Appraisal system for income tax collectors modified

In a move towards making the tax regime non-adversarial, the income tax (I-T) department on Friday announced a new appraisal system for tax officials in which the focus will be more on quality and less on meeting tax collection targets.

The change has been brought to ensure that taxmen do not come out with frivolous tax demand notices and cause undue harassment to taxpayers. To this effect, the I-T department has modified the annual performance appraisal report of the assessing officers, including I-T officers, assistant commissioners and deputy commissioners of I-T to ''bring about greater accountability in assessment functions''.

As per the revised format, the performance of the assessing officers will also be specifically measured for quality of assessment, the pace of disposal, and efforts made towards widening the tax base rather than only meeting the annual tax collection targets.

The idea is to reward tax officers for sustainable, legally valid and good quality assessment orders and discourage them for unsustainable additions.

''With these changes the assessing officers will be more conscious of their accountability for the quality of their assessment orders and the tax demanded in such orders. This system is expected to bring about greater judiciousness in application of law by the assessing officers,'' an official statement said.

The modified format will be applicable for the reporting year 2015-16.

The tax department has often been blamed by taxpayers for issuing aggressive and sometimes frivolous tax demands, especially towards the end of the year, to meet the often steep tax collection targets.

Analysts, however, believe that till tax collection targets also are a part of the appraisal format, real change is unlikely.

How unrealistic the targets for taxmen are can be gauged by the fact that the government had to revise downwards its direct tax collection targets drastically for the last couple of years.

In 2014-15, the government initially set a target of Rs7.36 trillion for collection of direct taxes but had to revise it downwards by more than Rs30,000 crore to Rs7.05 trillion. Similarly, in 2013-14, the actual collections fell short by more than Rs30,000 crore from the target of Rs6.68 trillion.

At a press conference last month, revenue secretary Hasmukh Adhia indicated that the direct tax collection target for 2015-16, pegged at Rs7.98 trillion, will be revised down by Rs30,000-40,000 crore.