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RTI replies shows huge arrears ‘writes off’ by IT (Income Tax) department

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Apparently failing to recover massive tax dues from various corporate tax-payers in the country, the Income Tax Department (ITD) has now started “writing off” thousands of crores of tax arrears by such defaulters, according to RTI replies.
Based in Neemuch, Madhya Pradesh RTI activist Chandra Shekhar Gaur has received various replies from I-T officers under various principal chief commissionerates of Income Tax (PR-CCIT)
When contacted, a top official of the Central Board of Direct Taxes (CBDT), New Delhi, admitted that there were certain provisions by which tax dues may be written off in certain cases.
“However, the tax-payers’ liability does not get extinguished even if it is written off for the time being. When we learn that the party’s financial situation has changed, we immediately initiate recovery proceedings as per law,” the CBDT official, who requested anonymity, told IANS.
The official said the procedure (to write-off) was very long-winded, time-consuming and goes through various levels, depending on the amount and required clearances from different authorities.
Mumbai’s tax-consultant and Chartered Accountant Poneet Gupta said that arrears may be written off when the assessee is untraceable or bankrupt, but there is no procedure under the IT Act to “write off” arrears. “Under the General Financial Rules, 1963, powers to sanction write-off of the revenue have been delegated by the center to the IT authorities based on the amount (of write-off) and seniority of the officer,” he added.
Experts describe direct taxes as the veritable “bread-butter of the economy”. Last year (2017-2018), the total collection stood at around Rs 10 Lakh crore.

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Picture credits: Live Mint

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