AdminIn a major departure from the usual practice, the Central Board of Direct Taxes (CBDT) has issued directions that scrutiny of the self-assessment returns filed by September 30, 2008 for the financial year 2007-08 will be taken up in the current fiscal.
Fall in tax revenues and failure of many companies to pay their dues by September 30 have acted as a trigger for the CBDT to issue a circular to this effect to the income-tax offices across the country, sources said.Usually, September 30 is the date by which every company is expected to pay the final tax return for the said financial year.
A company usually pays taxes in the form of advance taxes spread across the four quarters of a financial year. If the amount is not paid, it can be paid with the interest penalty under Section 234 (b) and (c), before filing the final return.
In the normal course, tax returns for the financial year 2007-08 or assessment year 2008-09 should have been filed by September 30, 2008, and taken up for assessment next year (2009-10). These cases, which become time barring by 2010, will now be picked up for assessment and the demand will be raised before the end of this financial year for speedy recovery.Sources said this was due to a high rate of default in tax payments where the assessee has just filed the return form with the due amount, and in some cases even after calculating the interest penalty. Such defaults run into thousands of crores of rupees at a time when the government is facing a decline in yearly tax collections for the first time since 2003.Therefore, the tax department is preparing to serve notices on almost all the companies which have filed returns without paying the full taxes under Section 140 (a) (3) of the Indian Income Tax Act, 1961.
Under Section 140 (A) (3), an assessee is issued a notice as a tax defaulter.“The finance ministry is of the view that since the tax data are available online under the annual information return (AIR) system, recovery for this year could be started immediately. Earlier, when it was a manual process, the compiled and processed information took time to be made available from the field to the decision-making authorities,
