The Hindu Business Line : I-T Dept may face problems with new return form

The newly introduced 4-page return form (with as many as 9 schedules) by the Income-Tax department, applicable mainly to the individual salaried class, is being described by tax experts and senior taxation managers in companies as reflecting a piecemeal approach by the department, which may prove to be counter-productive.

Mr Narayan P. Jain, senior tax advocate and author, told Business Line that it may lead the department to a classic "Catch-22" situation, wherein, "if they accept the return without a scrutiny, there is bound to be revenue leakage, and if a thorough scrutiny is undertaken, (which surely will happen), it may well incur the wrath of the taxpayers, who are now comfortable with the one-page Saral form."

According to Mr Pallav Gupta, General Manager, Taxation, ITC Ltd, who is also in the taxation sub-committee of the Bengal Chamber of Commerce & Industry and Assocham, cases are bound to be picked up for scrutiny, leading to harassment and litigation.

He said it was hard to believe that the new form would reduce scrutiny assessments or any other kind of intrusive investigation, given the mindset of income-tax officers and the kind of data being sought including cash flow statements.

`Nosey' approach

Describing the revised format as a "nosey" approach, he felt this went against the avowed simplification approach the Finance Minister was advocating.

Mr Jain said: "Given the psychology of an average taxpayer in India who simply does not want to part with his money, the kind of details sought under the different schedules is bound to lead to further animosity between the assessee and the department.''

He said instead of spawning an assessee-friendly approach as a prelude to the emergence of a sound tax culture, the new form would usher in litigations galore.

"A majority of salaried taxpayers in this country is still not ready to measure up to such a pro-revenue approach."

He felt the form should be allowed for use by even those having more than one house property.

Mr Gupta said since the Form 2F had been designed to move towards a 100 per cent online system of filing of returns, "what is the purpose in also allowing manual submission of the Saral Form?"

He said it was being allowed perhaps because the department people are still not computer savvy. He said since there was an option for using the form, made effective June 1, , some 99 per cent of the assessees would still be using the old form.