IT Dept. to crack down on 'stop filers'

By Sujay Mehdudia

NEW DELHI, FEB. 5. Waking up to the menace of ``stop filers'' - persons who are registered with the Income-Tax Department but have not been filing their tax returns for years - the Central Board of Direct Taxes (CBDT) has issued strict instructions to all Income Tax offices across the country to initiate action and bring to book those who have taken the department for a ride.

The lead in this regard has been taken by the Income Tax Department, Delhi. It has started the process of issuing notices to the ``stop filers'' and warned of strict action if they fail to comply. ``We are in the process of processing the number of stop filers that have piled up over the years. A large number of them have already been issued show-cause notices,'' a senior official maintained.

It is expected that the new drive by the CBDT would lead to a substantial increase in the number of active taxpayers and could also give an added boost to the widening of tax arena exercise. The `unprecedented' situation in the past has not only led to a sharp increase in the number of ``stop filers'' but has also been causing loss of crores.

It is a well-known fact that mounting work arrears have plagued the department for many years. The reported pendency which stood at 11.24 lakh cases at the end of March 1971 has gone up to more than 22 lakhs ending December 1999. The problem of an increased workload is further magnified if the stop filers are taken into account. The trend of stop filers indicates an increase both in absolute terms and as a proportion of registered taxpayers.

According to insiders in the department, the number of stop filers has increased from 15.5 lakh in 1986-87 to 48.25 lakh in 1996-97. Another discomforting feature of the trend of stop filers is its 12.03 per cent rate of growth in relation to 6.39 per cent of growth rate of registered taxpayers. It is expected that by 2001, a situation could arise where the annual increase in the number of stop filers would exceed the new assesses added during the year resulting in negative growth among new taxpayers.

According to official records, while the number of registered taxpayers in 1986-87 stood at 73.45 lakhs, the number of stop filers was 15.50 lakhs. The registered taxpayers in 1990- 91 increased to 86.53 lakhs but at the same time, the number of stop filers also recorded a massive jump to 25.36 lakhs. The arithmetic worked out by the department states that while the number of taxpayers would increase to 1.74 crores in 1999-2000, the number of stop filers would touch 60.59 lakhs. It is predicted that by the year 2000-2001, while the number of registered taxpayers is likely to touch the two-crore figure, the number of stop filers would also reach an alarming 76-lakh mark.

Although the department would have two crore taxpayers on its rolls, only around 1.25 crore registered taxpayers would be filing their returns - so much for the drive to widen the tax base. Even during the current financial year, the Department would have around 1.74 lakh taxpayers registered with it but in fact only about one crore would be filing returns. So not only is there a deliberate attempt by these unscrupulous elements not to file returns, it is also leading to a massive revenue loss.

Sources attribute this to the lack of infrastructure and computerisation which had made it virtually impossible for the department to keep track of those who are not filing their returns. With the present state of affairs in a majority of the income tax offices, there is no way that such evaders could be traced and action launched against them on a massive scale.

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