The Central Board of Direct Taxes (CBDT) will link annual appraisals and postings of field officers with their performance in terms of collection under the 'Vivad se Vishwas' scheme, according to a communication.
An office memorandum from the CBDT, dated February 21, also said that collection outcomes would play a bigger role in the future postings of the field officers.
The latest missive assumes significance as there have been concerns over alleged 'tax terrorism' and undue harassment of genuine taxpayers by tax officials. The economic growth is also slowing down.
Soon after the dispute settlement scheme was announced, the department asked the field officers to work on holidays/Saturdays so that when the scheme is formally launched they get a head-start on the collection front.
'Vivad se Vishwas' scheme for resolving income tax cases was announced during the 2020-21 Budget presentation by Finance Minister Nirmala Sitharaman.
A target of mopping up Rs 2 lakh crore by March 31 has been set.
The scheme would formally be launched on Monday, when Parliament resumes the second leg of the Budget session.
There are 4.83 lakh direct tax cases worth over Rs 9 lakh crore pending in various appellate forums -- Income Tax Appellate Tribunal (ITAT), high courts and the Supreme Court.
According to the memorandum, the department has told field officers that their annual performance and increments would be linked to the collection outcomes of the disputes they handle.
A copy of the memorandum has been accessed by PTI.
Latest official data showed that economic growth slowed to a near seven-year low of 4.7 per cent in October-December 2019.
The CBDT's missive also comes as the government is desperate to meet fiscal deficit targets. Fiscal deficit has already crossed 128.5 per cent of the full year target as of end-January.
"As already conveyed, the performance of the field officers in respect of the Vivad se Vishwas scheme, shall be an essential factor in finalising their Annual Performance Appraisal Reports (APARs) and shall also be an important factor in determining their future postings," it said.
"In this regard, I have been directed to convey that the target for assessment of the performance of field officers in respect of the said scheme has been fixed at 100 per cent of the cases with disputed tax demand which will fulfil the eligibility conditions under the scheme," Income Tax Commissioner (C&S) Rakesh Gupta said in the memorandum.
The memorandum has been sent to all zonal chief IT commissioners.
Under the proposed scheme, a taxpayer who pays the disputed tax before March 31, 2020 will get complete waiver of interest and penalty.
The scheme would remain open from March 1 to June 30, 2020, and those who avail of it after March 31 would have to pay some additional amount.
Though officially no target have been set, some officers said they have been clearly told to ensure that the scheme mops up at least Rs 1.5 lakh crore to Rs 2 lakh crore and at least Rs 50,000 crore this fiscal.
The latest missive seems to have left the field officers seething as they have already been asked to work on weekends and holidays.
Already, many of their associations have protested against orders to work on weekends to complete the task of extracting revenue from pending tax disputes.
A source said total receipts have shrunk by 2.4 percentage points to Rs 12.82 lakh crore this fiscal till January 31.
The government has garnered only 66.3 per cent of tax revenue estimated in the revised estimates of this fiscal as against 68.7 per cent of the full year estimate previous year, according to data released by the Controller General of Accounts on Friday.
Direct tax mop-up in April-January declined 4.9 percent to Rs 7.45 lakh crore, or 63.7 percent of the revised estimate for the full financial year, as per official data. It also showed that cumulative gross and net tax revenue collection contracted in April-January by 2 per cent and 2.1 per cent, respectively.
With this, meeting the revised estimates would be a Herculean task as for the remaining two months gross tax revenues must clip at 22.1 per cent and net tax revenue at 70 per cent over the previous year, according to taxmen.
Total receipts during April-January stood at Rs 12.82 lakh crore, with tax revenue at Rs 9,98,037 crore
Non-tax revenue and non-debt capital receipts stood at Rs 2,52,083 crore and Rs 32,737 crore, respectively.
The government has already curbed its expenditure by 800 bps to 25 per cent, or by over Rs 2 lakh crore. During April-January, total expenditure stood at Rs 22.68 lakh crore, or 84.1 per cent of the revised estimates. This includes Rs 4.71 lakh crore of interest payments and over Rs 2.62 lakh crore of major subsidies.