Finance Minister Jaswant Singh on Tuesday said the Income Tax Department has been asked to go for searches only if there is 'credible evidence' about substantial tax evasion as part of measures to remove the unnecessary fear of raids.

He also said that steps will be taken to speed up income tax refunds.

"I have instructed the department that searches should be authorised only where credible evidence of substantial tax evasion exists," Singh said during his address at the All India Conference of Chief Commissioners and Director Generals of Income Tax and Customs and Central Excise.

Further, search and seizure operations would be carried out with utmost care and caution and only on specific orders from the Director General (Investigations).
Revenue collections should be increased "without frightening the tax payer," the finance minister said.

The government would set up a National Tax Tribunal to ensure uniform interpretation and implementation of the Income Tax Act, he said.

Further, 50 additional benches of the Income Tax Appellate Tribunal would be set up to quicken refunds, while a system of ombudsman would expedite disposal of tax disputes

The additional benches of the tribunal would be set up in consultation with the law ministry to dispose of cases within six months.

At present, search and seizure are resorted to by the I-T department when there is evidence of undisclosed documents or assets which have not been and would not be disclosed in ordinary course.

Authorised officers of the department can search residential premises, business premises, vehicles and bank lockers and to seize the books of accounts, stocks and valuables.

They can also, under section 132A, requisition books of accounts and valuables seized by other government departments for investigations under the Income Tax Act.

Calling for reducing India's dependence on market borrowings, the finance minister said such borrowings were expected to come down to Rs 130,000 crore (Rs 1,300 billion) in 2006-07, from the current year's expected borrowing of Rs 150,000 crore (Rs 1,500 billion), he said.

Despite our projection of better revenue realisation and cutting down of avoidable expenditure, the Centre would still be required to borrow Rs 1,30,000 crore in 2006-07.

The minister also said the Central Board of Excise and Customs will have a complete online assessment system in place by December 2004.

Jaswant Singh said it was also necessary to deliberate on procedural reforms by keeping a delicate balance between revenue collections on one hand and the genuine grievances of the tax payers on the other.

He said the completion of CENVAT chain to eliminate evasion and encourage modernisation of textile sector was gaining momentum.

The finance minister said after a lot of hard work the tax administration has reduced the number of forms required in direct taxation from 42 to 22 after the Budget announcement and said the conference had to deliberate on the ways to reduce it to 10.

Among other achievements, he said non-core activities are now outsourced to enable tax administration to focus more on its core functions.

He said with the outsourcing of Permanent Account Numbers from July 1, 2003, PAN cards are being delivered to the applicants within 15 days from the date of application.

How to get the new PAN card

The income tax department has prepared a software called 'Sampark' to enable easy preparation of returns by tax for the assessement year 2003-04.

Simultaneously for effective compliance, the tax department is also introducing Tax Payer Information Network, the minister said.

Additional inputs: PTI