MCD to take punitive action against property tax defaulters

New Delhi: MCD has issued new guidelines to assessment officers to tackle the issue of low property tax returns. Punitive action through prosecution under DMC Act will be initiated against defaulters with tax pendency of over Rs 25 lakh, according to a circular issued by the property tax assessment and collection department.
“Considering it is a major source of revenue, it has been decided to take strict action to recover property tax from defaulters,” said the circular.
Despite several measures, including attachment of bank account and property under sections 156 and 446 DMC Act, returns have not been filed in many cases, said an official.
“To curtail the tendency to evade payment, punitive action will be initiated against offenders by way of prosecution under sections 152A and 467 of DMC Act in cases where tax is more than Rs 25 lakh,” said the circular.
It stated the concerned assessing officer will need to lodge complaints and initiate prosecution where a person has wilfully defaulted on payment or wilfully attempted to evade tax, including the interest amount and penalty under the Act.
“Action can also be taken where the person has furnished wrong information or wilfully failed to file property tax returns in due time or not furnished information sought under DMC Act,” said the circular.
However, before initiating prosecution, the concerned officer should ensure the defaulter has been served the demand bill and notice. “The officer must ensure the proposal is sent for approval only once it satisfies the criteria stipulated in the checklist of violations. Further, the proposal for prosecution needs the approval of the assessor and collector in MCD,” said the official.
If the assessment order or demand notices are under challenge before a court, the department should refrain from filing prosecution cases, said the circular.
In August, MCD reviewed the summary of taxpayers for the last four years and identified 10 lakh cases where people had not paid taxes for the last one or two years. It has started sending messages to these defaulters.