Invading officers to achieve Vera target

Mumbai, Ta. 18 February 2020, Tuesday

The Directors of various private limited companies are issuing notices by the Department of Taxation, in which they are being held responsible for the outstanding amount taken from the company and they have to pay this amount.

Over the past few weeks, the number of such notices has been on the rise. While the current fiscal year is about to end, the tax collection target has not been achieved, which has led to increasing pressure on taxpayers to complete the target.

Directors are demanding a tax on the amount between Rs 8 crore and Rs 20 crore. In some cases directors are also being told to pay this amount in one to two weeks.

If the private company does not pay the tax, then the revenue collected by the directors of the recovery company is provided for in section 4 of the Income Tax Act. In the period in which the tax is demanded, it is found that the director on the board of the company is entitled to demand this amount, even if this person has left the post of director, he is liable to pay the tax. Such tax notices refer to directors as assets in default which means that if such directors do not pay their taxes, their bank account and property can be forfeited, a tax expert said.

In addition to issuing tax notices to meet the tax target, officials are also reported to have visited the defaulters and conducted a recovery survey. The tax expert expressed skepticism against directing the directors to serve a special purpose. He questioned if a company was yet to pay Rs 1 crore tax.