Action by I-T Dept should be proportionate, use enforcement as last resort: FM Sitharaman

Action by I-T Dept should be proportionate, use enforcement as last resort: FM Sitharaman

Finance Minister Nirmala Sitharaman on August 21 called upon the income tax department to make the language of notices sent to assessees simple and straightforward so as not to trigger a sense of fear among taxpayers.

“The language used in tax notices, letters is convoluted, technical which frightens the assessee. Income tax notices should be simple for the average taxpayer to understand. Need to explore simpler tax notices, including explanation of reason behind the notice sent,” Sitharaman said at the 165th Income Tax Day celebration on August 21.

The Finance Minister said that the issuance of FAQs, clarifications will not be needed if the language is made simple.

Along with being faceless, the income tax needs to be fair and friendly too, she added.

“Income tax department needs to aspire to be the most fair and friendly too. Friendliness in income tax is needed but not at the cost of sovereign duty. We need to place trust on the assessees,” she said.

“The experience of filing the returns on the first day should be the same as the last day, instead of frightening them. Be more amiable. Use enforcement measures as a last resort and action taken is proportionate to the issue. Fears compound when action taken is disproportionate,” she added.

The due process should be followed while encouraging voluntary compliance, Sitharaman said.

“The department must exercise its powers judiciously so that businesses are not harassed,” she said.

Meanwhile, a commitment has been formed for the review of the Income Tax Act as announced in the Union Budget, the Finance Minister said.

Sitharaman also strongly nudged the income tax department to move fast on deploying more officials to dispose off the pending appeals.

Talking about further improving issuance of refunds, she said that in this year so far 1.21 crore returns have already been processed within 24 hours.