With PAN (permanent account number) as reference the Central Board of Direct Taxes (CBDT) is devising a single-window financial information database of taxpayers to profile their source of income and spending. The database will be set up later this year and will be fully operational next year.

It is being named as the Income Tax Business Application (ITBA).  It will help in improving data mining and business intelligence of the department. The ITBA will collate all information based on the taxpayer’s permanent account number (PAN), which will be used as a ready reckoner for the assessing officer before he goes for a search and seizure operation.

This is to ensure that chronic evaders are not able to get away without facing court cases

“We get information from various sources such as tax deducted at source, annual information reports, excise, service tax and value-added tax. But they are all in silos,” said Anita Kapur, chairperson, CBDT.

"We try to ensure that our tax regime remains non-intrusive....but there are certain people or cases against whom intrusive action is required. Because not everybody is willingly compliant. We have the powers of search and seizure under the Income Tax Act...we all know that there is large tax evasion happening in certain cases and we have to use that power of search and seizure (to clamp them down).

"We just don't want to get penalty and unpaid tax from the evader. We don't want to do that. Because, for us, tax evasion is not only a menace in that sense, it is also spoiling the entire compliance culture (in the country) because the people who are tax compliant feel that the system is unfair," she said.

Of the total 3.5 crore returns filed annually, the tax department selects 3,00,000 to 4,00,000 cases for scrutiny, based on risk profiling.

"This (not catching the evader) will encourage a system where a person who is outside the tax system will continue to remain outside the tax system," Kapur said. There was a large tax constituency which is not covered under the Tax Deducted at Source (TDS) regime like for example small traders.

"Such people do not file the return and wait thinking something would be done once the taxman comes calling with a search or a survey. We don't want that message to go," she said.

"Our focus should not be collection and it should be taken to a logical conclusion which is that an evader not only pays penalty (on the tax evaded) but also be prosecuted," she said. 

Kapur also said the department was on a drive to widen the tax net and is aiming to bring in as many as 25 lakh new assesses under the taxpaying bracket every month.

"I am just trying to say that there has to be deterrence against tax evasion. If my officer is not harsh on a tax evader then I think, you would agree, he or she is not doing their job properly. There is a law in place and there is no place for compassion in law. Law has to be forced fairly and evenly," Kapur said.