Under pressure from the North Block to meet budget targets, several chief commissioners of Income Tax have started making tax claims over and above what companies had filed in their tax returns. This is in addition to the government going slow on refunds as it faces direct tax shortfall of over Rs 40,000 crore, sources said. Despite protests, the standard response offered by income tax officials has been to get companies to deposit at least 50% of their fresh tax liability before their appeal can be heard by an appellate authority. The rules, however, stipulate that the government cannot force a taxpayer to deposit the disputed amount before h/his right to first appeal.
Source: Times of India
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