challenging. The Union Finance Minister ShriPranab Mukherjee said that international economic situation is nor very conducive and highly uncertain. He said that global recovery is very slow and sluggish. Beside, the international commodity prices of energyespecially fossil fuel is quite volatile causing inflationary trend. Shri Mukherjee said that this will adversely impact the GDP growth and liquidity position in the world market. In this situation, the Union Finance Minister Shri Pranab Mukherjee said that officers of the Income Tax Department would have to work very hard to achieve their tax collections targets for the current year and strictly comply with tax compliance regime.
The Union Finance Minister Shri Pranab Mukherjee was addressing the senior officers of Income Tax (IT) Department after inaugurating the 27th Annual Conference of Chief Commisssioners and Director Generals of the IT Department at Vigyan Bhawan here today.The inaugural function of two days Conference was also attended by ShriS.S.Pallanimanickam, Minister of State(Finance), Shri Namo Narain Meena, MOS(Finance) Ms Sushma Nath, Finance Secretary and Expenditure Secretary, Shri Sunil Mitra, Revenue Secretary, Shri Sudhir Chandra, Chairman, CBDT, Members of the CBDT and senior officials of the Finance Ministry among others.
The Union Finance Minister Shri Pranab Mukherjee earlier congratulated the officers and employees of the Income Tax Department for their efforts in achieving the revised tax collections target as per budget estimates of Rs.4.46 lakhcrores for Financial Year 2010-11. Shri Mukherjee was inaugurating the 27th Annual Conference of Chief Commissioners and Directors General of Income Tax, here today, Lauding the Department for being at the forefront of mobilizing tax for the Government, Shri Mukherjee said that the collection of direct taxes has almost doubled in the last four years from Financial Year 2006-07 to Financial Year 2010-11. This has been made possible due to rationalization of tax structure, improvement in tax administration and tax-payer’s services through intensive use of technology, and unrelenting efforts put in by the officers and employees of the Income-tax Department, the Minister added.
The Finance Minister said that the performance is all the more commendable in Financial Year 2010-11 as refunds of about Rs.74,000 crores in about 85 lakh cases were issued as against refunds of about Rs.57,000 crores in about 50 lakh cases in Financial Year 2009-10. The Minister expressed happiness on being informed that the Department is maintaining momentum in issue of refunds in the current fiscal year also and has issued refunds of about Rs.23,000 croresin about 20 lakh cases in the month of April, 2011. This has also been appreciated widely by the tax-payers throughout the country and will go a long way in deepening the credibility of the Department, he added .
Shri Mukherjee said that Direct Tax Code Bill is under examination of Parliament Standing Committee and will be effective from April 1, 2012. Therefore, Department should prepare for transition from the Income Tax Act 1961 to the Direct Tax Code Bill regime, he said. The Finance Minister said that it would include various issues like redrawing of business processes, rules, forms, training needs of manpower and the necessary infrastructure. This task should be completed in a mission mode to avoid any inconvenience to tax-payers and also to maintain continuity in revenue buoyancy, said the Minsiter.
Shri Mukherjee said that the ongoing computerization programme of the Income tax Department needs to be effectively utilised to optimize the collection potential. It may require the up-gradation of current Data Mining and other initiatives for Data Warehousing Solutions for developing Comprehensive Business Intelligence, he added. The Finance Minister further said that this will be essential for “just in-time”, enforcement capability. Simultaneously, policy initiatives may be necessary to decide the ways and means of conversion of large data base into effective action against all recalcitrantassessees and deductors, stop filers, non filers. This action may necessitate a paradigm shift in the approach and functioning of the Department in utilizing the manpower available at its disposal, said the Minister.
Shri Pranab Mukherjee said that the tax Deduction at Source is a major component of tax collected and is based on very healthy principle of “pay as you earn”. The Centralized Processing Centre (CPC) for TDS matters at Ghaziabad is likely to be functional this year. Policy initiatives by CBDT in this area of work by making it enforceable against the deductors on real time basis may be of relevance for enhancing the TDS collections. The Minister said that Itshould be ensured that this CPC is set up on priority and its technological capabilities are fully exploited for revenue collection maximization.
Speaking about the Central Processing Centre, Bengaluru which has become fully functional, the Minister said that CPC Bengaluru has processed more than 85 lakh e-returns during the F.Y. 2010-11 and it would perform still better in this year. Three more CPCs for tax returns are planned at Manesar, Pune & Kolkata. He expressed hope that theiroperationalisation in due course would give a fillip to the processing capacity of the returns of income with the Department and help in processing the returns of income within 4 months of filing the return. These four centres will take care of major areas of work, which required involvement of substantial manpower. Department should study its impact and come out with strategy to redeploy human resources in the core area of work, which are revenue yielding., the Minister added.
The Union Finance Minister Shri Pranab Mukherjee said that towards better taxpayer services, this year the IT department has introduced simple and user friendly SAHAJ (Form) for individual salary tax-payers. He said that he has also introduced SUGAM for small tax-payers availing presumptive tax scheme. Moreover, salaried tax-payers with income up to Rs.5 lakh will be exempted from filing returns for which suitable Notification is expected very soon. This will apply from the current assessment year (2011-12) for the income earned in 2010-11 and would be beneficial to a large section of salaried tax-payers, Shri Mukherjee said.
The Union Finance Minister Shri Pranab Mukherjee said that Electronic Filing of tax returns and electronic payment of taxes is encouraged. However, he said that a lot more remains to be done. Shri Pranab Mukherjee said that there are a large number of grievances pertaining to tax refunds and credit of TDS, which needs to be attended on urgent basis. While the Department has adopted Information Technology at a large scale, it needs to further improve the quality of delivery of services by streamlining its systems. To introduce a ‘Zero grievance regime’, it is essential that there is an adoption of integrated approach in dealing with tax-payers. The geographical distribution of jurisdiction of Department in India is irrelevant to tax-payers, he said.
The Finance Minister said that Tax-payers will like resolution of their grievances sitting from any corner of the country. This is only possible when there is concept of single jurisdiction in Income tax in India. The Union Finance Minister Shri Pranab Mukherjee said that setting-up of Centralized Processing Centres (CPC) and e-filling will make this concept reality and tax-payers will not find themselves clogged in jurisdiction disputes as technology can be used to create a boundary-less functioning. This will also ensure seamless flow of information within the Department, he added.
Shri Mukherjee said that the Income Tax Department has come up with innovative measures to address the problems it faces in delivery of tax-payers services. He said that the field formation must be sensitive to the needs of the tax-payers. The Department has commenced the roll out of Sevottam and Aayakar Seva Kendra. He said that in the current year’s budget speech, he has announced setting-up of 50 more such centres throughout the country and he expressed hope that the Department would not restrict to this number and set up more than 50 centres in Financial Year 2011-12. He said that the Aayakar Seva Kendra should become centre of excellence in delivery of tax-payers services.
The Finance Minister said that the Department needs to focus on preventive vigilance and adopt a strategy for “zero tolerance for corruption”. He said that the Department should take all measures as are required for effectively implementing preventive vigilance. The Department may look into further ways to reduce interface with the public as in the introduction of Refund Banker Scheme, so that grievance that tax-payers may have in their interface gets reduced to near zero. Sevottam and Aayakar Seva Kendra are steps in this direction, but the Department needs to think ahead and come out with many more innovative steps, he added.
The Finance Minister said that a National Information Utilities for CBDT has been approved by the Government on the recommendation of TAGUP, a committee headed by Shri Nandan Nilekani. This will provide operational flexibility and space to CBDT to rollout innovative services to tax-payers. CBDT should opeartionalise National Information Utilities on priority basis, he said.
Shri Pranab Mukherjee said that taxation is not only about collection of taxes, it has assumed a multidimensional character. In the present scenario, where the whole world is facing the threat of terrorism, the funding of terrorism and its sources are of paramount interest to us. He said that the anti-national activities are funded through illegal sources of income. The identification, detection and movement of this money is essential to keep a tab on the anti-national and illegal activities, he added.
The Finance Minister said that looking into the challenges posed by the generation of illegal income through various anti-national activities, Government has approved of setting- up a “Directorate of Criminal Investigation” in the Income Tax Department. He said that this Directorate will deal with tax crimes related to illegal activities. It will locate crimes or criminals by tracing the movement of money before, during and after a crime is committed. This new Directorate will also strengthen the ongoing efforts of the Department in dealing with issues of black money, said the Finance Minister.
Shri Mukherjee said that litigation with the tax-payers still remains a matter of concern. Pursuant to recommendations of the Standing Committee on litigation in CBDT, monetary limits for filing the appeals have been revised upwards. This will have an impact on reducing the future litigation by almost 20-25 per cent, he added.
Shri Mukherjee said that the pending litigation especially before CIT (Appeal) and Income Tax Appellate Tribunal (ITAT) needs immediate attention. As on 31st March, 2011, Rs.77000 crore of demand was pending before CIT (Appeal) and almost Rs.96000 crore of demand was pending before ITAT. CBDT need to come out with a strategy to maximize collection from these pending appeals. He said that CBDT should also ensure that CIT(Appeals), who are under administrative control of Department perform their functions effectively and disposed appeals as per the administrative guidelines. The compliance to timelines for disposal of cases should be monitored and enforced by CBDT, the Finance Minister said.
The Union Finance Minister Shri Pranab Mukherjee said that the other aspect of IT officers’ performance in the coming years relates to Result Framework Document (RFD) applicable to the Ministry of Finance. From 2012 onwards, the performance will be evaluated by the PMO at specified regular intervals, said the Minister. Shri Mukherjeesaid that he hopes to see a pro-active Income-tax Department, anticipating the challenges and finding the solutions on a fast track basis. It would include actions in implementing administrative policies as also measures to widen and deepen the tax base, he added.
The Finance Minister said that the Department needs to reinvent itself to meet the challenges it is going to face in future, the challenge of globalization and the rising expectations of young India in the age of Information Technology. The Department should concentrate on its core functions of data mining, risk profiling and risk assessment, tax enforcement and recovery, tax-payer’s awareness and education. He said that the Department should further strengthen its administrative structure so that it can undertake greater responsibilities and carry them out more effectively. He said that this huge country needs to expand its taxpayer base of 3.5 crores, for generating huge resources for infrastructure and social expenditure. Shri Mukherjee said that the Department should, therefore, gear up to bear the increased responsibility of managing its resources efficiently and effectively so that better tax compliance is enforced and there is better delivery of tax payer’s services.
In the end, the Union Finance Minister Shri Pranab Mukherjee wished the annual conference of Chief Commissioners and Director Generals of Income Tax all success and said that he would be looking forward to the outcome of deliberations in this conference.