By TIOL News Service

NEW DELHI, MAY 26, 2017: THE CBDT has constituted a think tank to look into the nature and type of direct tax arrears as well as provide an estimate of the amount of such arrears. However, the primary objective of this committee was to suggest measures to aid the Income Tax Department in swiftly recovering such arrears.

The major functions of this committee may be enumerated and briefly explained as follows:

a. to examine and bring out the broad categories under which the tax arrears could be classified, and then suggest class-specific measures for the quick collection or liquidation, if required, of such tax demands;

b. to determine the age profile of such tax arrears, which in other words, means to examine for how many years various tax demands have stood unpaid. The committee would then prescribe policy-level recommendations for dealing with tax demands which happened to b e older than a threshold number of years;

c. to analyze, based on the above, whether certain tax regions or charges happened to be more prone to tax evasion and long unpaid tax demands, in comparison with others, and then according the committee was to suggest measures for -

i. avoiding any infructuous tax demands from being raised on assessees, by the aforementioned regions or charges;

ii. securing the expeditious recovery of such tax arrears in such tax regions and charges.

d. to analyze top-dossier cases to determine whether the Board would need to prescribe additional parameters for monitoring so as to ensure that large tax demands could be recovered in the shortest possible time;

e. to reveiew the performance of the 'Naming & Shaming' policy, which involved revealing names of tax defaulters, had served its intended purpose of acting as a deterrent for tax evasion, and whether or not there was a need to not only continue the policy but also expand its scope, by sharing details of such tax defaulters with banks, financial institutions and credit/risk rating agencies;

f. to provide suggestions for any miscellaneous issue pertaining to the collection and management of tax demands.

The Chairperson of this committee was given the option to take on board any officer who has specific expertise in the field of demand management. The committee is expected to file its report of recommendations by 15th of July, 2017.