The Municipal Corporation of Delhi (MCD) has issued new guidelines to address low property tax returns. In cases where tax arrears exceed Rs 25 lakh, punitive actions, including prosecution under the Delhi Municipal Corporation (DMC) Act, will be taken against defaulters. Despite previous measures, such as attaching bank accounts and properties, proving insufficient, the MCD will now initiate prosecution under sections 152A and 467 of the DMC Act for tax amounts exceeding Rs 25 lakh. Assessing officers are mandated to file complaints and commence prosecution proceedings against individuals who have wilfully defaulted on payment or attempted to evade tax.
The Municipal Corporation of Delhi (MCD) has rolled out a fresh set of guidelines for assessment officers aimed at addressing the persistent issue of low property tax returns. In a circular issued by the property tax assessment and collection department, punitive actions, including prosecution under the Delhi Municipal Corporation (DMC) Act, will be taken against defaulters with tax arrears exceeding Rs 25 lakh.
Despite prior measures, such as attaching bank accounts and properties under sections 156 and 446 of the DMC Act, proving insufficient in compelling compliance, the department expressed its concern. An official has confirmed that punitive action will be initiated against offenders by way of prosecution under sections 152A and 467 of the DMC Act in cases where tax is more than Rs 25 lakh.
The circular outlined that assessing officers are mandated to file complaints and commence prosecution proceedings against individuals who have wilfully defaulted on payment or attempted to evade tax, including interest and penalties under the Act. It also emphasized taking action in cases where wrong information is provided or property tax returns are not filed in a timely manner, or requested information is not furnished under the DMC Act.
However, before initiating prosecution, the concerned officer must ensure that the defaulter has received the demand bill and notice. The circular further clarified that the proposal for prosecution should only be submitted for approval if it adheres to the criteria listed in the checklist of violations. Approval from the assessor and collector in MCD is also required for prosecution proposals.
The circular explicitly stated that if assessment orders or demand notices are currently under legal challenge, the department should refrain from filing prosecution cases. In a review conducted in August, the MCD identified 10 lakh cases over the past four years where taxpayers had not fulfilled their obligations for one or two years. The department has initiated communication with these defaulters, sending messages to prompt compliance.
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