The Income Tax department has refuted allegations made by industry leaders Kiran Mazumdar-Shaw and Mohandas Pai of taxmen harassing businesses, a criticism that has become louder in the wake of the recent death of Cafe Coffee Day‘s founder VG Siddhartha.
Pai, a former director at Infosys Ltd, has told the media that on 1 August that tax officials who have to meet their annual tax collection targets put pressure on companies to pay up even if they do not concur with the amounts demanded, which leads to litigation. Mazumdar-Shaw, chairperson and managing director and founder of biopharmaceuticals firm Biocon Ltd, told The Telegraph in an article published on Sunday that ‘a government official’ called her recently and told her not to speak about issues such as ‘income tax harassment’.
According to officials of Central Board of Direct Taxes (CBDT), “There is no merit in these claims”. Every year, the tax department makes a strategy on how officials should go about optimising tax collections including the recovery of tax arrears. Senior field officers of the department in charge of specific regions often informally speak to big assessees under their jurisdiction ahead of important deadlines for paying advance tax, urging them to pay.
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