Parliamentary panel tells Centre not to alienate honest taxpayers

The panel said search and seizure operations should be handled with adequate caution

After a parliamentary panel on finance received representation from taxpayers that they are "treated as felons" by revenue officers while tax searches are underway, and are often asked for bribes so that search process is truncated or abandoned, it has asked the Centre to have provision for filing confidential complaints against wrongdoing officials and not alienate honest taxpayers while stepping up action against chronic evaders.

"Many individual taxpayers have made representations to committee members that they are treated as felons by revenue officers while search is underway. Moreover they are often asked for bribes so research process is truncated or abandoned. This type of wrongdoing needs to be fully investigated by the department and taxpayers should be provided an opportunity to provide confidential complaints against wrongdoers," the parliamentary standing committee on finance said in a report tabled in Lok Sabha.

The panel said the search and seizure operations can be an effective deterrent against tax evasion and for improving compliance. However, in view of perceived harassment from such intrusive operations, these operations should be handled with adequate caution.

The panel also noted that there was a time lag between search and survey and passing of assessment order, which defeated the intended purpose of searches and surveys. Due to the same reason, the data of actual yield of surveys is not maintained centrally.

It recommended speedy assessment orders, apart from infusing more prudence and rationality to those searches and surveys so that it is prevented from becoming an instrument of harassment and even corruption.

"There should be reasonable outcomes from these operations. Furthermore, confidentiality of the documents seized should be maintained and officials should be made accountable if any leakages are made or unverified information is disclosed lose to the press," the panel said.

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