Is ‘Tax Terrorism' For Real?

Arrests and imprisonment over tax offences have increasingly become commonplace, raising questions of official overreach. BusinessLine reports.

- A Srinivas & Keerthi Sanagasetti

Mr X is into the business of hotels and lodging in Ongole, Andhra Pradesh, through a partnership firm. The firm’s annual turnover has been in the range of ₹15-20 lakh (over FY04 to FY19). In his returns, Mr X has been setting off losses carried forward from the initial years. However, in assessment year (AY) 2010-11, he had erroneously missed out filling the schedule showing the set off and carried forward losses. Hence, he received a demand from the IT department on March 10, 2011, requesting either to submit data on carried forward losses or pay tax to the tune of ₹1.4 lakh.

Despite filing both rectification and revised returns in August 2011 and January 2012, respectively, the matter is still unsettled. The chartered accountant who now represents Mr X’s case before the authorities told us about how he has been running from pillar to post, but in vain. He says, “The delay has now led to a new notice (generated in August 2017), demanding penalty on the tax amount.”

This delay is mainly due to the numerous assessing officers handling the case. While a few brushed off the case citing a technical glitch, others cited various other reasons for delay. Since one such officer cited unavailability of records as a reason, Mr X also submitted submit physical copies of financials and returns filed from AY 2004-05 to AY2010-11. But the case didn’t move an inch.

Mr X told us that even the online portal is of no help. Even after replying against the demand on the website, he hasn’t received any recourse from the department till date.

A taxing affair