Policy

I-T dept restrains officials from taking intrusive/coercive action

Our Bureau New Delhi | Updated on October 16, 2020 Published on October 16, 2020

CBDT issues new guidelines keeping in mind provisions under the ‘Taxation and other Laws (Relaxation and Amendments of Certain Provisions) Act,’ which has recently replaced an ordinance.

The Income Tax Department on Friday issued new guidelines to restrict intrusive or coercive action for recovery of tax demand by Assessing Officer (AO)/Tax Recovery Officer (TRO). The new guidelines have come into effect immediately.

The new guidelines have been issued by the Central Board of Direct Taxes (CBDT) keeping in mind provisions under the ‘Taxation and other Laws (Relaxation and Amendments of Certain Provisions) Act,’ which has recently replaced an ordinance.

According to the guidelines, AOs/TROs are allowed to take coercive/intrusive measures only after exhaustion of other means of recovery. Recovery surveys to the non-responsive/non-traceable taxpayers will be restricted as new law amends section 133A of the Income Tax Act to allow survey only by Investigation and TDS wings.

Under the new arrangement, there will be two members collegium comprising of Principal Chief Commissioner of Income-Tax/Chief Commissioner of Income tax rank for the screening of survey for cases other than TDS (Tax deducted at sources). It mandates Pr.CCIT/CIT for monitoring of survey to ensure that it's restricted to the scope approved by the collegium.

The new guidelines exclude AOs/TROs from surveys. The survey team will prepare a report and share with Income Tax Business Application (ITBA) and concerned AO/TRO. New guidelines press for strict compliance with Second Schedule, Survey Manual, and Guidelines for attachment of movable/immovable properties.

Commenting on new guidelines, Shailesh Kumar, Partner at Nangia & Co LLPs said that providing stringent conditions for tax recovery proceedings by Income Tax authorities are much welcome, as it will reduce the arbitrariness/subjectivity and permit authorities to take coercive action only after following the due procedure under the law. “This will also help Taxpayers to take necessary remedial actions in tax recovery proceedings and duly represent their case in such proceedings,” he said.

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Published on October 16, 2020
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