The Hindu Business Line : Taxation problems

While the Finance Minister has emphasised the need to collect tax arrears, said to be some Rs 80,000 crore, revenue is being lost on interest payable on refunding excess tax collected or deducted at source.

In many cases, even when the assessee files his returns on time, the interest on shortfall in advance tax is levied till the date of processing the return. The assessee does not know when his return will be taken up for processing; or whether it will be processed at all. Even computerisation has its problems.

In one instance, an assessee received intimation under Section 143(1) of the Income-Tax Act for the assessment year 2003-04. The return was processed using computers. The assessee was asked to pay some difference in tax. When he took it to the tax counsellor, the latter found out that the difference arose because of the surcharge levied by the computer on the tax due.

The irony is that the assessee's income was far below the benchmark of Rs 8.5 lakh stipulated for levying a surcharge for the assessment year.

In another instance, an assessee received his intimation under 143(1). To his surprise he found that he had to pay interest under Section 234A for delay in filing the return. He had filed his return well within the extended time allowed for filing the return.

On the refund side, it is gratifying that one can look forward to getting it electronically credited to his bank account. But despite a hefty refund outgo in recent years, it is still sad to see the taxpayers waiting at the income-tax department to get their refunds.

R. M. Subramanian.

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