I-T dept wants more sleuths to probe tax frauds

'Investigation directorates have intensified actions in detecting serious irregularities.'
'They are seriously handicapped because of non-availability of manpower.'
Dilasha Seth/Business Standard reports from New Delhi.
Illustration: Uttam Ghosh/Rediff.com

Facing a 'serious' manpower crunch to investigate fraudulent and 'serious irregularities' on account of demonetisation, Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra has in an internal letter sought to rope in income tax inspectors to assist the investigation team.

In the letter, addressed to all principal chief commissioners, Chandra has highlighted that the investigation team was 'seriously handicapped' due to manpower shortage.

'Investigation directorates have intensified enforcement actions in detecting serious irregularities. They are, however, seriously handicapped because of non-availability of manpower,' the CBDT chief said in the letter.

The current investigation and enforcement drive was likely to continue in the coming weeks, he added.

Chandra recommended reorganisation of work by the field formations, which could spare a few officers for investigation.

He asked the principal chief commissioners to identify such officers and income tax inspectors and make them available to the Directors General of Income Tax (Investigation), or DGIT (Inv).

While the income tax department has a sanctioned strength of about 60,000, about 15,000 are part of the investigation team.

There are 9,490-odd income tax inspectors, who only assist the income tax officers or joint commissioners to carry out assessment.

Now, these inspectors will likely report to the investigation team.

There are 14 director generals under DGIT (Investigation) -- Ahmedabad, Bengaluru, Bhopal, Chandigarh, Chennai, Hyderabad, Jaipur, Kochi, Kolkata, Lucknow, Mumbai, New Delhi, Patna and Pune.

The DGIT (Inv) is the CBDT's revenue enforcement agency. The two income tax associations -- the Income Tax Employees Federation and the Income Tax Gazetted Officers’ Association -- in a letter to Prime Minister Narendra Modi said they were 'totally de-motivated due to huge shortage of manpower.'

The associations pointed out that there are 30% to 35% of vacancies at 'cutting-edge positions' like Additional Commissioner of I-T and Deputy Commissioner of I-T, their junior ranks and others.

The investigation department of income tax has cracked down on the number of money laundering and gold rackets operating across the country, fraudulently converting black money into white for a commission since the legal tender of Rs 500 and Rs 1,000 notes was withdrawn.

The income tax sleuths have nabbed offenders and recovered cash worth several crores in crackdowns in various parts of the country including Mumbai, Ahmedabad and Nagpur.

Since November 8, the department has detected more than Rs 1,500 crore (Rs 15 billion) of undisclosed income during surveys and searches and around Rs 120 crore (Rs 1.2 billion) has been seized so far.

After investigation wing, the spotlight will likely turn to the assessment officers.

According to the sanctioned strength of the income tax department, there are 7,294 assessment officers up to the additional commissioner's level, which includes 4,204 income tax officers who assess returns filed by taxpayers.

The additional commissioners and joint commissioners handle 30 to 40 quality cases a year, while the income tax officers assess 100 to 150 cases a year, but smaller ones.

With cash deposits above Rs 2.5 lakh (Rs 250,000) made in the wake of demonetisation under the scanner, it might be challenging for the department to assess 600,000 to 700,000 such cases.

This is only 1% of India's total taxpayers and 0.2% of the total PAN card holders in the country.