Retro tax panel will aid taxman not to bark at wrong tree

Written by Gireesh Chandra Prasad | Gireesh Chandra Prasad | Updated: Jul 12 2014, 07:57am hrs
The Central Board of Direct Taxes (CBDT) will discuss a strategy to augment revenue collection at a conference of chief commissioners later this month. But to a large measure, meeting the direct tax target for 2014-15 would depend on the economy's fortunes, RK Tewari, chairman of the country's apex direct tax policymaking body, told Gireesh Chandra Prasad in an interview. Tewari said CBDT would also frame guidelines soon for a high-level panel to review fresh cases arising from the 2012 retrospective amendments to the income tax law to provide an effective oversight of fresh cases and to prevent unavoidable disputes. Edited excerpts:

What kind of relief can the proposed CBDT panel offer MNCs while scrutinising possible new cases of retroactive tax demands on the past sale of Indian assets

We will soon frame guidelines for the scrutiny. This mechanism will enhance oversight and transparency in assessments and will make sure that all facts are considered before issuing a tax notice. The idea is to prevent avoidable litigation. It is, in no way, a replacement for an assessing officer. Nor will this administrative arrangement (of the Executive) compromise an assessing officer's ability to discharge his obligations under the Income Tax Act that is passed by Parliament.

Will the high-level panel scrutinise the show-cause notices already been issued but no tax demand has been raised yet

Only fresh cases coming to the notice of assessment officers will be considered by the panel.

Despite foregoing about Rs 22,200 crore by way of tax relief this fiscal, you expect a 19% increase in direct tax collections, whereas you could manage just 14% growth last fiscal. How would you manage

We have made a strategy for augmenting revenue collection for this fiscal, which will be enforced for the remaining nine months. The measures to be discussed at the meeting of chief commissioners on July 22 include steps meant to collect tax arrears. We shall make every effort to meet the target. However, meeting the revenue growth target is indeed a challenge and the projected economic growth rate of 5.4%-5.9% for the fiscal would be a driving force in achieving the target.

Will CBDT's new accounting standards impose fresh compliance requirements

The Income Tax Act allows CBDT to notify accounting standards for any class of taxpayer or income. These standards are only for the purpose of computation and disclosure of income for tax purposes. Taxpayers need not maintain books of account as per the standards notified under Section 145 of the Act. Synchronising Indian Accounting Standards with the International Financial Reporting Standards is a different issue.