Dangling carrot and stick, the Income Tax Department today issued notices to 35,000 more assessees for failure to file tax returns while Finance Minister P Chidambaram offered them a penalty waiver if they chose to clear their dues.
The government's initiatives have already borne fruits with 10,000 assessees filing returns and clearing their dues, he told reporters here.
The action of the tax authorities come on top of notices sent to 70,000 assessees recently for recovery of tax dues to shore up revenues which it is feared may fall short of the budget estimates in the current financial year.
"A polite letter was sent to 35,000 such persons in the first lot. Two weeks ago we have sent letters, another lot of 35,000 persons. Today letters are being issued to a third lot of 35,000 persons," Chidambaram said.
He gave an assurance that the I-T department would take a benign view of assessees volunteering to file returns and clear their dues and interest.
"The tax authorities can take a benign view and waive the penalty. They have done so in numerous cases in the past. This is your opportunity to file your returns, pay your tax and interest, if any, and apply for waiver of penalty," he said urging the assessees to pay advance tax by tomorrow.
"To those who have not filed their I-T returns so far, either for current year or for previous years, I have one simple message--it behoves you to file returns, it behoves you to pay advance tax by tomorrow," he said.
The last date for paying the final instalment of advance tax is March 15 for corporates as well as individuals.
Chidambaram said the steps taken by the tax department to check evasion is reaping results as 10,000 assessees, of the 70,000 to whom notices were sent, have disclosed their income and filed taxes on receiving the letter.
"These letters have had salutary effect. Over 10,000 recipients, of the first two lots of letters, have filed their returns and paid their tax dues," Chidambaram said.
The revenue department is tapping each and every source of revenue to achieve the Rs 5.65 lakh crore collection target under the direct taxes category for this fiscal that ends on March 31.
He said 13.5 lakh returns have been filed between February 10 and March 10, an increase of over 15 per cent over 10.81 lakh returns filed during the similar period last year.
Till March 10, 2013, 1.77 crore returns have been filed representing an increase of 35 per cent. As on March 10, 2012, a total of 1.35 crore returns had been e-filed, he added.
"I am inferring that our approach is paying dividend. I am happy with the change of attitude and I hope many thousands more will voluntary file their returns and pay the tax dues, especially the Advance Tax tomorrow," Chidambaram said.
The Minister said he had introduced provisions for improving compliance for payment of Service Tax in his Budget.
"It is my hope that a very large proportion of 10 lakh registered assessees who have not filed returns and who do not file returns currently will take advantage of this opportunity," Chidambaram said.
The government's policy, he emphasised is clarity in tax laws, a stable tax regime and non-adversarial tax administration, a fair mechanism for dispute resolution and an independent judiciary.
Consistent with this approach, he said both CBDT and CBEC have been persuading the tax paying community to voluntarily comply with tax laws and pay the taxes due.
"There are many potential tax payers who have not filed returns so far for any assessment year. There are many who have stopped filing returns. These are described as non filers and stop filers. Our effort is to persuade them to file their returns," he added.